Oil giant BP has announced a reduction in planned investment in renewable energy and an increase in annual oil and gas spending, signaling a move back towards traditional fossil fuels, Al Jazeera reports.
The company plans to increase oil and gas spending to $10 billion annually.
This move comes after BP, under former CEO Bernard Looney, had set ambitious carbon-cutting targets in 2020, including a pledge to cut oil and gas output by 40 percent by 2030 while rapidly growing renewables.
However, BP is now cutting planned annual investment in energy transition businesses by over $5 billion from its previous forecast, limiting it to between $1.5 billion and $2 billion per year. The company also aims to grow oil and gas production to between 2.3 million and 2.5 million barrels of oil equivalent per day (boepd) in 2030, a potential increase from the 2.36 million boepd pumped in 2024.
According to current CEO Murray Auchincloss, the transition to renewable energy has been slower than initially expected, citing the war in Ukraine, the pandemic, volatile energy markets, and changing attitudes towards renewable energy in some countries.
Auchincloss told investors that the company’s faith in the green energy transition was “misplaced” and that it had gone “too far, too fast” in recent years. He emphasized the continued importance of oil and gas, stating that demand for these fuels will be “needed for decades to come.”
While acknowledging that renewables still pose a “significant opportunity,” Auchincloss confirmed that BP still aims to meet net-zero carbon emissions by 2050.
The change in strategy has drawn criticism from environmental campaigners, who are concerned about the implications for climate change. BP’s shift follows similar moves by other oil majors, including British rival Shell, who have also scaled back their clean energy objectives.
