Hello, everyone. I'm Bernard, and welcome to BP Week. Welcome also to those of you who are joining specifically for the launch of the Energy Outlook. Just six weeks ago, we launched a new strategy for BP. It is rooted in our purpose to reimagine energy for people and our planet, our ambition to become a net zero company by 2050 or sooner and to help the world get to net zero, and in our core beliefs about the energy transition. The video you just saw captured some of the big changes we are planning by 2030. A tenfold increase in low carbon investment to around $5 billion per year. A twentyfold increase in developed net renewable generating capacity to 50 GW. A doubling of customer interactions to 20 million per day. A near tenfold increase in EV charging points to over 70,000.
A 40% reduction in oil and gas production, becoming more focused, more resilient, and higher value. Energy partnerships with 10-15 major cities and three core industries. Emissions reductions of 30%-40% on Aims 1 and Aims 2. All underpinned by a resilient financial frame and in service of a compelling proposition for investors and other stakeholders. What we're doing has been described by many as both bold and ambitious, and we think so as well. We think it is ambitious, but we also think it is realistic, and we're confident we can deliver. This week is about showing you why we have confidence and in turn, aiming to give you confidence in BP and in our strategy. First and foremost, our new strategy is going to transform BP into a very different company.
Not overnight, given our size and scale, fast because the world needs change. Importantly, we want to be part of that change. We've been an international oil company for 111 years, and over that time, our main focus has been on producing resources. We are now refocusing on delivering solutions for customers as we transform into an integrated energy company. At the same time as we transform, this has to be a decade of delivery for everyone connected with this company. We want to deliver for our customers, our suppliers, our partners, and our employees. We want to deliver for the people who own and invest in this company. We want to deliver for the countries and regions around the world we support and serve.
We want to help cities like Houston and Aberdeen with their own decarbonization ambitions. We want to help governments that set net zero goals and back them and their low carbon policies. One debate here in the U.K. at the moment is around bringing forward the phase-out of sales of new petrol and diesel cars. We support that phase-out in the U.K. and believe it can and should be brought in sooner than 2040. Whether that's 2035, 2032, or 2030, we're up for it. Importantly, up for the measures and supporting policies to boost electrification and hydrogen in transport that would make it possible. Looking back over the past few weeks, we've been heartened by the response to our plan. I would like to thank everyone who took the time to share their views with us.
Understandably, there were a few concerns, some skepticism, and even a few myths. We hear that, and it is why we wanted to create an opportunity to share the strategy in much more detail and to answer the many questions we know that you have. We also wanted to make this a different kind of event, open to everyone over the next three days, while still meeting the needs of those who invest in us and those who inform and advise the capital markets. We will publish all of the presented materials online. If you have questions, you can poll for a question at the bottom of the webcast page. We'll try and get through as many as we can in the session at the end.
We want and need to take time to listen to everyone, those who can help us learn more, those who can help us improve our plan, those who are prepared to support and champion us as we transform. That is what this week is about. It's about earning your confidence and your support. We'll do our very best to make this time as useful to you as possible. Tomorrow and Wednesday are focused on delivery, and you'll hear from the people responsible for delivering the strategy, my colleagues on the Leadership Team. Today is a little different. We will focus on the work that has shaped our thinking and which guides our actions.
You'll hear from Giulia, our Head of Strategy and Sustainability, about our new sustainability frame, the guide rails within which we intend to reimagine energy so that we do so for the good of the planet and in a way that improves people's lives. You will hear from Kerry, our Head of People and Culture, about how we're reinventing BP in a way that unlocks the amazing potential of our people. First, we're going to hear from Spencer Dale, our Chief Economist. Normally, Spencer publishes the BP Energy Outlook in February. This year, we asked him to delay it. His team's analysis of the future energy landscape has shaped the core beliefs that, in turn, have informed the strategy we announced last month. With hindsight, the delay has also allowed for the impact of the COVID-19 pandemic to be factored into the Energy Outlook.
