BP expected to scrap renewables target in shift back to fossil fuels

Goal of increasing renewable energy generation 20-fold to be ditched, shareholders to be told this week

BP is expected to ditch a target to ramp up renewable energy generation by 2030 as part of a shift back towards fossil fuels when it presents its strategy to investors this week.

The chief executive, Murray Auchincloss, is poised to tell shareholders that the oil and gas company is scrapping its target to increase renewable generation 20-fold between 2019 and 2030 to 50 gigawatts, Reuters reported.

BP is also expected to ditch a target to reach underlying profits of $49bn (£38.8bn) this year and instead set an annual percentage growth target. The company previously hinted on a call with analysts that it could drop the targets. It missed its 2024 target of $40.9bn in underlying profits.

At an investor day in London on Wednesday, the company is likely to announce plans to divest assets and cut other low-carbon investments to reduce debt and increase returns, under mounting pressure from shareholders.

BP’s shares have fared worse than rivals in recent years and investors have become concerned about the 120-year-old company’s direction. The stock has lost almost a quarter of its market value in the past two years.

Two weeks ago, Auchincloss promised to “fundamentally reset” BP’s strategy as it reported a sharp slump in 2024 profits to $8.9bn, from $14bn the year before.

This came only days after Elliott Management, a prominent activist investor, reportedly built up a sizeable stake of about 5% of BP’s shares.

The New York-based hedge fund is expected to use its influence as a leading shareholder to demand sweeping changes, including a boardroom cull and a potential breakup of the company.

The company has already scaled back its target to reduce oil and gas output – set by Auchincloss’s predecessor Bernard Looney – by the end of the decade. In 2020, the last time it presented a comprehensive strategy update, it aimed for a 40% reduction, but changed this to a 25% reduction in 2023, and is expected to reduce it further on Wednesday.

BP declined to comment on what it described as speculation in the run-up to the investor day. The event, originally planned to take place in New York on 11 February, was delayed and will be held in London because Auchincloss is recovering from a medical procedure.

Cover photo:  BP’s shares have fared worse than rivals in recent years and investors have become concerned about the company’s direction. Photograph: Neil Hall/EPA