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New BP CEO pledges to make oil giant carbon neutral by 2050

Oscar Williams-Grut
Senior City Correspondent, Yahoo Finance UK
The Oil industry company BP logo seen in Krakow. (Omar Marques/SOPA Images/LightRocket via Getty Images)

One of the world’s largest oil companies has pledged to become net emissions neutral by 2050, marking one of the most ambitious climate targets in the energy industry.

BP said in a statement on Wednesday it would aim to reach net zero emissions “by 2050 or sooner” and would push to get the world net neutral over the same time scale. BP (BP.L) pledged to lobby for carbon taxes around the world and said it would launch a new team to “help countries, cities and large companies decarbonise”.

“The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero,” new BP chief executive Bernard Looney said in a statement.

The pledge represents one of the most ambitious targets in the energy industry, which is a huge emitter of greenhouse gases. BP said it emits 415 million tonnes of CO2 equivalents each year, highlighting the scale of the challenge.

Read more: BP lifer Bernard Looney named new CEO as Bob Dudley retires

Looney said taking the world carbon neutral would require “trillions of dollars will need to be invested in replumbing and rewiring the world’s energy system”.

“It will require nothing short of reimagining energy as we know it,” he said. “This will certainly be a challenge, but also a tremendous opportunity. It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change. And we want to change – this is the right thing for the world and for BP.”

New BP chief executive Bernard Looney. Photo: BP

Looney’s pledge represents a significant departure from predecessor Bob Dudley, who had previously called proposals to move to renewable energy by 2050 as “unrealistic” and stressed the continued importance of fossil fuels.

However, the break comes after significant pressure on BP to address climate issues. Looney took over from Dudley at the start of the month and BP’s head office was blockaded by Greenpeace activists on his first day. Climate activists also staged a three day protest at the British Museum this week over BP’s sponsorship of the institution.

BP chairman Helge Lund said Wednesday: “The board supports Bernard and his new leadership team´s ambition for BP. Aiming for net zero is not only the right thing for BP, it is the right thing for our shareholders and for society more broadly.”

Read more: Climate crisis is biggest threat to the planet, warn global elite

BP’s plan involves reducing the carbon ‘intensity’ of its operations — the amount of carbon dioxide released — as well as investing in new, greener energy sources.

“These will be absolute reductions, which is what the world needs,” Looney said.

Looney also announced a radical restructure of the business, aimed at helping the company meet its emission goals. New divisions will be launched looking at low carbon fuels and innovative energy sources.

“Together we will aim to build a more agile, innovative and efficient BP,” Looney said.

Greenpeace activists chained to oil barrels outside the headquarters of oil giant BP in London on February 5, 2020 — Looney's first day as chief executive. (DANIEL LEAL-OLIVAS/AFP via Getty Images)

The new chief executive reassured shareholders that the move to carbon neutrality would not disrupted the finances of the business, promising to protect the company’s dividend. Shares in BP (BP.L) were up 1.2% shortly after the announcement.

Protecting the climate has rapidly risen up the global business agenda over the last 12 months, as extreme weather events and heat-related fires have hit countries like the US and Australia. The World Economic Forum (WEF) warned business leaders last month that the climate crisis is the biggest threat to the world’s economy.

Read more: Greta Thunberg: 'Pretty much nothing' has been done about climate crisis

The energy sector emits just under half of the world’s greenhouse gases, according to data from the University of Oxford. Global emissions continue to rise and experts warn that the world is straying dangerously off course from climate targets meant to limit global warning to 1.5 degrees.

BP’s pledge may not be enough to satisfy critics. The head of WEF warned last month that radical action was needed in the next 10 years, not 30, to avert climate disaster and teenage climate campaigner Greta Thunberg urged Davos attendees to immediately abandon all fossil fuels.

Greenpeace UK’s executive director John Sauven wrote earlier this month: “If BP's new CEO is serious, the company will quickly abandon oil and gas, and move into renewable energy. Until it does, BP will continue to be a major culprit in the climate emergency.”