Absorb and control. How oil multinationals justify abandoning renewable energy businesses?

Climate change has prompted energy systems to innovate into new and cleaner technologies to solve excess CO2 emissions. For nearly 20 years now, oil multinationals as large energy players have both acquired and abandoned renewable energy companies, often following policy opportunities. To date oil companies have made little progress overall to advance their businesses in cleaner technologies despite holding significant resources, prompting to question the role of oil multinationals have played in the energy transition and the use of policy mechanisms by this type of players. Using a database of 3,000 financial deals for a sample of seven oil major companies in Europe, we analyse the merger and acquisitions waves of alternative technologies to oil, as well as the chains of investment disposals. In order to identify the policy contexts associated to each deal, we coded and selected all renewable energy deals. We then complemented the 221 resulting deals with its associated press release, and manually coded explicit mentions to forms of state aid and policy for three main renewable technologies: solar, wind and biofuels. The data allows to compare similar companies’ investment behaviour per technology to show how oil multinationals renewable investment behaviour varies with different state aid mechanisms, its expansion across regions, and how changes of government support to renewables has being used by oil multinationals to justify exiting or returning to renewable technologies. Our data shows that European oil majors have used their renewable energy investments as a form of control over the energy transition dynamics. In the grip of mounting climate pressure, we are now starting a new wave of renewable energy investments by oil multinationals. This research will provide concepts and tools to assess if the current investment wave is different from past.