Norway's Equinor on Thursday weakened its energy transition plan as it struggles to deliver on pledges to invest more in renewable energy and low-carbon technologies, citing practical difficulties and a shift in political priorities.
The oil and gas producer in 2022 laid out short- and medium-term steps intended to achieve net zero emissions, including those from the use of its products, by 2050.
But in February, it scrapped a pledge to devote more than 50% of its gross capital expenditure to renewables and low-carbon solutions by 2030.
"The energy transition has started, but the opportunity set for high-value growth is more limited than we had anticipated," Equinor CEO Anders Opedal said on Thursday.
He cited increased costs, supply chain challenges, and delays by authorities in setting the necessary framework conditions, as well as a shift in governments' priorities.
"Due to the geopolitical tension, public spending on defence will increase, leaving less funding available for the energy transition," Opedal added.
Equinor has already scaled back its target for installed renewable energy capacity to 10-12 gigawatts (GW) by 2030, from 12-16 GW.
Equinor's oil and gas peers such as BP and Shell are also cutting, or abandoning, efforts to make renewable and low-carbon energy a bigger part of their businesses.
While many shareholders have welcomed the shift, others have started to pull money out. Key investor Sarasin sold its Equinor shareholding this year.
Equinor is maintaining its goal of achieving net zero emissions by 2050, and is also sticking to a target of halving emissions from group activities by 50% by 2030 from 2015 levels.
However, it has scaled back targets for reducing net carbon intensity, its key climate benchmark, to a range of 15-20% by 2030 from 20%, and to 30-40% in 2035 from 40%.
Carbon intensity is a relative measure, describing the amount of greenhouse gases emitted per unit of activity.
(Reuters - Reporting by Nora Buli and Nerijus Adomaitis; Editing by Kevin Liffey)
