Unpacking BP’s Net-Zero Strategy
From oil giant to green pioneer, explore BP's strategy for achieving net-zero emissions.
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Unpacking BP’s Net-Zero Strategy
From oil giant to green pioneer, explore BP's strategy for achieving net-zero emissions.
Published:
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Unpacking BP’s Net-Zero Strategy
From oil giant to green pioneer, explore BP's strategy for achieving net-zero emissions.
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Transforming BP: Journey to Net-Zero

bp’s net zero goals and progress towards achieving them

bp, a leading global energy company, has set ambitious goals to achieve net zero carbon emissions by 2050. The company recognises the urgent need to address climate change and transition to a low-carbon economy.

bp aims to minimise carbon emissions throughout operations and production processes. By embracing sustainability principles, bp seeks to reduce its environmental impact.

bp’s strategy includes five aims

  1. Moving to net zero operations by 2050 (scope 1 and 2 emissions goal).
  2. Move to net zero on an absolute basis across the carbon in their upstream oil and gas production by 2050 (scope 3 aim).
  3. Reducing reduce the carbon intensity of the energy products sold to 15-20% by 2030 and net zero by 2050
  4. Install methane measurements at all major oil and gas processing sites by 2023. This data will drive a 50% reduction in methane emissions.
  5. Increase investment made into non-oil and gas businesses to $6-8bn by 2025.

bp's aims for net zero operations/production/sales, reducing methane and investing into the energy transition

Five aims to get bp to net zero (Source: bp)

Read more in the bp sustainability report

Emissions reduction targets and strategies

bp has set specific targets for reducing carbon emissions across all scopes. The company aims to reduce scope 1 and scope 2 emissions by 20% by 2025 and 50% by 2030.

For scope 3 emissions, bp targets a 10-15% reduction by 2025 and a 20-30% reduction by 2030.

Chart showing bp's progress in its five aims for achieving net zero - 2022

Chart showing bp’s progress in its five aims for achieving net zero – 2022 (Source: bp)

To achieve these goals, bp has implemented several strategies, including:

  • Methane measurement: Install methane measurement across oil and gas processing sites through enhanced metering, software for flare efficiency, and predictive emissions.
  • Hydrogen usage: Increase the usage of blue and green hydrogen instead of natural gas and grey hydrogen to reduce emissions.
  • Advocacy: Actively advocate for policies related to methane emissions reductions, climate policy and regulation, and zero and low-carbon transportation.
  • Operational emission reduction: Exceeded the 2025 target of 20% emission reductions, with a 41% decrease in combined scope 1 and 2 emissions from the 2019 baseline.
  • Methane reduction activity: Continued efforts to reduce operational methane emissions, with 2.2kt Methane SERs achieved in 2022.
  • Incentivising employees: Link employee annual bonuses to sustainability measures and provide education and advocacy support.
  • Supply chain emissions: bp works closely with its suppliers to encourage emissions reductions and contribute to its net zero targets. This includes setting expectations, monitoring progress, and terminating contracts if necessary.

bp’s strategy is designed to be robust and adaptable to various climate-related scenarios, including those in line with limiting global temperature rise to well below 2°C and 1.5°C.

Climate policy engagement and risk assessment

bp actively advocates for policies related to methane emissions reductions, increased climate policy and regulation, and zero and low-carbon transportation. The Climate Action 100+ Net Zero Company Benchmark has assessed bp’s climate policy engagement as ‘Aligned’.

bp’s leadership team and board conduct an annual review of the primary risks and uncertainties faced by the group, recognising climate change and the transition to a lower carbon economy as principal risks.

bp aligns itself with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations, ensuring transparency and accountability in its climate strategy.

Through scenario analysis and resilience testing, bp has gained confidence in the ability of its strategy to withstand a wide range of transition scenarios, including those that align with limiting the temperature increase to 1.5°C.

Chart: bp’s FY19 to FY30 absolute GHG emissions

bp’s FY19 to FY30 absolute GHG emissions (Source: Accr)

The company aligns itself with the Task Force on Climate-related Financial Disclosures (TCFD) recommendations and designs its strategy to be robust and adaptable to various climate-related scenarios, including those in line with limiting global temperature rise to well below 2°C and 1.5°C.

Renewable energy and clean technology investments

As part of its commitment to a low-carbon economy, bp is increasing its investments in renewable energy and clean technologies.

Their goal is to increase investment made into non-oil and gas businesses to $6-8bn by 2025. In 2022, the figure was $4.9bn.

The company is exploring opportunities in

  1. Solar
  2. Wind
  3. Hydrogen
  4. Bioenergy
  5. Carbon capture, utilisation, and storage (CCUS) technologies
  6. Electric vehicle charging

These investments will help bp diversify its energy portfolio, reduce its carbon footprint, and contribute to global climate action.

BP are focused on transforming to an integrated energy company. Their three-pillar strategy includes five transition growth engines, and integration underpins and connects it all

BP are focused on transforming to an integrated energy company. Their three-pillar strategy includes five transition growth engines, and integration underpins and connects it all

Low-carbon products & energy transition

  • Decarbonising energy products: bp focuses on reducing the carbon intensity of sold energy products and investing in EV charging, bioenergy, renewables, power, and hydrogen.
  • Blue and green hydrogen: The company plans to use blue and green hydrogen instead of natural gas and grey hydrogen to reduce emissions.

bp have achieved a 2% reduction in carbon intensity against their 2019 baseline. the 2030 target is 15-20%/

bp have achieved a 2% reduction in carbon intensity against their 2019 baseline. the 2030 target is 15-20%

There is still work to be done to reduce carbon intensity from energy products sold (Source bp)

Carbon capture and storage (CCS)

  • bp aims to use CCS to produce blue hydrogen or electricity from its equity production. It supports its net zero goals in upstream oil and gas production.