I want to make one thing very clear, though. Our strategy is informed by the Energy Outlook. The Outlook is not informed by our strategy. It is the same objectively researched and documented product as it has been every year for the last 10 years. With that, let me hand you over now to Spencer for this year's launch of the BP Energy Outlook.
Thank you, Bernard. Good afternoon, good morning, good evening, everyone. Let me add my welcome and thanks to you all for joining BP Week, and for the launch of this year's Energy Outlook. There are lots of differences to this year's outlook, not least this launch venue in a very high-tech film studio. I'm not sure the basement room in BP's offices that we normally use will ever quite feel the same again. Bernard, please note. I'm missing the crowd of familiar faces that normally join me for the launch. I know watching online is not the same, do stay with us. The issues surrounding the energy transition are hugely interesting and have never been more important. Please submit your questions as I go along for the Q&A session that follows. Always the most fun and interesting part.
As we did last year, as part of the Q&A session, we plan to conduct a poll of your views about the energy transition. Stay tuned for that as well. Despite all these changes, two aspects of the Outlook remain the same. First, the Energy Outlook is still very much a team effort. That includes the other members of the economics team, who have been stretching Zoom to its very limits in recent months, as well as a host of BP colleagues from far and wide who have contributed their expertise. The economics team holds a pen. The insights come from right across BP. A huge thanks to all those involved. Second, the purpose of the Outlook has not changed. In particular, the role of the Energy Outlook is not to predict or forecast how the energy system is likely to change over time.
All the scenarios discussed in this Outlook will be wrong. We can't predict the future. Moreover, we know we can't predict the future. Rather, the role of the Outlook is to help better understand the range of uncertainty we face. Which developments seem pretty similar across a range of scenarios, and which are highly dependent on the precise policy or technology assumptions made? Improving our understanding of this uncertainty is important input into designing a strategy that is robust and resilient to the range of different outcomes we may face. As Bernard said, that's why we're launching this year's Outlook as part of BP Week, which is looking in depth at BP's new Strategy. A key part of BP's new Ambition is also to help the world get to net zero.
In that context, I hope this year's outlook will be of use to others who are seeking ways to accelerate the energy transition and get to net zero. Lots of new analysis in this year's bumper booklet. If we start to take a peek inside, I promise that's the only Harry Potter trick I have for today, much of the analysis is focused around three main scenarios, which explore the possible nature of the energy transition over the next 30 years. Rapid, shown here in orange, is based on a series of policy measures led by a significant increase in carbon prices, such that carbon emissions from energy use fall by around 70% by 2050. This scenario is broadly comparable to the rapid transition scenario included in last year's outlook.
Net Zero, in blue, assumes that policies in Rapid are reinforced by significant shifts in societal behaviors and preferences, which further accelerate the reduction in carbon emissions. The design of Net Zero is based on the view that there are limits to the extent to which a really accelerated energy transition can be driven solely by government policies. Government policies may need to be reinforced by shifting societal preferences. As the name suggests, carbon emissions from energy use are almost entirely eliminated in Net Zero, falling by over 95% by 2050. Finally, Business As Usual, or BAU, shown in green, which assumes that government policies, technologies, and social preferences continue to evolve in a manner and speed seen over the recent past.
A continuation of that progress, albeit slow, is enough to cause carbon emissions to peak in the mid-2020s. Little progress is actually made in decarbonizing the energy system, with carbon emissions by 2050 around only 10% below their current levels. BAU is broadly comparable to last year's evolving transition scenario. Primary energy demand increases over the next 10- 15 years in rapid and net zero before broadly plateauing as gains in energy efficiency accelerate. In contrast, energy demand grows over the entire outlook in BAU. In all three scenarios, the growth in energy demand is driven entirely by emerging economies as prosperity and living standards improve.
In the main booklet, we describe how it is possible to compare these carbon pathways with the range of scenarios included in the 2019 IPCC report, where the pink swath here shows a range of IPCC scenarios judged to be consistent with maintaining temperature rises well below two degrees C, and the blue swath, the range scenario, is consistent with maintaining temperature rises below one and a half degree C. As you can see here with Rapid, it is broadly in the middle of that pink 2.5 degree range throughout the next 30 years. For Net Zero, the initial pace of decline in carbon emissions is a little bit above the one and a half degree swath, but it falls to the lower half of that blue one and a half degree swath by the end of the outlook.
