Oil Subsidies

BP and Shell, those self-styled pioneers of the "energy transition," have once again shown their true colours. Faced with the choice between leading the charge into a sustainable future or stuffing their pockets with oil money, they’ve chosen the latter with all the subtlety of a fox in a henhouse. Shareholders, no doubt salivating over the prospect of more fossil-fuelled dividends, have voted overwhelmingly to keep the gravy train rolling. And why wouldn’t they? The system is rigged in their favour.

Let’s talk subsidies. We are told endlessly that renewable energy must stand on its own two feet, that wind farms and solar panels must prove their worth without "distorting the market" with public money. And yet, the fossil fuel industry – mature, staggeringly profitable and responsible for torching the planet – is showered in taxpayer-funded perks like a spoilt aristocrat. Globally, fossil fuel subsidies exceeded $7 trillion last year. Yes, trillion. That’s seven thousand billion in a single year to prop up an industry that already rakes in obscene profits.

BP and Shell are no strangers to this bonanza. In the UK, they’ve been handed generous tax reliefs on North Sea drilling, ensuring oil and gas extraction remains artificially lucrative. In the US, tax incentives keep the fossil fuel spigot flowing with predictable regularity. Meanwhile, the renewable sector gets a patchy, uncertain deal – thrown a few bones when the political wind blows in the right direction, then left to fend for itself when the fossil fuel lobbyists get their way.

It’s no surprise, then, that BP is slashing its planned investment in renewables. They initially pitched themselves as green pioneers, but that was just window dressing for the real business of pumping more oil and gas. They’ve cut their renewable energy spending to between $1.5 billion and $2 billion a year while boosting fossil fuel investment to a cool $10 billion. Shell, never one to miss out on a payday, has followed suit, allocating just 8% of its budget to renewables while the rest is poured into the same old dirty business.

And the excuse? "Renewables aren’t delivering the expected returns." Of course they’re not – because these companies never intended to make them work. When you invest peanuts in green energy while hoarding subsidies for oil and gas, the outcome is predictable. It’s the equivalent of tying someone’s shoelaces together and then berating them for not running fast enough.

It’s not just corporate greed at play here. Governments, too, are complicit. They wring their hands about climate change, make grand promises at international summits and then quietly funnel billions into propping up the very industry responsible for the crisis. If our leaders were serious about the energy transition, they’d scrap fossil fuel subsidies altogether and redirect those funds to renewables. Instead, they continue to coddle BP and Shell, who are more than happy to take the money and run.

And then there are the institutional investors – hedge funds, pension funds and asset managers – who pour billions into fossil fuel stocks while claiming to care about sustainability. These are the same entities that demand higher returns quarter after quarter, pushing BP and Shell to double down on oil and gas rather than risk short-term losses on renewables. Their idea of "responsible investing" is a greenwashed marketing campaign while they quietly profit from environmental destruction. If they were serious about climate change, they’d shift their capital towards genuinely sustainable enterprises, rather than rewarding companies that drag their feet on the transition.

So here we are, once again watching the same tired pantomime. Big Oil pretends to care, governments pretend to regulate, and shareholders – including powerful institutional investors – pretend they have no choice but to chase profit at the planet’s expense. All the while, the climate crisis accelerates, and the window for meaningful action closes. BP and Shell aren’t transitioning to anything other than bigger profits. And until the subsidy scam is shut down, they’ll keep milking the system for all it’s worth.