Why Big Oil won’t lead the green transition, and who actually will

At COP28, then-US climate envoy John Kerry criticised US oil firms, singling out Chevron for insufficient climate action, stating they should be “leading the charge” in the green energy transition. Similarly, in its November 2023 report, the International Energy Agency (IEA) urged the fossil fuel industry to take a bigger role in the energy transition, warning that clean energy shifts require scaling back, not expanding, oil and gas. Yet a closer look at recent developments and historical patterns reveals a very different reality. 

Big Oil has never been a saviour for the green transition. On the contrary, it has actively fought to sustain fossil fuel dominance for decades, while China has emerged as a formidable leader in renewable energy. And now, US policies under President Donald Trump risk not only ceding leadership and influence to China but also creating a climate of uncertainty that could hinder companies capable of forging a balanced portfolio from contributing positively to a sustainable future.

A history of fossil fuel obstruction and its ripple effects

Recent congressional documents and Senate testimonies have laid bare the fossil fuel industry’s long-standing commitment to derailing climate solutions. In a May 2024 Senate Budget Committee hearing titled “Denial, Disinformation, and Doublespeak: Big Oil’s Evolving Efforts to Avoid Accountability for Climate Change”, a joint bicameral report detailed how the industry, aware of the causal relationship between greenhouse gases and climate change since at least 1959, has systematically undermined efforts to shift away from fossil fuels. Rather than spearheading a genuine energy transition, Big Oil has channeled billions into preserving an unsustainable system, banking on the promise of sustained oil demand for decades.

This defensive posture is deeply rooted in shareholder capitalism. Supermajors routinely favour projects yielding immediate, high returns, often choosing proven oil and gas operations over riskier green technologies. The result is a chronic focus on short-term gains — even as global warming accelerates and climate tipping points loom. This entrenched resistance not only stymies the shift to renewables but also has broader economic and geopolitical implications, as nations and investors are forced to navigate a fragmented, increasingly volatile energy landscape.

The IEA’s stark warning: Profit versus progress

In its November 2023 report, The Oil and Gas Industry in Net Zero Transitions, the IEA outlined a fundamental paradox for the fossil fuel sector. With trillions of dollars at stake, the industry faces a choice: continue expanding fossil fuel operations or acknowledge that a genuine clean energy transition requires scaling back oil and gas production over time. This uncomfortable truth — that reducing fossil fuel consumption is essential for achieving net zero — directly contradicts Big Oil’s business model.

High oil demand for the foreseeable future creates little incentive for these companies to invest in disruptive green technologies. Instead, they are positioned to profit by maintaining the status quo, perpetuating an ideology that prizes short-term shareholder returns over long-term environmental sustainability. The implications extend beyond industry profitability; they affect global climate stability and economic resilience in an era defined by rapid technological and market shifts.

Green energy’s independent ascent: A new narrative

A powerful counterpoint to Big Oil’s narrative is the explosive rise of the solar industry — a sector that has thrived largely without fossil fuel support. Despite persistent efforts by Big Oil to block the transition, the solar market has expanded at an astonishing pace, driven by technological breakthroughs, falling costs, and robust government incentives. Solar’s rapid expansion is propelling renewables toward supplying nearly half of global electricity demand by 2030. This growth illustrates a critical truth: the future of sustainable energy does not depend on the fossil fuel giants.

Solar and wind power have demonstrated that innovation, coupled with market-driven investments and supportive policies, can overcome even deeply entrenched interests. As governments worldwide prioritise clean energy, these sectors show that a green future is achievable independently of Big Oil. This emerging narrative reshapes the global energy debate, shifting the focus from outdated fossil fuel interests to forward-looking renewable investments.

China’s leadership in renewables: Setting a global benchmark

While Big Oil clings to short-term profit models, China has decisively positioned itself as a global leader in renewable energy. Over the past 15 years, China has transformed from a follower to a leader in green technologies, surpassing competitors in wind and solar installations. Today, China not only boasts the world’s largest renewable infrastructure but also drives technological innovation and market expansion in the clean energy sector.

Chinese investments in clean technology manufacturing have surged dramatically — in 2024, nearly $680 billion was invested in the sector, according to the IEA. This massive commitment has bolstered domestic capabilities and enabled China to capture a significant share of the global market. Ongoing government support through subsidies and strategic policies continues to drive renewable installations and sales, even as some subsidy programs wind down.

Beyond domestic success, China has strategically expanded its influence in emerging markets. In 2024, Chinese exports of electric vehicles (EVs), batteries, and solar and wind products to the Global South accounted for a record 47% of the total. This aggressive expansion not only cements China’s leadership in renewables but also extends its influence over global energy standards and markets. By setting new benchmarks in clean technology and infrastructure, China is reshaping the geopolitical landscape and challenging the longstanding dominance of fossil fuels.

US policy under trump: Market forces, policy, and global implications

In sharp contrast to China’s long-term strategy, US policy under President Donald Trump risks fostering confusion and instability in global energy markets. One of Trump’s earliest moves in his second term was withdrawing the United States from the Paris Climate Agreement for the second time — just days after re entering the White House. This abrupt reversal signalled a renewed prioritisation of domestic fossil fuel production over multilateral climate commitments, reinforcing skepticism about US policy consistency.

The implications of this policy shift could be profound. The repetitive cycle of entering and then withdrawing from international frameworks erodes US credibility on the global stage and creates long-term policy uncertainty. Companies facing an unpredictable regulatory environment hesitate to commit to the long-term investments required for a clean energy transition. The lack of stable policies undermines investor confidence, slowing innovation in renewables and clean technologies.

