Good afternoon, ladies and gentlemen. It’s wonderful to be invited to speak to you again - thank you for having me again, David!
I would like to start by acknowledging the Aboriginal and Torres Strait Islander people as the traditional custodians of the land we are on today – Australia. I pay my respects to the Gadigal people of the Eora Nation, the traditional custodians of this place we now call Sydney, and their elders past, present and future.
As I came here today, I thought about the fact that – just as First Nations people have cared for this land for tens of thousands of years – we too have a responsibility to the custodians of this land to make it a better place for the future.
Which is what I am here to talk to you about, specifically- the global energy transition and the role Australia- and bp – can play in it.
Two years ago, I spoke about the climate change imperative and how important it was for Australia. And, standing here today, I am optimistic to see how Australia is mobilising around this.
But there is much more to do. Therefore, the three themes I would like to address today reflect the progress made in Australia but also the urgency to move to action together:
Change for the better is not new to bp. During more than a century of commitment to Australia, bp has continued to pioneer in order to meet the needs of our customers, the country, and the region.
Now we are reinventing ourselves again as part of the transition. A treble net zero company across our operations, our products, and the carbon associated with their emissions.
Fundamentally, we believe there is energy security in energy diversity. And I am proud of the place that Australia now holds globally in bp as an IEC = a top-3 geography for investment in low-carbon globally
In a few minutes, I’ll explain what those actions involve; major investments in game-changing technologies, to help decarbonise power, industry, and mobility.
Let’s start with Australia, and the opportunities here.
We have been part of the industrial fabric in this beautiful country for more than a century.
Within ten years of bp’s establishment in the UK – we built the first fuel terminal in 1919 at Fremantle, and the first fuel refinery at Laverton in Victoria five years later.
As with historical resource booms, Australia once again finds itself blessed with its natural assets: a windswept land drenched in sun, the basis of abundant and cheap renewable resources.
And Australia is in the right postcode: at the heart of an Asia Pacific region that is baying for energy self-sufficiency because of its dependency on fossil fuels and its exposure to the effects of climate change that we are reminded of week in week out.
At bp we have learnt in the last two years that the energy transition makes more sense here than anywhere else on the planet. Many now share this view!
The recently legislated, emissions reductions target of 43% by 2030, sets the conditions for collaboration, with policy settings and investment frameworks to hit targets. This was a tremendous effort by Minister Bowen and the Federal Government to get this through the Parliament.
At bp we are ready.
Our Australian portfolio of low-carbon investment projects has risen to the top-three within bp globally. As I will explain today, we are talking tens of billions of dollars if these projects can be made economic.
Indeed, bp is uniquely placed to play our part here.
How so, you may ask? Simply put, our position is unique, in that we can bring decades of experience in energy and years of hard work on the energy transition across multi-energy vectors – no other energy company in Australia is involved in such a broad range of activities across the globe.
This breadth gives us a considered perspective on many policy issues.
And it helps us bring credibility and a depth of experience in developing and operating major projects with a history of building partnerships in the 80 countries we operate in globally. All of this can help make Australia a roaring success domestically and abroad.
There is a real opportunity for Australia in the sweet spot of the energy transition, improving climate and living standards, prosperity and jobs, and energy security from energy that is clean, reliable and affordable. That’s the energy trilemma.
However, As Minister Bowen said, 2030 is only eight years away so let’s get to it, fast!
We will be in action on two fronts:
Let’s start with major renewables projects.
Two years ago, I talked about the IEA’s statement that $110 trillion will be needed to replumb the energy system. We now know this figure is at the low-end, borne out by decisions of governments and companies in the last 24 months.
Locally state governments in Western Australia and Queensland have set firm dates to cut coal powered energy generation, much earlier than anticipated, as are major energy companies which are bringing forward the closure of their coal assets.
Over half of Australia’s emissions1 are found in energy production for electricity generation, manufacturing, mining, and commercial usage.
Australia is one of the best places on the planet to harness the power of solar and wind energy, giving it amongst the cheapest renewable energy in the world.
