Equinor Shades of Green: Measuring Public Willingness to Pay for Low-Carbon Fuels

The SIPA Capstone team was engaged by Equinor ASA’s Marketing, Midstream, and Processing (“MMP”) strategy group to explore public willingness to pay (“WTP”) for low-carbon fuels (“LCFs”) such as eMethanol, sustainable aviation fuel (SAF), and low-carbon ammonia. Rather than examining WTP from the point of view of an offtaker, the focus was on societal acceptance, which considers consumer behavior, public sentiment, and economic tolerance for climate-related costs.

To address the complexity of this topic without relying on resource-intensive surveys, the team developed a “Willingness to Pay Index.” This index incorporated normalized cross-country data, large-scale news scraping, and Python-based natural language processing to extract sentiment related to LCFs. These insights were then correlated with policy frameworks, macroeconomic conditions, and fuel cost premiums. Key findings included two notable insights. First, public sentiment tends to decline when energy transition costs appear as opaque transfers from consumers to producers unless clear, economy-wide benefits are evident. Second, rising climate awareness does not consistently result in higher WTP. Instead, sentiment is more closely tied to factors such as policy durability, perceived feasibility of climate goals, and economic impacts.