By David Hodari and Adriano Marchese
LONDON -- BP PLC pledged to reduce its net carbon emissions to zero by 2050 and restructure its oil-focused businesses to better navigate a transition to other fuels -- a dramatic, if vague, promise by one of the world's biggest energy companies amid investor and consumer pressure over fossil fuels.
The goal is the latest in a series of commitments, made over decades, by big oil companies to reduce emissions. While bold in ambition, BP didn't provide details about how it expects to accomplish the goal, or how much it will cost. The time horizon, 30 years, provides plenty of wiggle room.
BP's move comes a week into the tenure of new Chief Executive Bernard Looney and marks a striking departure from the course set by his predecessor, Bob Dudley.
While BP doubled down on oil through mergers and acquisitions under Mr. Dudley, Mr. Looney has posted on his LinkedIn and Instagram pages that BP must now work through the "energy transition."
Previous efforts by Big Oil to tilt away from oil and natural gas have had mixed results. More than a decade ago, BP rebranded itself as "Beyond Petroleum" and committed to ramping up production of renewable energy, like solar and wind, before abandoning that effort. BP allocated 3.2% of its budget last year to investing in renewable energy, compared with an industry average of 7.4%, according to analysts at Bernstein.
Still, Wednesday's pledge is notable coming from one of the largest oil majors, whose business is centered on producing and selling carbon-emitting products like the gasoline refined from crude oil.
BP's commitment is also unusual in that it goes beyond reducing emissions from its own operations, for instance, the carbon and methane emitted at BP sites that pump oil and natural gas. BP is also committing to negate the emissions of the oil, gas and refined products it produces, including from cars that use its gasoline.
BP says it emits about 55 million metric tons of carbon equivalent from its operations a year. Another 360 million comes from the burning of products made using oil and gas it has produced.
The company hasn't pledged to stop emitting carbon. Instead, it is promising to offset its emissions by taking the same amount of carbon out of the atmosphere. It didn't say exactly how.
Amid heightened scrutiny over global warming, investors and consumers have ratcheted up pressure on big companies to reduce their environmental toll. Many institutional investors have asked companies to make reducing emissions a priority -- threatening to pull investments in some cases.
The world's largest oil-and-gas producers have generally moved to reduce greenhouse-gas emissions from their drilling sites, pipelines and other operations. But the industry hasn't agreed on whether to commit to reducing emissions from the oil byproducts it sells. That accounts for the lion's share of any oil company's greenhouse gas footprint. Some companies argue that it would be difficult, if not impossible, to realistically set such goals.
The 2050 deadline represents when BP hopes to be carbon "neutral." At that point, it says, carbon emissions from its oil and gas operations and from the fuels it sells should be completely offset by reductions from more-efficient production, carbon removal and carbon "sink" projects. A carbon sink typically refers to a natural reservoir, such as a forest, that can absorb carbon.
BP said it would strive to reduce the carbon intensity of its oil and gas production by 50% by 2050 or sooner. It promised to install new methane-measurement technology at its facilities to half its methane intensity by 2023.
BP promised to boost investment in non-oil-and-gas businesses, and said it plans to reorganize the company into four divisions that would help it reach these goals. A "production and operations" division would strive to unite all operations under one roof. It would also create a "gas and low carbon energy" unit, which would focus on developing natural gas and low-carbon solutions, including hydrogen power.
In 2019, the company began expanding its low-carbon business, increasing ownership in its solar joint venture, Lightsource BP, to 50%, as well as completing the formation of its new Brazilian biofuels and biopower joint venture, BP Bunge Bioenergia.
"It is clear to me, and to our stakeholders, that for BP to play our part and serve our purpose, we have to change," said Mr. Looney.
BP also said it would step up advocacy for government policies that help reduce emissions, such as a carbon tax or some other "price on carbon." The company also said it would re-examine its involvement in industry trade groups, some of which have actively lobbied against policies such as a carbon tax and emissions reductions.
Write to David Hodari at David.Hodari@dowjones.com