BP is poised to significantly reduce its previous commitment to invest $10 billion in renewable energy by 2030. The oil giant plans to announce this strategic shift on February 26, marking a departure from its earlier emphasis on renewable initiatives. This move comes as BP faces declining profits, reporting a net income of $8.9 billion in 2024, a sharp fall from the $13.8 billion recorded in the previous year.
The company has been under pressure from activist shareholder Elliott Management, which recently acquired a stake in BP with the intent to push for increased investment in oil and gas sectors. Last year, BP allocated nearly £9 billion to oil and gas ventures, starkly overshadowing the £1.3 billion invested in renewables and low-carbon energy. Despite setting an ambitious target five years ago of achieving 50GW of renewable generation capacity by 2030, BP has been scaling back these efforts, including freezing new wind projects since June last year.
BP's CEO Anders Opedal expressed skepticism about the future profitability of renewables, stating that "we don't see the necessary profitability in the future" in this sector. This sentiment was echoed by the company's recent decision to place most of its offshore wind assets into a joint venture with Japanese company Jera, further underscoring its pivot back to traditional energy sources.
The U.S. government has also played a role in shaping this landscape, having provided guidance to companies like Shell to limit new investments in offshore wind. Furthermore, U.S. President Donald Trump has consistently advocated for fossil fuels, going as far as to mandate the renaming of the Gulf of Mexico to the Gulf of America, a directive BP has adhered to in its operations.
Norwegian energy firm Equinor announced similar plans to halve its investment in renewables over the coming two years while bolstering oil and gas production. This trend reflects a broader industry shift as companies reassess their strategies amidst financial pressures and evolving political landscapes.
"As the world battles extreme weather disasters supercharged by fossil fuels, it is wrong that polluters such as BP can double down on the oil and gas that is driving climate breakdown." – Lela Stanley, head of fossil fuels investigations at Global Witness.