BP reported that its scope 1 and 2 emissions dipped on the year in 2022, while its scope 3 emissions rose slightly over the same timeframe.
The company's scope 1 and 2 emissions fell to 31.9mn t of CO2 equivalent (CO2e) in 2022, down by 10pc on the year and by 41pc from its 2019 baseline. The bulk of the decline since 2019 was owed to divestments, BP said. While it has already beaten its 2025 target for scope 1 and 2 emissions, it plans to "bring new projects online and continued investment will be needed" to hit targets further out, it said.
BP's scope 3 emissions edged up by 3mn t/CO2 in 2022 to reach 307mn t/CO2, although this is a 15pc fall from 2019. The rise in 2022 was down to an increase in oil and gas production, the company said. BP's target for scope 1 and 2 emissions is a 50pc reduction by 2030, while it has made its interim scope 3 emissions targets less ambitious. For these, BP has set a goal of a 10-15pc reduction by 2025 — previously 20pc — and a 20-30pc reduction by 2030, down from a previous 35-40pc aim. All targets are set against a 2019 baseline.
Aside from cutting its absolute emissions, BP also plans to reduce the carbon intensity across its sold energy products by 15-20pc by 2030, again from 2019 levels. It achieved a 2pc reduction in 2022 to 77g of CO2e/MJ, and aims to be net zero in this category by 2050.
BP plans to invest more in its "transition" segment — comprising bioenergy, electric vehicle (EV) charging, convenience, hydrogen, renewables and power. It lifted its transition investment aim for 2025 to $6bn-8bn, up from $3bn-4bn, and for 2030 to $7bn-9bn, from around $5bn previously. This equates to more than 40pc of capital expenditure (capex) for 2025 and around 50pc of capex for 2030. The company last month made an about turn on a commitment to cut oil output by 1mn b/d by 2030, from 2019 levels.
The company uses carbon price assumptions of $50/t CO2e in 2023-25, rising to $100/t CO2e in 2030, $200/t CO2e in 2040 and $250/t CO2e in 2050 — all in 2021 $ values. Although there is no so-called global carbon price, EU emissions trading system (ETS) prices have hit record highs this year. The ETS is designed to lift the cost of emitting over time, while the EU's carbon border adjustment mechanism, scheduled to take effect in 2026 once it receives formal approval, seeks to ensure the carbon price of imported goods is equivalent to a domestic carbon price.
BP used the UN Intergovernmental Panel on Climate Change "and other sources" to inform its strategy, it said. It used three scenarios in its latest energy outlook report, of which two were consistent with Paris climate agreement goals. One of its aims is to "more actively advocate for policies that support net zero, including carbon pricing", it said. The company reports in line with guidelines from the Taskforce on Climate-related Financial Disclosures, as required by UK regulator the Financial Conduct Authority.
