Italian oil giant Eni is taking significant steps toward sustainability by launching a new business dedicated to capturing carbon dioxide emissions. This initiative is part of Eni’s broader strategy to transition to cleaner energy sources.
The company has already established two transition businesses, Plenitude and Enilive, focusing on renewable energy and biofuels, respectively. Both businesses have attracted private equity investment, enabling Eni to strengthen its commitment to green energy.
On Thursday, Eni’s CEO, Claudio Descalzi, announced plans for a new venture centered around the company’s supercomputer in northern Italy. This site includes extensive land, a power plant, and a facility designed for carbon capture. Descalzi explained that this supercomputer could provide valuable computing power to IT companies or those developing energy-intensive artificial intelligence applications.
Additionally, Descalzi mentioned that a new entity based on Eni’s carbon capture and storage capabilities will be unveiled in 2025. “We have nearly three gigatons of storage capacity available,” he stated. He also revealed plans to approve the HyNet North West project in the UK, aimed at capturing industrial emissions and storing them in the Irish Sea.
Eni’s commitment to the energy transition comes just a day after BP, another major oil player, decided to scrap its renewable energy targets and refocus on oil and gas following shareholder pressure. BP’s CEO, Murray Auchincloss, indicated a strong anticipated demand for fossil fuels well into the future.
In a recent investor presentation, Eni projected that its renewable energy capacity could increase fourfold to 15 gigawatts by 2030. Additionally, the company expects its biofuels sector to triple earnings during this time. Following a recent deal that saw Eni sell 5% of its biofuels arm to KKR, the company is also considering selling another 20% of its renewables business, Plenitude.
Moreover, Eni is negotiating a joint venture with Malaysia’s Petronas to merge gas fields, aiming to produce 500,000 barrels of oil equivalent daily to meet energy demands in Asian markets, particularly China and India. Descalzi noted the importance of this partnership, stating it would generate half of Eni’s current gas production.
Looking ahead, Descalzi believes the return on capital from Eni’s transition projects, including carbon capture and storage, could reach double digits within five years, while oil and gas returns are expected to range from 15% to 16%. He emphasized that transitioning to a more diversified business model is crucial for Eni’s future profitability.
Despite the changing attitudes toward energy transitions, Descalzi remains optimistic about investor interest. “At the end of the day, investors care about profitability,” he remarked. “It’s not just about the type of energy produced but about the financial returns.”