Our new ambition is to become a net zero company by 2050 or sooner and to help the world get to net zero. We have set out 10 aims, which together set out a path that is consistent with the Paris goals.
When we talk about helping the world get to net zero we mean achieving a balance between sources of anthropogenic emissions and removal by sinks of greenhouse gases, as set out in Article 4.1 of the Paris Agreement*. When talking about BP becoming a net zero company by 2050, or sooner, in the context of our new ambition and aims 1 and 2, this means achieving a balance between (a) the relevant Scope 1 and 2 emissions associated with our operations (aim 1), or Scope 3 emissions associated with carbon in BP’s net production of oil and gas excluding Rosneft (aim 2), and (b) the total of applicable deductions from activities such as sinks, for example land carbon projects, which we allow for in our methodology.
We have set out five aims to get BP to net zero:
1. Net zero operations – net zero across our entire operations on an absolute basis by 2050 or sooner.
2. Net zero oil and gas – net zero on an absolute basis across the carbon in our upstream oil and gas production by 2050 or sooner.
3. Halving intensity – cut thecarbon intensity of the products we sell by 50% by 2050 or sooner.
4. Reducing methane – install methane measurement at all existing major oil and gas processing sites by2023, publish the data, and then drive a 50% reduction in the methane intensity of our operations.
5. More investment for new energies – increase the proportion of investment we make into our non-oil and gas businesses.
In February 2020, we announced our aim to be recognized as an industry leader for the transparency of our reporting. This means providing our stakeholders with the information they require, particularly in relation to our low carbon strategy and aims.
At the 2019 BP AGM, the board recommended that shareholders support a special resolution requisitioned by Climate Action 100+ on climate change disclosures. More than 99% of shareholders voted for this resolution, which requires BP to respond to a number of different elements.
We support the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD), which was established by the Financial Stability Board with the aim of improving the reporting of climate-related risks and opportunities. We intend to work constructively with the TCFD and others to develop good practices and standards for transparency. This will be a multi-year journey, but we have already started and our latest reporting provides informationsupporting the recommended disclosures.
In 2018 we announced plans to link our annual cash bonus to our sustainable emissions reduction (SER) target. This means around 37,000 eligible employees, including executives, are now incentivized and rewarded for their contribution to reducing carbon emissions in BP.
We plan to allocate more resources to advocate for well-designed policies, including carbon pricing. We believe this is the most efficient way to reduce GHG emissions and incentivize everyone, including energy producers and consumers, to play their part. In our view, pricing can be effective either as a tax or as a cap-and-trade system.
A fifth of the world’s GHG emissions are now covered by carbon pricing. Stable and well-designed carbon pricing adds a cost to energy production and energy products, but it also provides a basis for future investment and a level playing field for all energy sources.
We believe that a well-designed price on carbon should:
We recognize that carbon pricing may not always be the best solution and that in some cases a range of policy instruments may be required to address gaps in pricing coverage or market failures.
We support well-designed carbon pricing but we’re prepared to oppose poorly designed proposals.
For example, we opposed the ballot initiative to introduce a carbon fee in Washington State, US, in November 2018. We believed that the policy was badly designed and would have harmed Washington’s economy without significantly reducing carbon emissions. The initiative was not passed.
We worked with legislative leaders in the state in 2019 and 2020 and supported a cap-and-invest bill, which we believed would be more effective. We intend to work with the Washington legislature during its 2021 session to see if a new carbon bill can be advanced.
We’re working with other businesses, governments and civil society, to support the expansion of carbon pricing through our participation in the Carbon Pricing Leadership Coalition and the US-based Climate Leadership Council. In 2019 we engaged with policymakers in Europe, Australia, Canada and China.
Natural climate solutions (NCS) are changes in land use and management that can reduce net GHG emissions and increase the absorption of CO2 already in the atmosphere through the creation and expansion of ‘natural sinks’. NCS can be delivered by restoring and changing the management or use of a wide range of habitats, including wetlands, forests, grasslands and agricultural or coastal areas.
We strongly support NCS as a key part of the energy transition and a necessary component of meeting the Paris goals and achieving net zero emissions.