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The fossil fuel firm said it would take a “capital-light” approach to its "low carbon energy" business, which includes wind power, solar, hydrogen, natural gas and carbon capture and storage. It also announced spending cuts to its efforts in the division, planning for an annual structural cost reduction of more than $500 million (around €476 million) in "low carbon energy" by 2027.

The company’s investment in its “transition businesses” – which seems to include its "low carbon energy" activities, as well as biogas, biofuels and electric vehicle charging – will also be slashed to $1.5-2 billion per year. This is more than $5 billion per year lower than previous guidance.

The move to minimise the company’s renewable energy activities had been widely signalled ahead of today’s announcement, with CEO Murray Auchincloss pledging to “fundamentally reset” the company’s strategy “in service of growing cash flow and returns”. 

Last year, BP said it would scale back efforts to find develop new offshore wind farms and instead focus on delivering those already on its books, including projects off the coasts of the UK and Germany. It also merged its offshore wind business with that of Japanese renewables firm Jera Nex, and formed a new joint venture, and also put its onshore wind business up for sale.

BP has since withdrawn its transmission connection request for the 2.5GW Beacon Wind offshore wind complex off the coast of New York. 

Explaining why BP was now retreating from its previous renewable energy ambitions, Auchinloss said it reflected wider geopolitical and macroeconomic changes seen in the last five years, pointing to the Covid-19 pandemic and Russia's invasion of Ukraine. 

"Pressure on budgets meant that lower cost energy went out in most nations, and the pace of transition and decarbonisation, although important, was not as fast as envisioned. And, energy demand continues to rise. Our optimism for a fast transition was misplaced, and we went too far, too fast," Auchinloss said. 

He added: "The transition just is not being valued as much as it was five years ago... nations now want all forms of energy. Security of supply is top of the mind, affordability is top of the mind, and of course, nations continue wanting to transition as well, but the priorities have changed, and that's why you're seeing this strategy today." 

Oil and gas 

The new approach announced today commits BP to doubling down on fossil fuel exploration and investment, despite the worsening climate crisis. 

The company had previously targeted a 40% cut to oil and gas output while expanding renewable energy development 20-fold by the end of the decade under former CEO Bernard Looney, whom Auchincloss replaced in 2024.  

Instead, BP now aims to increase investment in oil and gas to around $10 billion per year through 2027, and said it expects returns of more than 15% as a result. 

Meanwhile, the company plans to reduce overall capital expenditure, targeting total Capex of $13-15 billion per year up to 2027. That is around $1-3 billion lower than in 2024, and is expected to be around $15 billion in 2025, BP said. 

'Alarm bells'

Responding to BP's announcements, James Alexander, the CEO of the UK Sustainable Investment and Finance Association, said the company's approach was now misaligned with the global efforts to tackle the climate crisis and global heating.  

"Today’s announcement from BP should sound alarm bells for investors and UK policymakers alike. Expansion of BP's oil and gas extraction activities is misaligned with long-term global energy projections and at odds with the decarbonisation trajectory needed to limit global warming to 1.5C," he said.

Alexander added: "This shift must raise serious questions over whether decisions are being made in the interests of the long-term viability of the company and whether it exposes investors to growing risks from stranded oil and gas assets."

The oil major's decision to commit to carbon emitting fossil fuels also drew criticism from environmental group Greenpeace. 

Charlie Kronick, senior climate adviser for Greenpeace UK, said: “This is positive proof that fossil-fuel companies can’t or won’t be part of climate crisis solutions. This conversation is over.  

“The Climate Change Committee has said today UK emissions must be drastically slashed – the reality is now it’s up to the government to see this through and to ensure companies like BP pay their share for the climate damage they’re causing.

“The UK is seeing more and more storms and floods – with people’s lives, homes or businesses ruined. Responding to the climate crisis can’t be driven by the whims of investors or the markets.”

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