BP's ambitious energy target

Katie Ramirez
February 15, 2020

Energy company BP said Wednesday it aims to eliminate or offset all carbon emissions from its operations and the oil and gas its produces by 2050, becoming the latest major company in the industry to set out its ambitions to combat climate change.

"It's an honor to be the first USA oil and gas company to endorse the World Bank's initiative to reduce routine flaring globally, as we amplify our commitment to eliminate routine flaring in our operations by 2030", said Vicki Hollub, Oxy's president and chief executive, in a statement.

"We need a rapid transition to net zero". BP resisted shareholder demands to include these emissions in company targets in 2019, but has been forced to respond to growing pressure from the investor community and climate activists to get on board with climate action or get out of the way.

In one of its biggest changes, BP will dismantle the traditional model of an oil and gas production, or upstream, unit and refining, trading and marketing, or downstream, unit.

On Wednesday shares in BP were up over 1% following Looney's announcement.

In addition to reaching net-zero for their own company, the second part of BP's goal is to help the world reach net zero. "We all want energy that is reliable and affordable, but that is no longer enough", said Bernard Looney, who will replace Bob Dudley as CEO on 31 March, in the firm's press release.

Anglo-Dutch group Shell has set Scope 3 targets based on intensity rather than on absolute reduction terms.

Charlie Kronick, Greenpeace UK's oil adviser, said: "BP's "ambitions" and "aims" all seem to apply to Looney's successors, and leave the urgent questions unanswered".

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BP wants to reduce its emissions to net zero from what is now around 415 million tonnes of CO2-equivalent a year.

On a broader level, the company said it would work to promote policies that move society toward net-zero emissions. Doing so would require not only a shift to cleaner energy sources but also coming up with new technologies to offset emissions or extract Carbon dioxide from the atmosphere.

BP did not provide any details, but a spokesman said it will develop near-term plans that will be published at a September investor day or earlier.

Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee and CEO of the Institutional Investors Group on Climate Change, welcomed BP's plan.

"How will they reach net zero..."

The damaging effects of rising global temperatures are increasingly evident and established investors are starting to worry about the vulnerability of their investment portfolios to a climate crisis. That means that absolute emissions can rise with growing production, even if the headline intensity metric falls.

BP said it will set "new expectations" for its relationships with trade organizations and be prepared to quit them if they were not aligned.

Meanwhile, US groups such as Exxon, Chevron and ConocoPhillips are far less ambitious with their greenhouse gas reduction targets than their European rivals. Customers and products will be led by Emma Delaney, gas and low carbon energy by Dev Sanyal, while innovation and engineering will be led by David Eyton.

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