At bp, we firmly believe that renewable hydrogen will be an essential tool to decarbonise Australia, and we must make it work as part of the transition.
Our analysis also shows hydrogen could have an eight to 15 percent share in global primary energy consumption by 2050 the same role natural gas plays today, the same in Australia provided we build the infrastructure to bring it to customers.
On that, it’s hard to think now, that there was scepticism about the viability of a local LNG industry 30 years ago. But industry and government collaboration made it happen to the benefit of the Australian economy and trade balance.
It’s a similar opportunity now with hydrogen, and one that Australia has mastered before!
The US Inflation Reduction Act- the IRA – a USD500 billion government stimulus for the energy transition – shows just how seriously the United States is taking green hydrogen production. We must respond to the IRA as a country, more on that later.
Through our global investment in clean energy hubs, bp is putting our money where our mouth is regarding hydrogen.
bp has acquired a 40.5 per cent stake in, will be the operator of AREH, the Asian Renewable Energy Hub in WA’s Pilbara region.
AREH has the potential to become one of the largest renewables and green hydrogen hubs in the world – the most complementary sun and wind globally, AREH will develop green power generating capacity planned to be the equivalent of around one-third of all electricity generated in Australia in 2020.
AREH also aims to produce enough hydrogen or ammonia to abate around some 17 million tonnes of carbon in domestic and export markets annually.
As well as AREH, bp is also exploring a green hydrogen and ammonia project, “GERI,” near Geraldton in WA’s mid-west; as well as a green hydrogen hub at Kwinana to support domestic and export demand.
If progressed, these projects would total more than 30 gigawatts of generation- almost half of the annual capacity of the national electricity market.
And, while you have heard of bp, not so many may have heard of Lightsource bp – our solar joint venture.
In the last four years we have tripled the operational footprint and doubled its workforce.
And Lightsource bp is now Europe’s biggest solar developer and operator.
In Australia, Lightsource bp is commissioning a 200MW solar farm southeast of Dubbo right now, and has five more projects totalling one gigawatt under construction across New South Wales, Queensland, and Victoria – enough power to keep the lights on in 700 thousand homes.
And Lightsource bp is aiming to double generation in Australia to 2GW by 2025, on its way to becoming Australia’s largest solar developer and owner.
Low carbon energy - jobs - economic prosperity- energy security; as I said, this is the moment for Australia. And as you can see, bp is investing in it.
Now onto the second part of our de-carbonisation story for Australia: low-carbon mobility
As many will know transport is responsible for some 18% of Australia’s emissions
And bp is a mobility company, so our second big priority is decarbonising transport.
That’s why bp is investing in the fuels of the future, while continuing to give our customers the fuels they need today.
Australia of course has experienced energy transitions before– as I was reminded when reading an amusing article lately.
It was about a Sydney motorist who, in 1926 was convicted and fined 1 pound for putting water into his car. It wasn’t that he stole the water – it was that he dipped an oil tin in water reserved for horses! Quite rightly, the judge ruled that this ‘constituted cruelty to the many “working horses”.
In 1926 there were already more than 100,000 cars on NSW roads, yet there were also still 695 active horse coach-houses in the state. Horses and cars co-existed on the road for nearly two generations.
I mention this because it tells us that transitions take time.
With an average vehicle age of over 10 years internal combustion engines will remain on our roads for decades to come.
Just as horse and cart owners noticed more cars on the road in the early 20th century, we’re seeing more EVs on our roads and I’m pleased to say that bp is one of the leaders in the electric mobility space globally.
Through the bp pulse brand, we have built extensive global experience in EV charging. We have a network of more than 16,100 charge points globally, with a strategy to deliver 100,000 charge points by 2030.
This month we launch bp pulse right here in Australia.
We will use our extensive global expertise and experience to deliver Australia’s most convenient fast-charging EV network.
This is about fast charging. You can pop in for 10 minutes, grab a coffee and be good for the day. I might add that the barista-coffee at our stores is so good we hope you may be tempted to linger for longer before you set off!!
Fast-charging will be critical for anyone travelling, or for people without off-street parking, and for commercial fleets that make up over two million2 of Australia’s 20 million vehicles.
