Title: CPRS Australian Industry Impacts and Opportunities Carbon Expo Australasia
1CPRS- Australian Industry- Impacts and
OpportunitiesCarbon Expo Australasia
- Mark Proegler
- 31 October, 2008 Gold Coast
2Our Australia Carbon Footprint
- Our carbon footprint in Australia is significant
- 3 million tonnes CO2/year from our assets
- 30 million tonnes CO2/year from our liquid
products
3Views on Australias Climate Change Policies
- BP has been advocating climate change policy and
action in Australia for over a decade and we
welcome the Carbon Pollution Reduction Scheme
(CPRS) - The CPRSwith some modificationscan become an
effective policy tool to guide Australias
transition to a competitive, low emissions
economy - A key challenge achieving meaningful emissions
reductions as an early mover without
disadvantaging Australia businesses who compete
with others facing no such carbon constraint
4The CPRSPotential Impacts on BPs Business
- Refining Marketing
- Carbon costs from refinery emissions ( 2 million
tonnes/yr CO2) - These costs cannot be passed on import parity
pricing - Responsibility for liquid (transport) emissions
( 30 million tonnes/yr CO2) - These costs can be passed onbut will be offset
by an excise tax reduction - LNG
- Carbon costs from Northwest Shelf BP equity
emissions 1 million tonnes/yr CO2 and new LNG
projects in development - These costs cannot be passed on international
competition - CCS inclusion in the CPRS helps incentivise
sequestration for new projects
5The Emissions Intensive Trade Exposed (EITE)
Issue BP Views
The key challenge achieving meaningful emissions
reductions as an early mover without
disadvantaging Australia businesses who compete
with others facing no such carbon constraint.
- Solving this issue is fundamental to the schemes
success a key enabler - Australias success can be precedent-setting for
others such as the US - Policies to support EITEs are not an opt-out from
meaningful climate change action they are an
enabling pre-requisite
6BP Views- II
- Solving the EITE Issue
- Given the significance of the structural
adjustment required across the economy, the
Government should provide the necessary
transitional support from general revenue - The intensity metric used to designate EITE
activities should be based on value added
rather than revenue - Refining and LNG are EITE activities and well
continue to work with the Government and our
industry associations to define transitional
support - Complementary Measures
- We support emissions trading as the key policy
instrument as well as the need for transitional,
complementary measures to facilitate the
deployment of large-scale, low-carbon,
step-change technologies - Trading
- Let the market work no fixed prices
- Emissions Mitigation Unit (EMU) ?
7What BP is Doing Preparing for the CPRS
- External
- Advocating regulatory and policy frameworks
- Working collaboratively with stakeholders (e.g.
industry, governments, NGOs, think tanks) - Market-based policies like emissions trading
- Policies to encourage investment in low carbon
technologies - Internal
- Cross-business network established in 2007 to
facilitate 2-way communication, advocacy and
business readiness for evolving climate change
policies - Updating GHG reporting processesbuilding on
capabilities and experience with Greenhouse
Challenge - Leveraging emissions trading skills from EU ETS
for Australia developing processes for pricing
carbon in our products
8What BP is Doing- II
- Existing Businesses
- Continued investment in energy efficiency and
emissions reduction preparing for a carbon
constrained future
- New Businesses
- Developing material growth options for BP in
low-carbon technologies. - Building a portfolio of operating businesses and
ventures.. - Independent management, culture and advisory
board.
- Our business in 3 stages of development
- Growing Wind, solar and gas-fired power.
- Developing Biofuels and Hydrogen Energy.
- Incubator Carbon capture and storage, clean
coal, distributed energy and venturing.
9Thank You
- Mark Proegler
- Director, Environmental Policy
- Communication External Affairs
- BP Australia
- Mark.proegler_at_bp.com
- 61 3 9268 3721
10Solar power
- Currently
- BP is a leading solar manufacturing and marketing
company. - We have manufacturing capacity of 228MW with
facilities in Bangalore, Madrid, Frederick, Xian
and Sydney. - We have 30 years experience, 20 offices, over
2000 employees and installations in 160
countries. - Our commitment
- We are increasing our overall global
manufacturing capacity to 700MW and our sales to
800MW. - We are investing 97m to increase our casting and
wafering capacity at our Frederick plant in the
US. - Silicon activities
- Extensive investigation in alternative silicon
sources - provides opportunity for significant cost
reduction over traditional sources - scalable and in line with future growth
requirements - Continued development of our advanced Mono² and
commercialization - Mono² efficiencies with multi cost and processing
advantages
10
11Wind power
- Currently
- We have 2 well-established wind farms in the
Netherlands. - We operate a 300MW wind farm, cedar creek, in
Colorado with partner Babcock Brown. - We have five wind farms under construction in the
US in Texas we have the 60MW Silver Star I the
150MW Sherbino in Indiana we are building the
400MW project we have a 100MW Flat Ridge I
project in Kansas and in California we are
repowering the Edom Hills project from an
existing 11MW project to a 20MW project. - We have commissioned and inaugurated a 40MW
project in Maharashtra, India with
our partner Suzlon Energy. - We have a Strategic alliance with Clipper
Windpower to supply up to 4,250MW of wind
turbines over the next five years. - We have two turbine supply agreements with
Vestas, Nordex and GE,. - Our commitment
- Our target is to have commissioned 1,000MW by end
2008. - Pursue additional projects in Europe and Asia.