At the same time, Trump’s aggressive push to boost domestic energy production has sent mixed signals to global investors. Although these policies have temporarily buoyed fossil fuel markets, they reinforce a short-term outlook that prioritises immediate economic gains over the long-term need for sustainability. Rather than accelerating a shift toward renewables, US policies under Trump are likely to deepen the divide between short-term profit motives and long-term environmental imperatives, effectively ceding leadership to countries like China that are decisively investing in green energy.

Market forces remain a critical factor in shaping the energy transition, but policy vacillation undermines their effectiveness. As global energy markets evolve, stable and predictable policies are crucial for attracting investments in renewables and fostering technological innovation. US policy inconsistency not only weakens domestic efforts to build a diversified energy portfolio but also diminishes the country’s influence in global climate action. In contrast, nations with clear and consistent strategies — such as China and the European Union (EU) — are positioning themselves as the dominant players in the future energy landscape.

The broader geopolitical implications of US policy uncertainty are significant. As other nations strengthen their commitments to sustainability, the US risks losing its competitive edge in the global energy transition. This not only impacts economic leadership but also reshapes alliances, trade relations, and investment flows. If the US continues to oscillate between climate commitments and fossil fuel expansion, it may find itself sidelined in the energy markets of the future, where stability and foresight are paramount to success.

The three paths of big oil: divergent strategies and their implications

The varying approaches among major oil companies further illustrate the gap between rhetoric and action, with broader implications for the energy transition. Each company’s strategy reflects distinct priorities, constraints, and dilemmas:

1. Incremental adaptation: Exxon Mobil and Chevron have focused on “cleaning up” their operations by investing in technologies like carbon capture and hydrogen. However, these efforts appear more as measures to mitigate environmental impact than as genuine attempts to transition away from fossil fuels. Since the end of 2019, Exxon Mobil has increased oil and gas production by 15%, while Chevron has expanded by 9%. Their approach suggests a preference for maintaining their core fossil fuel businesses while making incremental improvements to emissions management rather than embracing a full-scale shift toward renewables.

2. Strategic reversal: BP and Shell initially positioned themselves as leaders in the electrification trend by making significant forays into renewables. However, these investments often came at the expense of their core oil and gas operations, a trade-off that ultimately proved unsustainable. For example, BP’s former CEO Bernard Looney championed a transformation into an integrated energy company, only for BP recently to revert to prioritising higher-margin fossil fuel projects two years later following his departure. This oscillation highlights internal uncertainty and reinforces the broader market perception that traditional energy investments remain more profitable than renewables.

3. Balanced diversification: TotalEnergies has attempted to balance traditional energy production with renewable investments, using revenue from oil and gas to finance clean projects. CEO Patrick Pouyanné’s remark at International Energy Week in London — “I need the cash in charge if I want to finance the diversification” — illustrates this delicate balancing act. While this approach presents a potentially viable model for a more diversified portfolio, its success is critically dependent on stable policy environments. US policy uncertainty, as previously discussed, undermines such conditions, posing challenges for TotalEnergies and other companies seeking to contribute meaningfully to the energy transition.

Each of these divergent strategies reflects different priorities and constraints. Exxon Mobil and Chevron’s incremental mitigation underscores a commitment to immediate profitability over bold change, BP and Shell’s renewable foray and reversion highlight internal conflicts and the high stakes of transitioning away from established revenue streams, and TotalEnergies’ balanced diversification illustrates the delicate challenge of funding a green transition through fossil fuel cash flows in an uncertain regulatory landscape.

Implications for the energy transition

The contrasting trajectories of Big Oil, China, and US policy offer crucial lessons for the energy transition. First, the fossil fuel industry’s persistent resistance to change underscores that profit-driven motives remain fundamentally at odds with the urgent need for sustainability. Despite its vast resources, Big Oil has prioritised short-term financial gains over long-term environmental stability, delaying the systemic change required for a cleaner future.

In contrast, China’s rapid scale-up of renewable infrastructure — driven by consistent policies and substantial financial commitments — demonstrates that focused, long-term investment can overcome entrenched interests. Its approach has set new benchmarks in clean energy development, proving that innovation and strategic expansion, rather than reliance on fossil fuels, define leadership in the global energy transition.

Meanwhile, US policies under President Donald Trump are creating additional obstacles. By withdrawing from key international climate agreements and prioritising fossil fuel production, the administration ceded leadership to China and introduced policy uncertainty that stifled investment in clean energy. Companies like TotalEnergies, which seek to balance traditional and renewable portfolios, require stable policy frameworks to drive meaningful change. The inconsistency of US energy policy risks undermining the very innovation needed to compete in the emerging clean energy economy.

As the world nears critical climate tipping points — with record levels of carbon dioxide and methane — the urgency for decisive action has never been greater. The IEA’s call to freeze new oil and gas projects and its projection that renewable energy capacity will nearly triple between 2023 and 2030 highlight the diminishing role of fossil fuels. The transition to a sustainable energy future will not be led by industries that have profited for decades from hydrocarbons but by those willing to embrace breakthrough technologies, invest in renewables, and collaborate globally.

For policymakers, industry leaders, and investors, the message is clear: sustainable, long-term strategies must take precedence over short-term profit. Big Oil’s history of obstruction serves as a cautionary tale, while China’s proactive investments provide a blueprint for success. In this rapidly evolving landscape, stable and predictable policies are essential for fostering an environment where clean energy can thrive. By learning from the past and recognising the transformative potential of renewable energy, the global community can forge a future defined not by outdated paradigms but by innovation, cooperation, and long-term vision.

See on illuminem's Data Hub™ the sustainability performance of BP, Shell, TotalEnergies, and Exxon Mobil.

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