By Anders Lorenzen
Back in 2000, BP wanted to send a strong signal that they were serious about tackling climate change and had become an environmentally friendly company. The British oil and gas giant British Petroleum was fronting a campaign called Beyond Petroleum, after having bought up some solar and wind assets. Years later they had sold off those assets, and campaigners speculated that the original purchase had just been a greenwashing PR stunt.
But now as the COVID-19 crisis is seriously hurting the oil industry, BP is getting serious again about diversifying away from fossil fuels. And this time their declared intentions seem to be true.
A new direction
The company have announced that within the next decade they will transition away from fossil fuels to low-carbon energy. In their plan to transform the company, they will increase the budget for low-carbon technologies within the next 10 years from $500m, or 3% of its total spending, to $5bn, or almost a third of its budget. This spending would increase its renewable energy capacity twentyfold and would also include investments in carbon capture, bioenergy and hydrogen production.
In addition to this, BP will also halve shareholder dividends which will fund investments in clean energy. BP was the FTSE 100’s biggest dividend distributor, with payouts this year set to reach £6.7bn for its shareholders, which include thousands of individual investors. The company will save over £3bn every year by paying out 5.25 cents per share, down from 10.5 cents. And they will cut their daily oil production by a million barrels to 1.5 m barrels per day, and rule out oil exploration in new geographical areas.
Net-zero by 2050
Bernard Looney, the recently appointed chief executive of BP, promises to grow low-carbon investments eightfold by 2025 and tenfold by 2030 and cut fossil fuel output by 40% from 2019 levels. The intention is that the company becomes a net-zero carbon company by 2050. Looney said that the next ten years for BP would be “a critical one in the fight against climate change”.
BP’s move has won them rare praise from the protest group Greenpeace, “ BP has woken up to the immediate need to cut carbon emissions this decade. They must go further and need to account for or ditch their share in [the] Russian oil company Rosneft. But this is a necessary and encouraging start,” said Mel Evans, senior climate campaigner at Greenpeace UK.
The COVID-19 impacts for the company have been huge, and they have reported a record loss of $16.8bn (£12.8bn) for the second quarter, compared with a profit of $1.8bn for the same period last year.