As always, the full booklet contains lots more than I can do justice to today. If today's discussion whets your appetite, please do go online and delve deeper. Today's discussion is built around eight questions. Although there are many, many questions surrounding the energy transition, most of my discussions with Bernard and Giulia and the rest of the strategy team over the past year as a new strategy has been developed have revolved around these eight questions. In a world of huge uncertainty, what do we know about how the energy system might change? How might the coronavirus pandemic affect the outlook? What are the prospects for oil demand, and how are they shaped by the mobility revolution? What role could natural gas play in the energy transition?
Just how quickly will renewable energy grow over time, where the options seem to be somewhere between really quick and really, really quick? How will the growing importance of electricity and power markets shape the energy transition? What role for hydrogen and bioenergy as the world moves to a low carbon energy system? Finally, what are the potential dangers and costs of delaying the energy transition? What do we know about how the energy system may change? One way into this question is to consider changes in the energy system, which are common across all three of the scenarios. Although the three scenarios, Rapid, Net Zero, and BAU are by no means comprehensive, they do span a wide spectrum of possible transition paths and outcomes.
As such, if some features of the energy system are common across all three scenarios, that may give us some confidence that they might materialize in some shape or form. In that context, three features in particular are worth highlighting. First, the role of fossil fuels, coal, oil, and natural gas declines over time, falling from around 85% of primary energy today to between 60% and 65% and 20% across these three scenarios. In all three scenarios, this corresponds to a decline in the absolute demand for fossil fuels over the next 30 years. That would be entirely unprecedented. In the modern history of energy, there has never been a sustained decline in the consumption of any traded fuel. The shares of coal and oil have declined over time, but not their absolute levels of consumption. That changes in all three scenarios.
Second, the growth in primary energy is dominated by renewable energy, which for the purposes of the Energy Outlook includes wind, solar, geothermal, and bioenergy, but excludes hydroelectricity. The share of renewables in primary energy grows from around 5% today to between 20% and 60% in the three scenarios. In doing so, renewables in all three scenarios, including BAU, penetrate the energy system more quickly than any fuel in modern history. Again, unprecedented developments common across all three scenarios. Third, the growth in renewables is supported by the increasing role of electricity as the world continues to electrify with a share of electricity in total final consumption, again, growing in all three scenarios. Three features of energy demand apparent in all three scenarios, a decreasing role for fossil fuels, increasing share of renewable energy, supported by the growing electrification of the energy system.
Another way into this question of what do we know, rather than identify common trends, is to ask how the structure of the energy system may change if and when there is a sustained transition to a lower carbon energy system. To do this, we can focus on how the energy system evolves in Rapid, which remind you, is broadly consistent with maintaining temperature rises well below two degrees C. The point here is not to focus on the precise profiles in Rapid, since these will vary across different scenarios. Rather, I want to highlight some more generic features of how the energy system might evolve if and when there is a material transition to a lower carbon energy system. Now, the eagle-eyed amongst you may have spotted that this chart starts in 1900, so it's covering a wide span of history.
The point of doing so is to highlight how, for much of modern history, the global energy system has tended to be dominated by a single energy source. For the first half of much of the last century, much of this was dominated by coal, shown here in black. As black declined, you saw an increasing role for oil, shown here in green. In contrast, the energy transition in Rapid means that for much of the next 20 years, the global energy mix is far more diversified than previously seen, with oil, natural gas, non-fossil fuels, renewables, and coal all providing material parts of the energy system. This greater variety of fuels means that the mix is likely to be increasingly driven by customer choice rather than fuel availability, which has been a dominant driver for much of the past 100 years.
