BP to drop renewable energy targets, refocus on fossil fuels
In a significant strategic shift, bp is set to abandon its ambitious renewable energy targets, marking a return to focusing on fossil fuels, according to multiple reports. CEO Murray Auchincloss is expected to announce on capital markets day that the company will drop its goal of increasing renewable generation capacity to 50 GW by 2030, a target that represents a 20-fold increase from 2019 levels.
The decision comes as BP faces mounting pressure from investors, particularly activist investor Elliott Investment Management, which has acquired nearly 5% stake in the company. Elliott is pushing for reduced green energy spending, asset sales, and tighter cost controls to improve financial performance, as bp's shares have lagged behind competitors.
The company currently maintains 8.2 GW of renewable generation capacity, a significant increase from its 2019 net wind generation capacity of 926 MW. However, bp will also abandon its core earnings (EBITDA) target of $49 billion, replacing it with an annual percentage growth target, after failing to reach its 2024 EBITDA goal of $40.9 billion.
This strategic reversal represents a dramatic departure from the vision set by former CEO Bernard Looney in 2020, who had pledged to cut oil and gas output by 40% while expanding renewables by 2030. Since taking office, Auchincloss has already begun scaling back renewable investments and announced staff reductions of 5%.
The shift aligns with broader industry trends, as major energy companies return their focus to oil and gas operations, where returns have improved with rebounding fossil fuel prices. The political landscape has also shifted, particularly with the re-election of US President Donald Trump, a known climate skeptic and fossil fuel advocate.
Bank of America analysts suggest bp could announce cuts to its annual low-carbon capital expenditure by $2-3 billion, from its current total capital spending of $16.24 billion for 2024.
