Can ExxonMobil's Low Carbon Drive Power Its Future?
The company plans to invest a solid $30 billion in Lower Carbon Solutions during 2025-2030, focused on carbon capture and storage (CCS), low-carbon hydrogen and ammonia. Following the Denbury acquisition, ExxonMobil now controls more than 1,500 miles of CO2 pipelines — the largest CO2 pipeline network in the United States — and says its solutions could help reduce third-party emissions by over 50 MTA (million tons annum) by 2030.
XOM also notes contracts that could enable up to 16 MTA of capture or transport by 2030. At Baytown, TX, ExxonMobil plans to install a world-scale low-carbon hydrogen plant capable of producing up to 1 Bcf/d of hydrogen, with over 98% of associated CO2 captured and up to 10 MTA of CO2 handled via CCS. The portfolio also includes lithium development in Arkansas, aiming for first production in 2027 and supplying approximately 1 million EVs/year by 2030.
CVX & SHEL's Commitment to Net-Zero Pathways
Like XOM, Chevron CVX and Shell plc SHEL also commit to advance low-carbon initiatives.
Chevron has committed $10 billion through 2028 to advance low-carbon initiatives spanning biofuels, hydrogen, RNG and CCS. Its targets include producing 100,000 bpd of renewable fuels, 40,000 MMBtu/day of RNG and capturing 25 MTA of CO2. The company is also innovating via a $500 million energy-tech venture fund (Future Energy Fund III) to back novel decarbonization technologies.
Shell is taking a parallel path, investing in renewable power, hydrogen, and large-scale CCS hubs, such as the Northern Lights project in Norway. The company aims to invest $10-$15 billion between 2023 and 2025 in low-carbon energy, focusing on electric vehicle charging, renewable power and hydrogen infrastructure.
XOM's Price Performance, Valuation & Estimates
Shares of XOM have lost 9.4% over the past year compared with the industry 's 3.6% decline.
From a valuation standpoint, XOM trades at a trailing 12-month enterprise value to EBITDA (EV/EBITDA) of 6.92X. This is above the broader industry average of 4.27X.
The Zacks Consensus Estimate for XOM's 2025 earnings has been revised upward over the past 30 days.
ExxonMobil currently carries a Zacks Rank #3 (Hold). You can see the complete list of today's Zacks #1 Rank (Strong Buy) stocks here.
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