This more diversified fuel mix will also increase the need for integration across different energy sources and carriers. Linking back to the previous chart, the growing differentiation is further enhanced in Rapid by the increasing importance of electricity and, to a lesser extent, hydrogen. These energy carriers are more costly and inefficient to transport long distances than traditional hydrocarbons, causing energy markets to become more localized. The increasing diversification of the fuel mix also leads to greater competition, both across different forms of energy as they compete for market share, and within individual fossil fuels as resource owners compete to ensure their energy sources are produced against a backdrop of falling demand. This heightened competition increases the bargaining power of consumers, with economic rents shifting away from traditional upstream producers.
To repeat, the precise timing and extent of these changes will vary across different scenarios. There is nothing special about Rapid.
A transition to a lower carbon energy system, if and when it happens, seems likely to be characterized by at least some of the generic features highlighted in Rapid. A more diversified fuel mix driven by customer choice, supported by increasing levels of integration across fuels, increasingly localized energy markets, and growing competition with economic rents shifting away from the upstream. That's what I wanted to say on this first question. Turning to the next question, how has COVID-19 affected the outlook? The COVID-19 pandemic is primarily a humanitarian crisis, with the reported death toll as of now exceeding 900,000 people. The fact that the number of new cases continues to increase and there is still no generally approved vaccine means that any assessment of the ultimate impact of the virus on the economy and the energy system is obviously very preliminary and highly uncertain.
The central view used in all three scenarios, shown here for Rapid, is that economic activity partially recovers from the impact of the pandemic over the next few years as the virus is brought under control and restrictions are eased, but some effects persist. The pandemic is assumed to reduce the level of global GDP by around 2.5% in 2025, increasing to around 3.5% in 2050. These economic impacts fall disproportionately on emerging economies, particularly India, Brazil, and Africa, whose economic structures are most exposed to the economic fallout from COVID-19. Energy demand is assumed to be reduced by around 2.5% in 2025 and 3% in 2050.
The majority of this impact stems from the weaker economic environment, but there's also an assumed impact from the various behavioral changes triggered by the pandemic as people travel less, switch away from public transport into alternative modes of travel, and work from home more frequently. Many of these behavioral changes are projected to dissipate over time as the virus subsides and public confidence is restored. Some changes, particularly increased working from home, are assumed to persist. As shown here in these green bars, the impact from the virus are most pronounced on oil demand, reducing oil consumption by around 3 million barrels a day in 2025 and 2 million barrels a day in 2050. The greater impact on oil demand largely reflects the disproportionate impact of the virus on emerging economies, which are the principal source of oil demand growth over the outlook.
To a lesser extent, the impact of the behavioral changes, which are concentrated in the transport sector. Although the assumed impacts from COVID-19 don't change the fundamental shape of any of the scenarios, three other points are worth highlighting. First, the impact of COVID-19 on oil demand means that in both Rapid and Net Zero, the level of demand never recovers to its pre-crisis level. As such, the pandemic has the effect of bringing forward the implied peaking in oil demand to 2019 in both Rapid and Net Zero. The same is also true for the profile of carbon emissions from energy use, which also peaks in 2019 in both Rapid and Net Zero. Second, there is considerable risk that the impact from coronavirus may be greater than the central assumption.
The main booklet considers an alternative case, shown here in the chart on the right, in which COVID-19 reduces the level of global GDP by 4% in 2025 and by almost 10% in 2050, with correspondingly bigger impacts on the demand for energy. Third, it's possible that the fragilities exposed by COVID-19, together with a growing commitment to build back better, supported by unprecedented levels of government intervention, may help to accelerate the energy transition. That possibility is not explored explicitly in the Outlook, which doesn't attach weight to the different scenarios. If that were the case, the impact of COVID-19 on the future energy system could be far more substantial. The third question concerns the outlook for oil demand and how that might be affected by the mobility revolution. Oil demand falls over the Outlook in all three scenarios.
This decline is most pronounced in Rapid and Net Zero, shown here, in which after peaking in 2019 at close to 100 million barrels a day, oil demand by 2050 falls to a little below 50 million barrels a day in Rapid and to around 25 million barrels a day in Net Zero. The outlook for oil consumption in BAU, shown here in green, is more resilient, with demand recovering to around its pre-COVID levels, where it remains for the next 10- 15 years before gradually edging down over the last 10 or 15 years or so to around 90 million barrels a day by 2050.
