BP targets to reduce its absolute emissions account for less than a fifth of its total greenhouse gases, with material sales excluded, a new study shows.
The London-based oil and gas company set out a strategy two years ago to drastically slash emissions from its operations and products by 2050, while promising to ramp up investments in cleaner sources of energy. But Global Climate Insights estimates that oil and gas products will still account for 91% of its sales by the end of the decade.
“We find that under BP’s net zero plans, oil and gas products remain the primary driver of earnings,” GCI Lead Analyst Shu Ling Liauw said. “We are seeing a trend in the sector where ‘net zero’ strategies are completely detached from real business strategies and outcomes.”
The report is GCI’s second to cast doubt on an oil major’s energy transition plans. Last year, the researcher said that Shell was on a path to miss its own emissions goals. GCI said there’s a disconnect between greenhouse gas emissions indicated by BP’s revenues, those it discloses and its own reduction targets.
“We have set a net zero ambition covering operations, production and sales by 2050 or sooner and have nearer term targets and aims for emissions reductions,” BP said in a statement, noting that it hadn’t seen the report and couldn’t comment on the data used.
Emissions disconnect
The researcher, an initiative spun out of shareholder advocacy group the Australasian Centre for Corporate Responsibility, estimates BP’s total emissions in 2019 were the equivalent of about 2.43 billion tons of carbon dioxide. That’s 145% more than BP accounted for in its own emissions inventory.
This isn’t the first time BP has embarked on a strategic shift into renewables. In the 2000s, then-CEO John Browne steered the company into the ill-fated Beyond Petroleum campaign which resulted in billions of dollars of writedowns. “This time is different,” said GCI, thanks to clearer global policies and investor support.
Still, BP could ultimately undermine its ability to set clear climate targets because of its business aims, the researcher says. While BP has committed to reducing oil and gas production by 40% by the end of the decade, it has also said it will expand marketed third-party oil and gas sales, which will lead to an increase in overall marketed emissions.
BP’s plans will not deliver a cut to emissions, says GCI. The researcher says investors must ask the firm for a complete emissions inventory and business plans to move away from hydrocarbons.
