BP has declared that it is to abandon a target to increase renewable energy generation by 2030 in favour of a shift back towards fossil fuels.
The company had said that it would increase renewable generation 20-fold between 2019 and 2030, but pressure from shareholders to reduce debt and increase returns has prompted a reduction in low-carbon investments. The stock has lost almost a quarter of its market value in the past two years, with profits for 2024 falling to $8.9bn, down from $14bn the previous year.
BP has now said that it will increase its investments in oil and gas by about 20% to $10bn (£7.9bn) a year, while reducing previously planned funding for renewables by more than $5bn (£3.9bn). BP chief executive Murray Auchincloss said the company had gone "too far, too fast" in the transition away from fossil fuels, and that its faith in green energy was "misplaced".
The latest announcement is in line with BP’s recent policy of cutting back on investments in renewable energy and backing away from previous commitments on climate change. The company had already scaled back its aim to reduce oil and gas output by the end of the decade. In 2020 it declared that its target was a 40% reduction. This was reduced to 25% in 2023, and has now been cut still further.
Other energy companies such as Shell have also decided to concentrate more on oil and gas production. This follows the rise in fossil fuel prices from the low point of the pandemic to levels which have been boosted still further by Russia’s invasion of Ukraine