12Hydrogen Power
- Currently
- Together with Rio Tinto we have formed a
jointly-owned company, Hydrogen Energy, to focus
on hydrogen-fuelled power generation using fossil
fuels and carbon capture and storage technology. - Hydrogen Energy is planning the worlds first
industrial scale hydrogen power projects with
carbon capture and storage in Abu Dhabi and
California - We have entered into a strategic technology
agreement with General Electric to accelerate the
development of the technology and the deployment
of the concept. - Our commitment
- We plan to show that this wide range of
technologies will work at scale and will use a
variety of fuels to produce hydrogen and diverse
types of reservoirs for sequestration.
13Biofuels
- Currently
- BP and DuPont created a partnership to develop
and market advanced biofuels to address the
growing need for renewable fuels for
transportation. The first of these products is
biobutanol. - With ABF and Dupont, we are progressing a project
to construct a world scale bioethanol plant of
around US400million in Hull, UK. - We are investing 500 million over 10 years
(2006-2016) in the Energy Biosciences Institute
to explore and develop the application of
biosciences to energy-related problems. - We are examining the possibilities of using
jatropha, an oil bearing crop through a 9.4
million India project and a JV with D1-BP Fuel
Crops Limited to develop jatropha as a
sustainable biodiesel feedstock. Jatropha oil is
inedible, is not used in food and can be grown in
a way that doesn't compete with food land. - BP also intends to take a 50 stake in Tropical
BioEnergia SA, a JV that will invest 1
billion to construct two sugarcane ethanol
refineries in Brazil. Sugarcane is the
most efficient biofuel feedstock currently
available, it provides a greenhouse gas emissions
reduction of up to 80 and it lends
itself to further improvement through the use of
advanced biofuels technology. - Our Commitment
- We will focus on developing sustainable
feedstocks and investing in research work to
develop the technologies required to produce
advanced biofuels.
14Carbon capture storage (CCS)
- Currently
- In 1996 BP became a participant in the successful
CO2 saline aquifer storage project in the
Sleipner field offshore Norway, which injects
around one million tonnes a year of CO2. - In 2000, we were instrumental in setting up the
CO2 Capture Project, a partnership of leading
energy companies focused on investigating CCS
technology and developing new technologies to
reduce the cost of capture. - We have established the Carbon Mitigation
initiative with Princeton university to develop
carbon reduction strategies. - In Algeria at the In Salah gas field, were
testing technology that allows us to
capture CO2 from the produced gas and return it
underground to the natural reservoirs it
originally came from.. We have been reinjecting
CO2 at the In Salah field since 2004 with
around one million tonnes per year being
stored, providing a test bed for CCS at
industrial scale. - BP was instrumental in establishing the worlds
first industry association for CCS, the
UK-based Carbon Capture and Storage Association
(CCSA). - Our Commitment
- We believe that one of the keys to creating a
successful CCS industry is to ensure
that government provides viable long term policy
and regulatory support.
15Evolution of BPs Climate Change Actions
1997 BP speech at Stanford, explaining concern
on climate change and calling Group to action
2005 BP begins actively trading on the EU ETS
market
2008 BP completes first trade in CDM futures
contract on ICE ECX exchange
1999 BP became the first company to establish a
company wide internal emissions trading system
2002 BP met 10 GHG reduction target early.
Announced new target to hold emissions stable
whilst growing the business sustainably
2004 Science magazine published the results of
work carried out by Princeton University,
sponsored by BP. This work made a compelling case
that a range of technologies must be used if the
world is to stabilise its CO2 emissions.
1998 BP publicly announced target to reduce GHG
emissions 10 below 1990 levels by 2010
2000 BP invested in World Banks Prototype
Carbon Fund