The Blubber

BP Abandons Renewable Energy Target, Refocuses on Fossil Fuels

March 6, 2025 | London

BP’s CEO Murray Auchincloss is set to scrap a key renewable energy target, shifting the company’s focus back to fossil fuels in response to investor concerns over earnings, two sources told Reuters.

The move, expected to be formally announced at BP’s capital markets day on Wednesday, will eliminate the company’s goal of increasing renewable power generation capacity 20-fold by 2030—a pledge originally set to expand from 926 megawatts in 2019 to 50 gigawatts. BP’s latest figures show 8.2 GW of renewable generation capacity, highlighting slow progress toward the goal.

BP declined to comment on the shift.

Investor Pressure and Earnings Struggles

The strategy overhaul follows years of underperformance in BP shares, which fell almost 16% in 2024, lagging behind its Big Oil rivals. The company had already dropped its target to cut oil and gas production by 2030, signaling a retreat from its green energy ambitions.

Alongside abandoning renewable targets, BP is expected to scrap its 2025 EBITDA target of $49 billion and instead introduce an annual percentage growth goal, the sources said. The company failed to meet its 2024 EBITDA target of $40.9 billion, increasing investor scrutiny.

BP will also unveil plans to sell off assets and scale back low-carbon investments to reduce debt and boost shareholder returns.

Sector-Wide Shift Toward Fossil Fuels

BP’s pivot reflects a broader trend in the energy industry, where companies that had previously shifted toward renewables are now doubling down on oil and gas as fossil fuel prices recover from pandemic-era lows.

The re-election of U.S. President Donald Trump, a climate policy skeptic and fossil fuel advocate, has further reshaped the investment landscape, increasing the appeal of traditional energy sources.

BP also faces pressure from activist investor Elliott Investment Management, which recently acquired a 5% stake in the company and is pushing for a cost-cutting overhaul. A separate source told Reuters that Elliott wants BP to scale back green energy spending and sell off wind and solar assets.

The investor group is also urging BP to divest its Castrol lubricants division and service station network to unlock value and boost share buybacks.

Reversing Course on Green Energy Commitments

Under former CEO Bernard Looney, BP pledged in 2020 to cut oil and gas production by 40% while aggressively expanding its renewables business. However, that commitment has steadily weakened—first reducing the cut to 25% in 2023, and now abandoning key clean energy targets entirely.

BP’s new strategy signals a major shift in its long-term vision, prioritizing short-term returns over climate commitments.