(Reuters) – Exxon Mobil said it has expanded an agreement to buy more renewable diesel from Global Clean Energy’s biorefinery in Bakersfield, California, as climate policies pressure companies to cut their carbon emissions and opt for cleaner fuels.
The largest U.S. oil producer has been facing pressure from environmentalists and investors to do more for climate change and for the first time, it reported emissions from burning its fuels such as gasoline and jet fuel earlier this year.
Earlier this month, the Treasury Department released details of a tax hike proposal that would replace subsidies for fossil fuel companies with incentives for production of clean energy under President Joe Biden’s infrastructure plan.
Exxon said its five-year deal will commit it to purchase up to 5 million barrels of renewable diesel per year from Bakersfield biorefinery, up from 2.5 million barrels as per the original agreement signed in August 2020.
The biorefinery, on schedule to begin production in early 2022, will process up to 15,000 barrels per day of renewable feedstock.
Exxon said it plans to distribute the renewable diesel within California and potentially other U.S. and international markets.
(Reporting by Arundhati Sarkar in Bengaluru; Editing by Shinjini Ganguli)