BP supports the concept of a carbon price, where producers and consumers pay for the greenhouse gas emissions they emit. This may seem counter-intuitive for an energy company as it adds cost to production and products, but it will help provide a roadmap for future investment and long-term certainty as the world develops energy sources.
It will also incentivise reduction in greenhouse gas emissions as well as making energy efficiency and low-carbon energy sources like natural gas and renewables more attractive.
BP endorsed the World Bank carbon pricing statement in 2014, and joined other oil and gas companies in 2015 in calling on the UN and governments to put a price on carbon.
BP is also active in carbon trading markets and in 2016 our financing of low carbon project activities led to annual emissions reductions of more than 20 million tonnes of carbon dioxide equivalent – that’s equal to 40% of BP’s direct emissions.
Natural gas produces about half as much greenhouse gas emissions as coal when burned to generate power. As seen in the United States, the availability of shale gas, displacing coal, has had a significant impact on carbon dioxide (CO₂) emissions, where they’ve fallen back to 1990s levels. Gas can also help to serve as a back-up for the intermittency of renewable energy sources – for example when the sun doesn’t shine or the wind doesn’t blow.
Half of BP’s upstream portfolio is currently natural gas, and several new big gas projects are set to come on stream in the next few years in countries like Oman, Egypt and Trinidad. This shift to more gas production is part of BP’s strategy and will help to act as a bridge to a lower carbon world.
From the sugar cane fields of Brazil to the green plains of the United States, BP has been producing renewable energy for more than a decade. While renewables account for just 3% of current global energy demand, they are growing rapidly and are expected to reach 10% by 2035.
With a focus on biofuels and wind, BP has the largest operated renewables business among its oil and gas peers. BP is also examining areas like bio-products, for example by investing in Fulcrum Energy – a company which converts everyday waste into biojet fuel for aviation. A deal has also just been announced looking to scale up bio-isobutanol.
The path to a lower carbon future will be shaped by technological advancement, so BP’s venturing activities include investing in companies that are focusing on low carbon solutions. For example, Solidia, is developing a technology which can reduce the carbon footprint of concrete production by between 30-70%.
Carbon capture, utilisation and storage technology (CCUS), where CO₂ can be captured and prevented from entering the atmosphere is another important means of reducing emissions. BP is working with the Oil and Gas Climate Initiative (OGCI) to speed up wide-scale use of CCUS, where it is one of the main focus areas for OGCI’s $1 billion investment vehicle.
The International Energy Agency estimates that energy efficiency alone will contribute approximately half of the emissions reductions required by 2030 to stay below the Paris Agreement’s 2°C threshold.
Practical actions across BP’s businesses are helping to lower carbon emissions. For example, lowering the furnace temperatures by 5°C at the Sangachal terminal in Azerbaijan is reducing fuel consumption and emissions. In the downstream, at the Whiting refinery in the United States, the steam generated by operations is now being used to help power the refinery. New ships in BP’s fleet use 25% less fuel and emit less nitrogen oxides than our older ships.
Around 80-90% of CO₂ emissions from oil and gas products come from use by consumers in transportation, power plants, industries and buildings. As such, providing products or services with lower carbon output is crucial to helping customers reduce their footprint.
Lubricants brand Castrol has improved the efficiency of vehicles by making its product lower viscosity, avoiding five million tonnes of CO₂ over the past 10 years – the equivalent of removing almost a quarter of a million European cars from the road each year.
BP’s new range of fuels with ACTIVE technology use an innovative formula designed to help keep engines running smoothly and efficiently by fighting dirt in the car’s engine and protecting against its build up.
Not-for-profit carbon offsetting programme, BP Target Neutral, has helped customers offset 2.5 million tonnes of carbon dioxide equivalent in the past 10 years. Carbon reduction projects are selected through an independent panel and range from forest conservation in Zambia to biomass power generation in China.
For more information, visit pages 10-20 of BP's Sustainability Report 2016 (link below)