BP Aggressively Chases Hydrogen Towards An Emission-Free Future

  • BP Plc BP CEO Bernard Looney gambled on hydrogen to power future low-carbon businesses to reduce their carbon footprint.
  • BP is in the early stages of developing a large, low-carbon hydrogen hub around its Whiting, Indiana refinery, Tomeka McLeod, BP's newly-appointed head of hydrogen in the U.S., told Reuters.
  • Hydrogen will have a crucial role along with offshore wind.
  • Also Read: BP Clocks 145% YoY Growth In Q3 Profit, Announces Further $2.5B Share Buyback
  • BP revamped its structure to create a dedicated hydrogen division led by Felipe Arbelaez. It also invested in large hydrogen projects in Australia, Europe, and Britain.
  • It also examined Mauritania projects' potential for developing green hydrogen in Oman.
  • BP's spending on low-carbon hydrogen will likely grow into the hundreds of millions by the decade's end.
  • BP spent roughly a quarter of its $15.5 billion budget in 2022 on low-carbon businesses.
  • Looney and BP's head of renewables, Anja-Isabel Dotzenrath, will reveal a clean hydrogen production target for the first time in February, aiming to capture a 10% share of hydrogen in "core markets" by 2030.
  • To expand its blue hydrogen business, BP depended on its oil and gas experience to build carbon capture and storage facilities, where it injected carbon into depleted reservoirs.
  • It also planned to boost its renewable power generation capacity to 50 gigawatts by 2030, which will partly power electrolyzers.
  • BP's project at its Whiting refinery will initially replace around 200,000 tonnes of grey hydrogen used by the refinery every year with blue hydrogen, McLeod said. 
  • The project could start operating by 2026-2027 and be expanded to green hydrogen.
  • In the second phase, the low-carbon fuel will be used by other heavy industries in the area to reduce some 36 million tonnes of CO2 emitted annually.
  • The project will rely on subsidies, highlighting hydrogen's challenge in competing with lower-cost fossil fuels.
  • The IRA offers a $3 per kilogram tax credit for clean hydrogen, which brings green hydrogen to par or even below the cost of grey and blue hydrogen, the report cited analysts.
  • "With the hydrogen production tax credits that are now in place, it has ... allowed green hydrogen to be a lot more competitive," McLeod said.
  • Subsidies will initially allow green and blue hydrogen to compete with grey hydrogen, allowing consumers to switch to cleaner fuel, McLeod said.
  • Price Action: BP shares closed lower by 1.01% at $35.36 on Friday.
  • Photo Via Company
Market News and Data brought to you by Benzinga APIs
Posted In: NewsMediaBriefsEurasia
Benzinga simplifies the market for smarter investing

Trade confidently with insights and alerts from analyst ratings, free reports and breaking news that affects the stocks you care about.

Join Now: Free!