BP vows to "fundamentally" change with net-zero emissions target

BP said Wednesday that it is reorienting its business with new climate targets — including first-time emissions commitments for its products' use in the economy — and a new team to help countries, cities and other companies cut carbon.

Why it matters: It's the latest sign of how multinational oil-and-gas giants — especially European-headquartered players — are expanding climate pledges under intense pressure from activists and investors.

• It also shows how new CEO Bernard Looney hopes to steer BP in a world moving to cleaner sources even as fossil fuels remain dominant in the global energy mix and, even with the new pledges, the heart of BP's business.
• "The world’s carbon budget is finite and running out fast; we need a rapid transition to net zero," he said in a statement.

Driving the news: BP announced it would "fundamentally transform" its business. The company rolled out...

• An overall goal of reaching net-zero emissions from its oil-and-gas production and operations by 2050.
• A target of cutting emissions intensity — that is, emissions per unit of output — from the products it sells by 50% by 2050. These emissions, known as Scope 3, are far larger than emissions from companies' direct operations.
• A pledge to increase what's now the small proportion of its investments outside its core oil-and-gas business, such as in clean energy, although they did not provide a specific target.
• Plans to install methane monitoring at major oil-and-gas processing sites by 2023 and subsequently (I can't immediately tell when) cutting intensity there by 50%.
• Plans for expanded relationships with outside parties via a new internal team to create "integrated clean energy and mobility solutions" that help cities, countries and other companies.

By the numbers: BP said that its net-zero goal will encompass much of its emissions of all types, including Scope 3.

• BP currently emits roughly 55 million tonnes of CO2-equivalent from its direct operations per year and that emissions that ultimately come from oil-and-gas it produces total about 360 million tonnes, according to a spokesperson.
• "Taken together, delivery of these aims would equate to a reduction in emissions to net zero from what is currently around 415 MteCO2e a year," BP's statement said.

The intrigue: Beyond the specific targets, BP says it's changing its corporate posture.

• The company said it would be more active in lobbying for policies including carbon pricing and would set "new expectations" for its relationships with trade associations.
• On the latter point, BP said it would make its case internally, be "transparent" about disagreements, and prepare to leave groups if "alignment cannot be reached."

The big question: Whether oil majors are truly readying to bail on the most powerful lobbying groups.

• So far the steps have been limited. Both Shell and Total left American Fuel and Petrochemical Manufacturers, but as of now, the majors have stuck with larger groups like the American Petroleum Institute and U.S. Chamber of Commerce.

What they're saying: BP's new pledge could increase pressure on U.S. oil-and-gas giants that have been less active on climate than their European peers, one advocate tells me this morning.

• "This is a major step forward, and means that there is absolutely no excuse for every oil and gas company not to make a similar commitment," said Andrew Logan of the sustainability group Ceres.
• "There will be intense pressure on U.S. companies like Exxon to follow suit," he added.

But, but, but, via Reuters: Charlie Kronick of Greenpeace U.K. asked, "'How will they reach net zero? Will it be through offsetting? When will they stop wasting billions on drilling for new oil and gas we can’t burn?'"

What's next: Jason Bordoff, head of a Columbia University energy think tank, pointed out that the company "will need to explain how new [oil-and-gas exploration and production] investments are consistent with net zero from all the energy it produces by 2050."

Go deeper: Carbon capture leaders team up on net-zero emissions