Renewable natural gas (RNG) and bioenergy

  • Archaea Energy acquisition: bp announced a ~£3 billion deal to acquire Archaea Energy, a leading US producer of RNG, to establish their bioenergy business.
  • Biofuels production: The company aims to produce around 100,000 barrels per day of biofuels by 2030.

Monitoring and reporting progress

bp monitors and reports its progress towards its net zero goals annually. The company discloses its emissions data, including scope 1, scope 2, and scope 3 emissions, as well as its emissions reduction targets and strategies.

This transparent reporting lets stakeholders track bp’s progress and hold the company accountable for its climate commitments.

Impact on day-to-day operations and employees

bp’s net zero strategy aims to transform its operations and workforce to achieve its climate goals. The strategy affects various aspects of the business, including emissions reduction, methane management, and employee incentives.

Operational emission reduction

  • Decreasing emissions: bp has already exceeded its 2025 target of 20% emission reductions, with scope 1 and 2 emissions decreasing by 41% from the 2019 baseline.
  • Methane reduction: bp continues to work on reducing operational methane emissions, achieving around 2.2kt of methane SERs in 2022 through multiple projects.

Chart showing bp's estimated emissions from carbon reducing from 361 to 307 MtCO2 from 2019 to 2022

Chart showing the carbon intensity of bp's energy products

Source: bp

Incentivising employees

  • Linking bonuses to sustainability: Since 2019, bp has linked employee annual bonuses to sustainability measures, encouraging staff to contribute to the company’s climate goals.
  • Education and advocacy support: bp made progress in 2022 on incentivisation, education, and advocacy support to help employees understand their role in delivering the company’s strategy and sustainability aims.

Approach to managing climate-related financial risks

bp actively addresses climate-related financial risks through scenario analysis, resilience testing, and supply chain management.

Scenario analysis and resilience testing

  • Transition scenarios: bp has gained confidence in its strategy by testing its resilience against a wide range of transition scenarios, including those aligned with limiting the temperature increase to 1.5°C.
  • Oil price scenarios: The company has focused on its significant exposure to oil price scenarios, testing its resilience until 2030. This rigorous evaluation has reinforced their confidence in the strategy’s resilience.

Supply chain emissions management

  • Partnerships with suppliers: bp has established partnerships with suppliers who share their commitment to sustainability, ensuring adherence to standards and guidelines outlined in their code.
  • Contract termination: In cases where suppliers are not adhering to the required standards, bp is prepared to terminate the contract, mitigating potential financial risks associated with non-compliant suppliers.

Collaboration with government and NGOs

bp participates in working groups seeking to reduce global methane emissions across the oil and gas value chain. These include

  • Green Hydrogen in Mauritania
  • Net consultation in the UK
  • NGOs like the Environmental Defense Fund (EDF)

Methodology for measuring carbon footprint and progress towards net zero

Using various methodologies and tools, bp measures its carbon footprint and monitors progress towards its net zero goals. Five methods are used to measure carbon footprint and progress towards net zero.

  1. Climate risk assessment: bp aligns with the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD) and conducts annual reviews of primary risks and uncertainties, including climate change and the transition to a lower carbon economy.
  2. Methane measurement: bp aims to install methane measurement across its oil and gas processing sites through enhanced metering, software for flare efficiency, and predictive emissions.
  3. Scenario analysis: The company’s strategy is designed to be robust and adaptable to various climate-related scenarios, including those in line with limiting global temperature rise to well below 2°C and 1.5°C.
  4. Resilience testing: bp tests its business strategy and investments against climate scenarios to ensure resilience and adaptability.
  5. Supply chain management: bp collaborates with suppliers and partners to reduce emissions throughout its value chain and may terminate contracts if necessary to manage climate-related risks.

Comparing with competitors

bp’s net zero strategy focuses on reducing emissions, investing in green technologies, and engaging with suppliers and customers. Here’s how it compares with its competitors:

Scope 1 and 2 emissions reduction targets

  • bp: Aims to reduce Scope 1 and 2 emissions by 20% by 2025 and 50% by 2030.
  • Shell: Targets a 20% reduction in net carbon intensity by 2030 and 45% by 2035.
  • ExxonMobil: Plans to reduce greenhouse gas intensity by 15-20% by 2025.

Scope 3 emissions reduction targets

  • bp: Aims to reduce Scope 3 emissions by 10-15% by 2025 and 20-30% by 2030.
  • Shell: Targets a 30% reduction in net carbon intensity by 2035 and 65% by 2050.
  • ExxonMobil: Does not have specific Scope 3 emissions reduction targets.

Investments in green technologies

  • bp: Focuses on blue and green hydrogen, carbon capture and storage (CCS), renewable natural gas (RNG), and bioenergy.
  • Shell: Invests in CCS, hydrogen, biofuels, and renewable energy projects.
  • ExxonMobil: Prioritizes CCS, advanced biofuels, and algae-based fuels.

Engagement with suppliers and customers

  • bp: Partners with suppliers committed to sustainability and supports customers through decarbonising energy products and providing education and advocacy.
  • Shell: Works with suppliers to reduce emissions and helps customers by offering lower-carbon products and services.
  • ExxonMobil: Engages with suppliers on sustainability and supports customers through research and development of lower-emission technologies.
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Author

Rob Boyle
Rob built Emission Index to collect and share data, trends and opportunities to reduce our greenhouse gas emissions and expedite the energy transition.

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