And as the number one fuel supplier to fleets, we are also helping our customers to lower and zero emissions vehicles and fuels.
I’m proud to add that bp’s chargers have been sourced in Australia, with Brisbane-based manufacturer Tritium delivering one thousand chargers to bp for the UK, Australian and New Zealand markets. Here again, bp building an Australian supply-chain and committing to the Australian economy – an illustration of that sweet spot I was referring to.
And we recently launched an Australian-first airfield electric refueller vehicle. That first truck – built in Melbourne – was put into operation in August at Brisbane Airport, and it will support the broader decarbonisation efforts of our partners and customers in the aviation sector.
Now to the role of hydrogen in mobility – especially for heavy goods vehicles and long-haul commercial transport.
As Australia should have amongst-the-cheapest H2 on the planet, this country should be one of the early pacesetters in H2 mobility.
With the Australia’s best truck stops network, we are building a consortium of anchor demand for hydrogen, relationships with H2 engine manufacturers; plus as a global energy company we know a thing or two about industrial gases.
We’ve started by partnering with leading gas and engineering company BOC to build a hydrogen refuelling station on the outskirts of Brisbane- in partnership with the Queensland state government and aim to be a leader in H2 mobility on key routes.
As Minister Bowen reminded us, 2030 is only eight years away and EV and H2M will take time to scale. Time, we do not have, really.
There will be many cars consuming petrol and diesel for years to come, well into the 2040s. Between now and then we must bring to bear all technologies available to us, and that is why biofuels need to be part of the transition.
These are lower-carbon fuels with chemical properties that, mixed with fossil fuels, can ‘drop in’ to the fuel tanks of today. Fuels that deliver massive carbon emissions reductions and can be made available at scale over the coming years.
For example, with around an 80% reduction in emissions over its lifecycle compared to the fuel it replaces, sustainable aviation fuel is the aviation industry’s key to reducing emissions. Just like renewable diesel is a solution to help miners transition faster.
bp currently produces biofuels at four refineries around the world, and our SAF supply in the EU has increased fivefold since 2019. Including supplying Qantas at Heathrow airport, DHL, and many others globally.
It is clear that biofuels – as SAF or renewable diesel – will play a critical role globally for decades, particularly in Australia. And especially in aviation.
I mention this because again it shows, the time to act is now.
And bp is advancing plans to develop a biofuel production facility at our Kwinana plant in Western Australia, the first of its kind globally in bp, and the first in Australia.
I was with the team in Kwinana just two weeks ago and I’m amazed by the site’s potential in attracting investment and future-proofing Australia.
Economics permitting, the Kwinana Renewable Fuels Plant will produce sustainable aviation fuel and renewable diesel, and it will be integrated with our current terminal operations and future potential green hydrogen project - H2Kwinana.
To me Kwinana is such a great visualisation of the power of the Australian economy and its ability to reinvent itself. From a $16bn asset to the Australian economy, supporting the employment of 30,000 Australians, and now reinventing itself and attracting hundreds of millions of dollars in the net zero economy. Back to the sweet spot of the ET!
You can see that at bp we’re working very hard to contribute to Australia’s 43% emissions reduction by 2030 through the decarbonisation of power and industry with renewable energy, EV, hydrogen mobility, and biofuels.
And that brings me to my final topic today: Working together to deliver the energy transition.
Many of our partners and customers are significant economic contributors in energy intensive sectors that are hard to abate, such as mining, agriculture, heavy transport, and even the oil and gas sector itself.
They share our net zero ambitions and they also depend on us for their diverse fuel and energy needs. We will continue to serve those needs, giving them the energy in the form they want it and in the place they need it
But if the ET has taught us anything, it is humility. That no one company or single government can make the ET happen alone. It is complex, and it is the product of deep partnerships to de-risk significant capital investment.
The Kwinana projects, for example are dependent on competitive power infrastructure and a recognition of the importance of biofuels in the ET fuel slate.
This is just one of many examples why collaboration will be critical to bringing material investments to decarbonise the country.
