BP's climate move could mean new pressure on Exxon and Chevron
Illustration: Rebecca Zisser/Axios
BP's new emissions pledge could create more pressure on U.S.-based giants Exxon and Chevron.
Why it matters: European oil behemoths have been more active on climate than their U.S. counterparts.
Context: BP vowed "net-zero" emissions from its operations and oil and gas it produces by 2050 and a 50% cut in emissions intensity from products it sells.
The big question: Now the question is whether BP's plan — which is the most aggressive among super-majors, albeit lacking detail — will change the landscape.
- "If we do see capital flowing into BP, that may force the U.S. majors to rethink the speed at which they move on carbon reduction targets," Noah Barrett of the asset management firm Janus Henderson told Bloomberg.
- But he does not see the U.S. companies "adopting a BP-like strategy in the near future."
Where it stands: One big dividing line between European and U.S. majors is companies' willingness to set any kind of goals around Scope 3 emissions.
- Those are the emissions from the use of a company's products in the economy from driving and so forth, and they're vastly larger than emissions from companies' direct operations and energy use.
- BP's Scope 3 target is a mix of commitments: an absolute net-zero target for the use of the oil and gas it produces, but the intensity target once you include the oil and gas they buy from other companies to process and sell.
What they're saying: An HSBC note this morning calls the new plan "potentially a game-changer for the company and the industry."
- "For a company of BP’s scale, a net zero scope 3 footprint from its own production introduces a climate-related ambition on an unprecedented scale."
- "It also points to a dramatic transformation of the business, including an inevitable shrinkage of the upstream business over time."