In a move which is becoming emblematic of these times, BP has announced that it is transitioning from an international oil company to an integrated energy company. It will reduce its fossil fuel output by 40% over the next 10 years with the aim of meeting their previously stated target of being net zero carbon by 2050.
When BP announced in February their net zero carbon target, it was criticised by climate non-governmental organisation, Global Witness, as “not credible” due to a lack of specific plans. BP began the process of delivering on their pledge in June by striking a deal to sell most of its petrochemicals business.
Their latest statement released on August 4th includes a commitment to increase their low-carbon investments eight-fold by 2025 and ten-fold by 2030 in addition to the 40% reduction in fossil fuel output. Greenpeace have welcomed the news as indicating that “BP has woken up to the climate emergency” but added that the company “must go further and ditch its share in Russian oil company, Rosneft”.
Whatever plans BP had to become the latest organisation to join the fossil fuel divestment movement, they were probably accelerated by the record loss of almost £13bn which they reported in their second quarter results. The company also announced a dividend cut as the economic disruption caused by the Covid-19 pandemic made its impact felt on oil prices.
The 40% reduction translates as more than one million barrels of oil a day and follows recent announcements from OPEC that oil production was being decreased in a bid to stabilise falling prices.
BP’s chief executive, Bernard Looney, said the next decade would be critical in the fight against climate change and that BP would “deliver a decade of delivery”. Approval of BP’s plans extended beyond environmental groups as the company’s share price ended the day up 6.5%.