Beyond Petroleum? | WWF
Beyond Petroleum?

Posted on 18 February 2020

It is a measure of how far the climate debate has come that BP, one of the world’s largest producers of fossil fuels, has announced its intention to become net-zero emitting. That this totem of the oil and gas industry – responsible for nearly half a billion tonnes of carbon dioxide (CO2) emissions each year – recognises both the reality of climate change, and the need to transform its business, are certainly positive signals.
 
However, there remains a lack of detail about its plans. There is a lack of urgency, with a date of 2050 for BP to hit net-zero. The company sees “a major role” for hydrocarbons until 2040 and plans to continue investing accordingly. This suggests BP’s management has yet to fully grasp what the climate emergency means for its business.
 
But first, credit where it is due. As its new CEO Bernard Looney said at a speech in London announcing the “reinvention” of BP: “The world’s carbon budget is finite, and it is running out fast. We need a rapid transition to net-zero.”
 
The company is also taking responsibility not only for the emissions from its operations, but also those from the use of its products. It pledges to not only reach net-zero emissions for the 55 million tonnes of CO2 it produces extracting, refining and transporting hydrocarbons and petroleum products, but also for the 360 million tonnes emitted when its products are combusted. This is to be applauded.
 
It is also making the right noises about some of other ways that big emitting companies have influenced our response to climate change: it is vowing to “active[ly] advocate for progressive climate policies” and leave trade associations which don’t share BP’s views on climate change. This is overdue: according to InfluenceMap, BP is spending more than $50m annually on climate lobbying.

The company is also to incentivise its employees to deliver on its net-zero commitments, and will improve its transparency regarding climate change, specifically by implementing the recommendations of the Task Force on Climate-related Financial Disclosures.
 
All well and good. But the suspicion is that BP is kicking the can down the road. Without more detail on how the company plans to get from more than 400 million tonnes of emissions today to net zero in 30 years’ time, it is impossible to judge the credibility of its climate plans.
 
There are crucial questions that BP needs to answer about how soon it plans to shift investments away from hydrocarbons and towards renewables. Looney said only that this change will happen “over time”. If that means after 2030, then that is too late.
 
Clearly, if we are to put the world on a pathway to hold warming to below 1.5°C, there should be no exploration for new oil and gas resources, and no development of additional oil and gas reserves that are not currently producing. Staying within carbon budgets will be hard enough – exploring for new fossil resources is at odds with the fundamentals of the challenge we are facing. Currently, there is no commitment from BP to refrain from additional exploration.
 
This flies in the face of what concerned investor-backed groups believe oil and gas giants like BP need to do. Carbon Tracker, for example, has calculated that BP would need to cut production by 25% by 2040 to meet the requirements of the Paris Agreement.
 
It needs to go further and transform its business model. Pathways exist for energy industry transition. Denmark’s Ørsted transformed itself in 10 years from an oil and gas company into a renewables powerhouse.
 
In the meantime, BP should participate iin developing science-based decarbonization methods through science-based targets. The  Science Based Targets initiative is currently developing sector guidance for oil and gas; many oil and gas companies are providing technical input into this process, although BP has not done so to date.
 
It is difficult to properly assess the sincerity of BP’s announcements, and the credibility of its 2050 commitment, without further details about how it plans to meet its  commitment, particularly in the near term. BP must come with a near term target in line with their decarbonization trajectory. 

It needs to explain which measures will be taken directly through business model and technology changes, and which will be handed off to others in the form of offsets and downstream carbon capture and storage. It needs to put its money behind the pledge, and immediately ramp up its renewables investments while winding down its hydrocarbon spend.
 
Looney promises more detail at an investor day in September, six months from now. Hopefully then it will become clear if BP is finally moving 'beyond petroleum'.

Jesse Fahnestock is global lead for WWF’s energy transition work.
 
BP announces a goal of being net-zero by 2050.
© flickr Mike Mozart