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Carbon pricing

bp supports a price on carbon because it’s fair, efficient and effective

A well-designed carbon price provides the right incentives to decarbonize the entire economy. It encourages companies like bp to innovate more and emit less. The greater the scope of the program, the more effective it will be. 

 

We’re engaging policymakers and are members of the CEO Climate Dialogue and Climate Leadership Council to encourage a national carbon pricing program. But much of the action is taking place at the state and regional level, and we’re engaging with state stakeholders to progress well-designed carbon pricing programs there.

Cap-and-invest in Washington state

Home to our Cherry Point Refinery, Washington is now the second state in the country with a comprehensive, economy-wide, market-based carbon pricing program – the Climate Commitment Act. The legislature and governor brought this progressive climate policy to the Evergreen State to lower carbon emissions.

 

The package of solutions will help to produce fewer emissions, making the entire economy cleaner by:

  • Incentivizing and rewarding innovation to reduce carbon emissions.
  • Creating policy certainty that sends clear signals to emitters.
  • Setting a new standard for the country and creating the opportunity to link Washington’s market to cap-and-trade markets in California and Quebec.
  • Strengthening the state’s economy by generating revenue that can reach the entire state.
  • Making climate goals achievable. Like bp, Washington has set an ambition to be net zero by 2050 and a cap on emissions is the most effective and efficient way to get there.
     

We worked with Clean & Prosperous Washington to advance the Climate Commitment Act, a broad coalition of businesses and environmental, labor, social justice and equity advocates. Learn more about the coalition’s work.

 

bp will keep doing our part to bring Washington state closer to net zero, starting with our own operations. And we look forward to working with Washington state agencies as they look to implement the Climate Commitment Act.

 

Cherry Point is already making progress under the new policy. We’re investing $269 million to improve the refinery’s efficiency, reduce its carbon dioxide (CO₂) emissions and increase its renewable diesel production capability. Expected to create more than 300 local jobs over the next three years, this investment is aligned with our aims to be net zero across our operations, and to reduce the lifecycle carbon intensity of the products we sell by 15-20%, by 2030. Good policy like the Climate Commitment Act incentivizes companies like bp to accelerate modernization and lower-carbon solutions. Read more about our Cherry Point investment in the Seattle Times.

Carbon pricing in Illinois

Illinois is home to 1,300 bp employees and is part of the US Climate Alliance, committing to reduce GHG emissions consistent with the United Nations Paris Agreement.

The exterior of the Illinois capitol building in Springfield, Illinois

Putting a price on carbon drives emissions reductions while helping grow the economy, creating and protecting jobs. The funds collected from emitters while they remove emissions from their operations can generate critical revenue for the state.

 

bp has publicly advocated for carbon pricing in Illinois and will continue to encourage this policy – among lawmakers and other stakeholders.

Regional Greenhouse Gas Initiative

The Regional Greenhouse Gas Initiative (RGGI) is a successful cap-and-trade carbon pricing program for the power sector. Throughout the last decade, participating states have seen a range of benefits – including emission reductions – while electricity costs have decreased, according to the Center for Climate and Energy Solutions.

High-voltage power lines. Distribution electric substation with power lines and transformers.

Independent studies of the program show RGGI works for people, businesses and the planet. RGGI states also outpaced power sector emissions reductions over the rest of the country by 90 percent.

 

bp publicly advocated for Virginia to join RGGI, which it did in 2020. We’re also part of a coalition of businesses and environmental organizations in Pennsylvania working to bring this policy to the Keystone State. 

Transportation Climate Initiative

bp joined with business leaders, transportation companies, environmental groups and more to support the Transportation Climate Initiative for the East Coast.

Cars travel on a road near downtown Boston

Modeled after RGGI and designed by state leaders, with help from the Georgetown Climate Center, the program would have created a regional cap and trade program for transportation emissions – the biggest source of CO2 across the region.

 

Although TCI is not moving forward, we’ll continue to support efforts to decarbonize the transportation sector, including several states, such as New York, which are considering instituting other carbon pricing measures like low carbon fuel standards.

Carbon pricing advocacy activities