bp aims to ramp up biofuel production
Fuels made from vegetable oil, waste cooking oil and grease are expected to play a central role in reducing greenhouse gas emissions for the difficult to decarbonise sectors like aviation and maritime.
BP said it will increase biofuel output three-fold by 2030 to 100,000 bpd, or roughly 4.5 million tonnes per year, according to Reuters.
The tripling is in line with forecasts from analysts at Barclays that predict global biofuel demand of 30 million tonnes by the end of the decade, compared with some 10 million tonnes now.
To reach its target, bp plans to construct by 2030 five biofuel plants processing "unloved" waste feedstock, known as HEFA, BP head of biofuels Nigel Dunn said.
He said: "They make perfect feedstocks for HEFA. The problem is there's only so much of them in the world. And the more HEFA plants that get built, the more challenging the dash for those feedstocks is going to get."
The premium biofuels are two to four times more expensive than today's fossil fuel-produced fuels and costs could rise further as producers struggle to tap feedstocks over the coming years.
BP will "almost certainly need" to acquire stakes in feedtocks manufacturers to secure supplies as competition intensifies, Dunn said.
He added: "We are going to be in as an integrated chain. That's our business today in fossil fuel and I think that's going to be the winning way."