Trade tensions risk throwing the global economy’s transition to greener energy into disarray and could hurt energy companies’ preparations towards it, BP Chairman Helge Lund said as leaders of the world’s largest economies gather for talks in Japan.
Lund, in his first interview since taking office in January, said BP would rather see a rapid, orderly phasing out of fossil fuels than a delayed and disorganised transition.
The former chief executive of Norwegian oil group Equinor said BP as well as rivals such as Royal Dutch Shell and ExxonMobil would have a vital role to play to ensure a successful transition to low carbon economies.
“It is better for us to see a path that goes rapidly,” Lund said. “It will be very difficult for the oil and gas companies but that is a better and a preferred solution than an uncontrolled sudden change maybe 10, 15 years into the future.” London-based BP, like some of its peers, has taken steps towards meeting the 2015 Paris Climate Agreement to limit global warming, including setting targets to reduce carbon emissions from its operations, link them to managers’ pay and ensure that investments are in line with the accords.
But many investors say BP will have to do more, including tackling emissions from the fuels and products it sells to millions of customers daily, known as Scope 3 emissions, to prevent a catastrophic rise in global temperatures.
Lund said however that such Scope 3 targets would tie BP’s hands to make future investments, whether in renewable energy or oil and gas. He nevertheless said the company’s thinking around Scope 3 was likely “to evolve over time.” BP has invested around $500 million in renewable power, electric vehicle charging points and other low-carbon technologies over the past few years, a fraction of its annual spending that reached $15 billion last year.
And the pressure on companies and governments to do more to curb greenhouse gases is rising as carbon emission levels show no sign of decreasing.
Investors managing more than $34 trillion in assets, nearly half the world’s invested capital, this week demanded urgent action from governments on climate change, piling pressure on leaders of the world’s 20 biggest economies meeting this week.
France has said it will not accept a final G20 communique that does not mention the Paris climate change agreement.