Fresh off the back of its best quarter in years, and supposedly in the face of a windfall tax, oil and gas giant bp has announced a string of new projects that it claims will enable it to "back Britain" in its energy transition.
bp logo on fuel. Credit: Bjoern Wylezich / Shutterstock
bp is looking to invest in a number of green initiatives, including EV charging. Credit: Bjoern Wylezich / Shutterstock
Reducing operating emissions in North Sea oil drilling, pledges to increase EV charging stations and investment in the hydrogen economy are all part of the £18 billion (€21.3 billion) agenda, set to be in motion by the end of the decade.
Read more: New report finds BP emission disclosure gaps
The energy giant is looking at investing heavily into offshore wind projects in the Irish Sea, alongside EnBW, with a potential capacity of 3GWh, including £1 million into a reskilling academy in Scotland to help energy sector workers as part of the ScotWind project.
All of this will be done in accord with the North Sea Transition Deal, which aims to bring the entire oil and gas sector to net-zero emissions - with a full transition of the sector and workers - by 2050. The first interim goal, marked for 2025, should hopefully see emissions reduced by 10%, and 25% by 2027.
These projects alone aim to cover 15% of the UK government's plans for the hydrogen economy. Current plans are for two plants, one green hydrogen and one blue hydrogen, both in Teesside, to cover 1.5GW of hydrogen per year by 2030. This will involve switching to hydrogen, retraining and transforming energy supply chains.
It is also targeting a blanket 50% reduction in British industrial emissions through the East Coast Cluster, a huge new carbon capture and sequestering (CCS) project that could create up to 3,000 new jobs.
Greater electrification could find its way to North Sea oil fields, as the firm looks to reduce operating emissions at its rigs. While this may be a viable short-term solution, the rapid phasing out of fossil fuels will need to happen to make global climate goals feasible.
The oil giant's profits have almost doubled in the first three months of 2022, coming in at £4.9 billion (€5.81 billion), with the previous few years being rough for the fossil fuel industry in general, due to the demand slumps seen during the pandemic and losses that were not seen by renewables.
Read more: BP & Orsted partner for green hydrogen project in Germany
For example, the firm's profits plummeted by around 96% in Q4 2020 owing to the pandemic.
UK Chancellor Rishi Sunak also revealed a plan for a windfall tax for any fossil fuel companies that do not invest enough into renewables, as the UK looks to style itself as a global leader in the energy transition. It has been speculated this wave of development is a response to this.
The £18 billion comes alongside other green plans by bp, including its acquisition of Green Biofuels, helping Johnson Matthey develop sustainable aviation fuel (SAF), and a partnership with Sabic in the development of circular plastics in Germany.
However, critics have said that fossil fuel giants have seen very little development in renewables and have also not attempted to reduce reliance on oil and gas in any meaningful way. As such, it remains to be seen if these goals laid out are met.
Alongside its offshore wind projects, bp will also "invest in infrastructure, ports, harbours and shipyards, including the construction of four ships to support the offshore wind projects across the UK" at an estimated value of £100 million, with its "centre of excellence" for these project set to be based in Aberdeen.
In addition, it will work with Aberdeen City Council to make it a "climate positive city," based on green hydrogen, which is generated through electrolysis.
Its investment into EV charging, which has become something of a hot topic in the UK, will compliment its work on the continent in increasing EV charging alongside VW.
it is estimated that one-third of homes in the UK could lack access to EV charging, and schemes have cropped up to increase their availability in both public and private spaces.
However, bp itself has said these are "forward-looking statements," and is intentionally using a cautionary tone regarding these plans.
Read more: Wind and solar reach 10% of global electricity in 2021
“We’re backing Britain. It’s been our home for over 110 years, and we’ve been investing in North Sea oil and gas for more than 50 years," bp's CEO Bernard Looney said.
"We’re fully committed to the UK’s energy transition – providing reliable home-grown energy and, at the same time, focusing on the drive to net zero. And we have ambitious plans to do more and to go faster. Our plans go beyond just infrastructure – they see us supporting the economy, skills development and job opportunities in the communities where we operate. We are all in.”
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