BP, an oil and gas company, has reportedly called time on the rising fossil fuel adoption, following the unprecedented decline in oil demand as it may have possibly reached its peak.
As per the statement made by BP, the ongoing COVID-19 pandemic has severely impacted the oil industry, where the demand is expected to start declining in absolute terms. The annual report of the company has cited that renewable energy has been recorded as the fastest-growing energy source. The clean energy from solar panels, hydropower, and windfarms is also likely to replace the oil in the near future.
According to the chief economist of BP, Spencer Dale, the COVID-19 pandemic as well as the increasing global challenges posed by climate change will significantly lead to the transition to green energy in years ahead.
BP’s report further stated that the high impact of the coronavirus outbreak will result in a terminal decline in oil demand by the end of 2020. Bernard Looney, chief executive of BP, also has commented that these findings have enabled the company to gain knowledge of the changing energy landscape, which would be instrumental in reaching a net-zero carbon emission target by 2050 and embracing the low-carbon future.
Additionally, the oil demand is expected to be considerably declined in the next 30 years, i.e. by 80% to limit global heating. BP has announced its aim to increase its low-carbon investments over 8x by 2025 and 10x by 2030, in addition to cutting the fossil-fuel output by 40%. In order to reach these targets, the oil & gas company has recently entered the offshore wind industry via an investment of $1.1 billion to purchase a stake in 2 energy projects owned by Equinor.
The oil industry has encountered severe complications due to the rapid shift in preference for electric as well as hydrogen-powered vehicles. Another factor that is expected to take a toll on the oil demand is a strong effort towards reducing plastic footprint across the country in the coming decades.