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Fossil industries wastes $ 2.2 million investments

carbon, greenhouse gas, fossil, industry, assets, loss, investor, coal, oil, gas, carbon, climate change, circular infra, energy, green power, 2 degrees

The United States is the greatest risk, CarbonTracker states, with a cost of $ 412 billion in stranded assets “unnecessary fossil projects in 2025.
Second in risk is Canada (220 billion). Than China (179 million), Russia (147 billion ) and Australia (US $ 103 billion).

The next decade fossil energy companies will lose possibly $ 2.2 trillion in investments, according CarbonTracker in a recent report.

The money will be lost in a low carbon future.

Global action on climate change and renewable energy investments will ensure the waste for fossil energy companies. Research was done at the current and future projects from oil, gas and coal companies until 2025. It concluded which projects would stop because of political actions to reduce greenhouse gas emissions to below two degrees global warming.

The turnaround to sustainable energy can be very expensive for businesses.

“All countries and oil companies who have fossil-oil resources in the ground, do also have coal in their financial reports,” according to professor Pier Vellinga. “Or they are busy investing in new fields. But in a low-carbon future, these reserves may not be needed, or they can not be won.”

Stranded assets

If the industry misreads by underestimating future demand technology and policy advances, this can lead to an excess of supply and create stranded assets. This is where shareholders shouldering be concerned – if companies are to committing future production which may never generate the returns expected.

James Leaton, head of research and co-author of the report, said: “Too few energy companies recognize that they will need to reduce supply of their carbon-intensive products to avoid pushing us beyond the Internationally recognized carbon budget.

Clean technology and climate policy are already reducing fossil fuel demand – misreading thesis trends will destroy shareholder value. Companies need to apply stress tests to 2˚C in their business models now.”

USA greatest risk

The United States is the greatest risk, CarbonTracker states, with a cost of $ 412 billion in stranded assets “unnecessary fossil projects in 2025.

Second in risk is Canada (220 billion). Than China (179 million), Russia (147 billion ) and Australia (US $ 103 billion).

Old industries are getting green

Major oil companies move slowly getting further along in the sustainable movement, says Vellinga. For example: already four years, Shell is divesting in oil. They have sold businesses in Australia, they have stopped searching for oil in the Arctic and now want to buy British Gas to buying.

Link to the CarbonTracker report:The $2 trillion stranded assets danger zone: How fossil fuel firms risk destroying investor returns.

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