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CPRS Australian Industry Impacts and Opportunities Carbon Expo Australasia

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Title: CPRS Australian Industry Impacts and Opportunities Carbon Expo Australasia


1
CPRS- Australian Industry- Impacts and
OpportunitiesCarbon Expo Australasia
  • Mark Proegler
  • 31 October, 2008 Gold Coast

2
Our 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

3
Views 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

4
The 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

5
The 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

6
BP 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) ?

7
What 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

8
What 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.

9
Thank You
  • Mark Proegler
  • Director, Environmental Policy
  • Communication External Affairs
  • BP Australia
  • Mark.proegler_at_bp.com
  • 61 3 9268 3721

10
Solar 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
11
Wind 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.

12
Hydrogen 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.

13
Biofuels
  • 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.

14
Carbon 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.

15
Evolution 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
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