Hydrocarbons remain at the heart of BP’s strategy
BP expands comfort and mobility business in new markets
Collaboration is key to the industry’s net zero goals
The COVID-19 pandemic has had a dramatic impact on energy markets and while there have been many challenges, it has also resulted in the momentum building towards a net-zero world, said Carole Howe, executive vice president of trade and the shipping division of BP.
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In 2020, global energy demand is estimated to have decreased by about 4.5%, the biggest drop since 1945, due to a collapse in oil demand, Howe said during a session at S&P Global Platts 37 on 27-29 September.
Around three quarters of this was due to the decline in oil consumption, but the demand for coal and natural gas also fell significantly. Even so, renewable energy, powered by wind and sun, continued to grow significantly, she added.
“In 2020, the wind and solar capacity was increased by 238 GW, which is 50% more than all previous expansions.
“So for us at BP, the renewables response to last year’s events is encouraging as we work towards net zero emissions by 2050 or sooner.”
Additionally, CO2 emissions from energy use decreased by about 6.3% in 2020, Howe said.
The challenge, however, is to achieve a sustainable, comparable year-on-year reduction in emissions, she said.
In 2020, BP announced its new strategy paving the way for the transition from an oil company to an integrated energy company, with its strategy mainly based on three pillars – resilient and focused hydrocarbons, comfort and mobility, and low carbon energy.
“So hydrocarbons will still be at the core of our strategy in the coming decades, but we will focus our hydrocarbon business on oil and gas, which is cheaper to produce, can withstand rising CO2 costs and our guidelines for reducing production by around 40% by 2030 “Howe said.
BP sells convenience retail fuels with over 10 million customer touch points, but plans to double that in the next decade.
“We’re going to expand into new markets like India, redefine our convenience offering and build the best EV charging business with well over 10,000 charging points in some of the world’s busiest EV markets like the UK, Germany and China,” Howe said.
BP aims to grow its renewable low carbon power and energy businesses significantly by the end of this decade and is making good progress, Howe said.
“We have expanded our low-carbon energy pipeline from 4 GW in 2019 to 21 GW today and are also expanding our solar pipeline,” she said, adding that BP is also investing in offshore and onshore wind projects.
Take others with you on the journey
“To achieve net zero, we need BP to achieve net zero, and we also need to help the world reach net zero,” Howe said. “Among other things, we are more actively committed to an ambitious climate protection policy in order to support net zero, and that includes carbon pricing.”
However, there is also a need to work with governments, regulators and lawmakers in developing policy proposals for the whole company.
“We have publicly supported the European Commission’s proposal for the economic recovery plan, the reconstruction fund and the climate plan, as well as the European Commission’s climate target for 2030 and the overall goal of achieving climate neutrality in the EU by 2050,” said Howe.
In Asia, BP is working with the Indonesian government and has completed the feasibility study to develop the first major project to utilize and store CO2 in Tangguh LNG, Howe said. Tangguh LNG is a uniform development of six gas fields in the production joint ventures Wiriagar, Berau and Muturi in Bintuni Bay, Papua Barat.
On the shipping side, BP recently signed the Call to Action for Shipping Decarbonization, an initiative supported by industry leaders and the Getting to Zero Coalition Task Force to enable full decarbonization of international shipping by 2050, ahead of the COP 26 also call on governments to work with industry on the actions and investments needed to reach critical turning points in the decarbonization of global supply chains and the world economy.
“We have to support political work, but we also have to work actively together in a number of areas, and in trade and shipping we do just that,” Howe said.
BP recently signed an agreement with Japanese shipping company NYK Line to work on future fuels and transportation solutions to help decarbonise industrial sectors, including shipping.
In addition, there is a strategic partnership with the Mærsk Mc-Kinney Moller Center for Zero Carbon Shipping to develop new alternative fuels and CO2-free solutions for the shipping industry.
BP is also increasingly carrying biofuel blends on its ships and making biofuel supplies to shipping customers in key ports.
“If we work together, we can accelerate development, reduce investments and give signals to the market that can, for example, help accelerate the decarbonization of the shipping industry,” said Howe.
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