The role of governments will be crucial to Australia’s success – setting clear and stable policies to create an environment to stimulate demand and give businesses the confidence to invest. With this in place, business will commit capital and create jobs.
We know governments are acting. Look at the Federal Government’s Climate Change Act, the NSW Energy Roadmap, Western Australia’s Energy Transformation Policy, Victoria, and Queensland’s renewable energy targets to name a few.
With the strong foundation of The Climate Change Act in place – it's now down to the underpinning policy frameworks. I can think of two in particular:
The safeguard mechanism review must result in a stable, yet assertive, emissions reduction profile that rewards climate action. That’s a good start.
Yet, it will not be enough to enable green hydrogen and lower carbon fuels in the near term. The $500bn U.S Inflation Reduction Act raises the stakes for Australia. The credit stacking outlined in the IRA will entice investors to the lowest cost of production on the planet. We need to have competing policies on how we will address it and de-risk green hydrogen in Australia.
Therefore, and this is an essential first suggestion; to ensure Australia captures hydrogen’s economic, environmental and energy security benefits - we need an investment framework that will prevent capital leakage overseas, particularly to the US.
For example, settings that create stable demand, that de-risk investment and encourage local value and supply chains. Just as the US Government has legislated.
And second, because the transition of mobility will take time and we will have combustion engines on the road and in the air for some time to come, all technologies are needed during the transition. Assertive policy settings for the decarbonisation of mobility – beyond EV – is essential to investments.
Again, 2030 is only eight years away and we will need all technologies in play to make the 43% happen.
We have a proven track record over 110 years in developing massive energy projects across the world, with the engineering and regulatory expertise to make them happen.
We have the experience of building partnerships and supply chains.
We believe energy security is in energy diversity.
And we will be present across all decarbonisation pathways.
For Australia that’s tens of billions of dollars in investment and tens of thousands of jobs.
But collaboration between all parties will be essential. We are now finding the conversations extremely constructive, and all are recognising that there is tremendous opportunity for Australia.
I’ll start to wrap up by reiterating that Australia has a unique opportunity to deliver the energy transition both here and in the Asia Pacific. As PM Albanese said at the Business Council last month:
Australian business knows that action on climate change is good for jobs and good for our economy. And that genuine engagement and substantial partnership between business and government is how we will get things done in this country and drive the change and progress Australia needs.
All of us understand the urgency at which the global energy transition must occur, and that Transition can only happen of energy companies transition too.
We need to acknowledge that the transition won’t be easy, particularly given cost-of-living pressures, but we need to start investing now for tomorrow. Australia can’t wait.
This is Australia’s moment: the right place, the right conditions, and the right time for the renewables revolution and the energy transition.
As I’ve noted the U.S Inflation Reduction Act shows the world is not standing still. Many other countries can also see the opportunities that the energy transition will bring to their economies and communities, and there will be fierce competition for talent and capital.
In a speech just last Monday, Minister Bowen acknowledged the investment incentives embedded in IRA mean – I quote: “the global race for renewable capital just got a lot sharper”.
He said that ‘by working with the US and by turbocharging our domestic efforts, we can make the most of that opportunity’.
Here again, we agree. Which is why we must compete on policy settings with the US and EU standards and we are happy to be part of the debate on how we best do that to find the sweet spot.
bp has a proud history of securing Australia’s transportation and energy needs, and we are committed to transforming our business for Australia’s future.
A successful energy transition will be founded on strong partnerships and collaboration and we are up for working this with customers and Government.
Our progress in the last two years as we move from ambition to action is extraordinary.
We are ready to allocate capital to match our beliefs, across solar, wind, renewable hydrogen, and all forms of low-carbon mobility.
With some launches already underway and plans for billions of dollars of investments, Australia is at the heart of bp’s energy transition strategy globally provided the economics can be made to work.
After more than a hundred years of serving customers – many of you here today - and building partnerships and value-chains in this wonderful country, we are so excited to be part of Australia’s fabric and now, part of Australia’s energy transition in action. Together we are ready to make it a reality.
Thank you very much for your time