On July 28, 2026, according to the latest report from energy consultancy Wood Mackenzie, the five largest European oil majors - BP, Shell, TotalEnergies, Eni, and Equinor - totaled 48 billion euros in new energy capital expenditure in the first half of 2026, up 30% year-over-year. This data shows that despite global oil prices hovering around $85 per barrel, oil companies have not slowed their energy transition; instead, they have accelerated investments in wind, solar, and hydrogen projects.
Investment Structure Shift: From Traditional Oil & Gas to Diversified Energy
The report indicates that the share of new energy investment in the five majors' total capital expenditure has risen from 18% in 2025 to 24%, and is expected to exceed 30% by 2028. Offshore wind power has become the biggest hotspot, accounting for 45% of new energy investments, with major projects concentrated in the North Sea, Asia-Pacific, and the US East Coast. For example, Shell and its partners officially commissioned the Hollandse Kust West wind farm in the Netherlands in June, with an installed capacity of 1.5 gigawatts; BP invested 3.5 billion euros to acquire a stake in French solar developer Neoen to expand its solar footprint in Europe.
Hydrogen Investment Rising: Green Hydrogen Becomes New Focus
Notably, green hydrogen project investments grew significantly in this quarter, accounting for 12% of total new energy investment, up from 8% in the same period last year. TotalEnergies announced plans to build a 200-megawatt electrolyzer plant in Spain, scheduled to begin production in 2028, aiming to supply clean hydrogen for Europe's steel and chemical industries. Equinor, in cooperation with German energy company RWE, is developing a large-scale offshore wind-to-hydrogen project in Norway, with an expected annual output of 100,000 tons of green hydrogen.
Policy Drivers: EU Carbon Border Tax and REPowerEU Targets
Analysts believe that the primary driver accelerating European oil majors' new energy investments is EU policy pressure. The EU Carbon Border Adjustment Mechanism (CBAM) has been fully implemented since 2026, imposing carbon tariffs on imported products, forcing oil and gas companies to find low-carbon alternatives for their downstream petrochemical products. Additionally, the EU REPowerEU plan requires renewable energy to account for 45% by 2030, prompting member states to increase the scale of renewable energy auctions, providing companies with stable revenue expectations.
The continued rise in carbon allowance prices is also a key factor. The average carbon price in the EU Emissions Trading System (EU ETS) reached €120 per ton in the first half of 2026, up 15% from 2025, sharply increasing cost pressure on traditional fossil fuel projects and proportionally boosting the relative returns of new energy investments.
Market Reaction and Shareholder Return Pressure
Despite strong investment growth, market sentiment on the majors' transition strategies remains divided. In the second quarter of this year, the average stock price of the five majors rose only 2%, underperforming the 5% gain of the European Stoxx 600 index. Some investors worry that an overly rapid transition may erode short-term profitability, especially as oil businesses still contribute over 80% of cash flow.
At its Investor Day in May, BP announced it would raise its 2027 renewable energy capacity target from 50 GW to 65 GW, while maintaining an annual $4 billion share buyback program. This move sparked dissatisfaction among climate activist shareholders, who demanded further cuts in oil and gas production. TotalEnergies adopted a more balanced strategy, spinning off its new energy division into an independent subsidiary and bringing in sovereign wealth funds as strategic shareholders to reduce reliance on parent company capital.
Emerging Market Opportunities: Green Hydrogen Exports from Middle East and Asia
European oil majors are also looking overseas, especially at the green hydrogen industry in the Middle East and Asia. Eni is collaborating with UAE's national oil company ADNOC to build a large hydrogen hub in Abu Dhabi, expected to start exporting blue and green hydrogen to Europe by 2027. Shell signed a memorandum of understanding with Sinopec to develop a wind-solar hydrogen project in Inner Mongolia, with products to be exported to South Korea and Japan via a "hydrogen corridor."
Outlook for H2 2026: Can Investment Enthusiasm Continue?
Looking ahead to the second half of the year, analysts generally expect new energy investment to continue growing, but at a slower pace. Key risks include: First, if oil prices fall sharply below $70, oil companies may be forced to cut non-core spending; second, the U.S. Federal Reserve's high interest rate environment raises financing costs for new energy projects; third, power grid infrastructure bottlenecks in some countries may delay grid connection for wind and solar projects.
However, from a long-term perspective, the energy transition of European oil majors is irreversible. David Smith, Vice President of Wood Mackenzie, said: "These companies are transforming from pure oil producers into comprehensive energy suppliers. In the next five years, new energy businesses are expected to contribute 20% to 30% of group total profits, becoming a pillar business alongside oil and gas."
For Thai investors, this transition wave also offers new allocation opportunities. The Thai government is promoting electric vehicles and green hydrogen industries, and plans to set up a renewable energy park in the Eastern Economic Corridor (EEC). Investors can watch related stocks and ETFs, such as the Global X Hydrogen ETF (HYDR) or the iShares Global Clean Energy ETF (ICLN), to participate in the global energy transition dividend.
