In February, BP announced a bet (mostly) to reach non-zero CO2emissions by 2050, a remarkable course change driven by new CEO Bernard Looney. BP has long tried to encourage interest in greener activities, but these promises have led to more serious change.
On Monday, the company released some specifics for the next decade, describing “a new strategy that will be changed [BP’s] business as it moves from an international resource-focused oil company to an integrated energy company focused on offering solutions to customers. “The new details are focused on investors, as the plan includes about a 50 percent reduction in dividends for shareholders. This money will instead go to pay off debts ̵
BP says it will increase investment in “low-carbon” from $ 500 million to about $ 5 billion a year by 2030. This includes building renewable energy up to 50 gigawatts of power, as well as pushing the emerging hydrogen, biofuel and carbon industries. It also includes betting on the electric vehicle charging business, with the goal of expanding from the current 7,500 charging points to over 70,000.
On the oil and gas side, the announcement actually promises a 40 percent drop in production by 2030, from 2.6 million barrels per day to 1.5 million. BP also said it expects its refining operations to drop from 1.7 million barrels per day to 1.2 million.
BP’s bet to hit net zero CO2 emissions by 2050 are a bit tricky. An oil company’s emissions can be broken down into “band 1” (energy used by the company itself), “band 2” (emissions from other suppliers on which the company relies), and “band 3” (emissions from oil combustion and gas that the company sells). Emissions from Scope 3 typically represent the vast majority of total emissions for companies in this sector, but these companies would prefer to consider these emissions as someone else’s responsibility.
BP promised net zero emissions for all three categories, but only by splitting hairs and excluding part of the emissions from range 3. The company promised to substantially offset oil and gas emissions produced and is sold, but not on the oil and gas it refines for other manufacturersInstead, it promised to reduce the “carbon intensity” – a reduction per unit of energy – of everything it sells.
Did I understand all this? The new Communication sets out 2030 key milestones for each of these emission categories: reducing emissions from band 1 by 30 to 35 percent, emissions from band 2 to 35 to 40 percent and reducing the carbon intensity of “marketed” products by 15 percent.
BP sets its target of zero by 2050, coinciding with the action needed to limit global warming to 1.5 ° C – the same point at which global emissions must also reach zero. However, leaving part of its activity outside the target (claiming that other producers are responsible) would mean that net zero is not guaranteed at any point if these emissions are included.
BP’s targets will also rely on offsetting emissions through CO removal efforts2 from the atmosphere. This introduces another wild card, as compensated programs do not always provide the promise of elimination, and audits to detect these shortcomings are not trivial tasks. But at least on paper, BP’s stated ambition far exceeds what most of the industry has pointed out.