LONDON — BP has pledged to eliminate carbon emissions from its operations—and halve the carbon intensity of products such as gasoline and diesel—by 2050.
In an announcement made by incoming CEO Bernard Looney, BP is committing to reach net-zero carbon emissions by 2050 or sooner—or the equivalent of 415 million tons of carbon-dioxide equivalent per year, including in its oil and gas production activities. BP aims to cut the carbon intensity of its energy products by 50% by 2050 or sooner. This includes fuels, natural gas, biofuels and electricity but not lubricants or petrochemical feedstocks. And it will aim to increase the share of its investment in non-oil and gas businesses, as well as slash the methane intensity of its operations by 50%.
As part of its pledge on carbon emissions reductions, Looney said BP will increase its advocacy of policies such as carbon pricing and set “new expectations” for its relationships with trade associations, including “being prepared to leave those where alignment cannot be reached” with its position on climate change. In 2019, Royal Dutch Shell announced it would leave the American Fuel & Petrochemical Manufacturers Association (AFPM) because of its stance on climate-change policy, and it highlighted its disagreements with the American Petroleum Institute and U.S. Chamber of Commerce, Bloomberg reported. Several oil companies also support a national carbon tax in the U.S.; in 2019, BP joined Shell and ExxonMobil in Washington to lobby lawmakers to pass a carbon tax, The Hill reported.
BP would also tie a portion of employees’ compensation to hitting emissions reductions targets, and form a new team to develop clean energy and mobility solutions and to help other companies, countries and cities decarbonize.
Despite the net-zero pledge, BP will “very likely” still be producing and refining hydrocarbons in 2050—but less of them, Looney said.
“We will increasingly focus our investments on the highest-quality barrels and drive returns and cash flow, not production volumes,” he said in a Q&A announcing the news. “And with that, you can expect oil and gas production to decline gradually over time.”
These hydrocarbons would be decarbonized in some way, Looney said, “But we can only reimagine energy if we are financially strong, able to pay the dividend our owners depend on—and generate the cash needed to invest in new low- and no-carbon businesses.”
To support the emissions goals, BP is eliminating its upstream and downstream structure and creating 11 teams separated into four business units: production and operations; customers and products; gas and low-carbon energy; and innovation and engineering. BP’s branded retail business, which include more than 6,500 independently owned BP-branded sites and approximately 165 Amoco-branded locations, as well as its Arco/ampm network of more than 1,000 locations, would be part of the customers and products business unit, Michael Abendhoff, director of media affairs, U.S. downstream, told CSP Daily News.
“The details are still in development, but BP remains committed to our branded marketers and their success,” said Abendhoff via e-mail.
“We need to reinvent BP,” Looney said. “Our historic structure has served us well but, in order to keep up with rapidly evolving customer demands and society’s expectations, we need to become more integrated and more focused. So we are undertaking a major reorganization, introducing a new structure, a new leadership team and new ways of working for all of us.”
The gas and low-carbon energy unit will combine BP’s global energy teams to focus on low-carbon solutions, pursue decarbonization opportunities and new growth areas such as hydrogen and carbon capture, utilization and storage (CCUS). The same day as BP’s announcement, a group of Republican legislators in the U.S. House of Representatives introduced a bill that would incentivize CCUS through a tax credit and support research and development of carbon capture and utilization technology, The Hill reported.
On the low-carbon fuels front, BP has grown its involvement in solar and wind energy, biofuels and electric vehicle (EV) charging. In 2019, BP opened the first in a nationwide network of BP Chargemaster EV charging stations planned for its branded sites in the United Kingdom.
London-based BP will share more details on how it will carry out its net-zero emissions pledge during a capital markets event in September.