29.3 C
New York

Disagreements between ExxonMobil and the European Union, Climate issue.

The climate issue causing divergences.

On one side, the American oil giant ExxonMobil (annual sales of US$347 billion), one of the largest producers in Europe and the main refining company on the continent. On the other side, the European Union representing 27 countries (and owning 14% of all world trade).

The bell seems ready to begin another round of the battle that has already accumulated episodes.

In December 2022, ExxonMobil decided to sue the EU in an effort to force it to eliminate a new bloc tax on oil sector groups. The argument: Brussels would have exceeded its legal authority by imposing the surcharge, which would be capable of generating resources of 25 billion euros that the European Commission envisaged using to neutralize part of the energy price increases resulting from the war in Ukraine, thus reducing suddenly high amounts charged to end consumers.

In March 2023, ExxonMobil announced that it could review its operating strategy in Europe, redirecting investments. Since then, it has in fact started to prioritize American territory when planning new contributions to its production system.

This week a new announcement: ExxonMobil warned that it is willing to withhold billions of dollars in investments related to climate issues in Europe, unless Brussels reduces the environmental bureaucracy that according to the company is responsible for the “deindustrialization of the European economy”.

ExxonMobil has invested more than 20 billion euros in Europe in the last ten years and its opposition to the climate policy adopted by the bloc is becoming increasingly clear. The company joined a group of dozens of oil industry executives a few days ago at a meeting held in Belgium with the aim of pressuring the EU to review its industrial policy based on greener technologies. Called the Green Deal, this approach is an essential part of the goal of zero greenhouse gas emissions on the continent by 2050.

Political leaders in Europe have already expressed concern about the possibility that stricter environmental regulations will scare investors and lead companies to prefer the United States or even China to host new industrial projects, leaving Europe aside.

The European Commission, whose president Ursula von der Leyen is seeking a second term this year, has struggled to implement the Green Deal and sees it as an important pillar for increasing the competitiveness of member countries.

The criticism received.

A criticism received in recent days by ExxonMobil came from an unusual player: Norway’s sovereign wealth fund, the largest in the world, with resources of US$1.5 trillion obtained precisely from the oil that the country extracts from the North Sea. The fund’s management opposes the American giant’s initiative to sue two groups of activists with a very small shareholding in the company and who presented a proposal for it to establish bolder targets for reducing emissions and environmental impact.

Nicolai Tangen, chief executive of the Norwegian fund told the Financial Times newspaper he was concerned about ExxonMobil’s action against minority groups Follow This and Arjuna Capital and commented: “It is a worrying move. We think it is too aggressive and we are concerned about the implications for shareholder rights.”

Your intervention is significant. After all, in addition to being increasingly active on climate issues, the sovereign wealth fund is one of the ten largest shareholders of ExxonMobil itself.

Related Articles

Latest Articles