The scale and pace of these falls stems primarily from the increasing efficiency and electrification of road transportation, with a declining use of oil within road transport, shown here by these two blue bars for the three scenarios, accounting for between 50% and 60% of the total reduction in oil demand in Rapid and Net Zero, and an even greater proportion in BAU. If we dig a little deeper into the role of electrification, the electrification of road transportation is most pronounced in Rapid and Net Zero, supported by ever-tightening vehicle efficiency standards, higher carbon pricing, and especially within Net Zero, a further shift in societal preferences towards electric vehicles. By 2050, upwards of 3/4 of all kilometers traveled by passenger cars and trucks are electrified in Rapid and Net Zero.
Even in business as usual, over 25% of road transportation is electrified in 2050, compared with less than 1% today. On the passenger car side, the steep rise in electrification of road transportation from the early 2030s is driven by the interaction of electric vehicles with shared mobility and autonomous vehicles, the three elements combining to revolutionize the mobility sector. The emergence of fully autonomous vehicles from the early 2030s in Rapid and Net Zero significantly reduces the cost of shared mobility services, causing consumers to shift away from public transport and private vehicles into these so-called robotaxis. Think fully autonomous Uber or DiDi. Now, the important point here is that the vast majority of these robotaxis are electrified. That partly reflects the lower running costs of electric vehicles, which really matters for robotaxis since they are driven far more intensely than privately owned cars.
It's also supported by the improved air quality associated with electric vehicles, especially in major cities and towns where the use of robotaxis is concentrated. As you can see here from the chart on the right, the increasing competitiveness of robotaxis, combined with a greater intensity of use, means that by the early 2040s, in all three scenarios, they account for around 40%-50% of passenger car kilometers powered by electricity. The nature of the mobility revolution, particularly with the emergence of autonomous vehicles, means electrification is likely to go hand in hand with increasing importance of shared mobility services. That's the interaction of oil demand with the mobility revolution. The next question concerns the role that natural gas might play in the energy transition. The outlook for natural gas is more resilient in all three scenarios. Take, for example, the outlook in Rapid, shown here in orange.
You may recall that oil consumption in Rapid peaked in 2019 and fell by around 50% by 2050. In contrast, consumption of natural gas in Rapid continues to grow for the next 15 years or so before gradually edging back to just below its current levels. This more resilient outlook for natural gas reflects two main components. First, the role of natural gas in supporting a shift away from coal in fast-growing developing economies, particularly in Asia, over the next 15 years or so. Second, the role of natural gas when combined with carbon capture use and storage, CCUS, as a source of near zero carbon energy as the world increasingly decarbonizes. Let's take these two components in turn.
The role of natural gas in supporting a shift away from coal stems from the possibility that renewables and other non-fossil fuels may not be able to grow sufficiently quickly to replace coal on their own, at least in the short to medium run. This may particularly be the case in emerging economies in which energy demand is growing quickly, making it hard for non-fossil fuels to both meet the growing new demand and replace the existing coal. In these situations, natural gas may also need to increase for a period to help fill the gap left by coal. This next chart illustrates the supporting role. The idea of the chart is to consider the role of gas in a scenario in which there's an accelerated energy transition, such as in Rapid, compared with a slower transition like BAU.
The chart focuses on India and other parts of developing Asia where energy demand is growing quickly, there is greatest need for this supporting role. The chart compares how the shares of different types of energy evolve in Rapid relative to those in BAU. In particular, the black line here shows how the share of coal in Rapid declines far more quickly than in BAU. These negative numbers reflect the faster pace of decarbonization. A similar but less pronounced trend is also seen here for oil, shown in green. Much of this decline in the growth of coal and oil is offset by a faster growth in the share of renewables and other non-fossil fuels, shown by the blue line here. Renewable energy increases more than 30-fold by 2050. Even that is not enough to fill all of the gap left by coal and oil.
The share of natural gas, shown here in red, also increases, particularly over the first half of the Outlook. To put these movements in context, natural gas demand in India and other Asia more than doubles over the first 15 years in Rapid, accounting for around two-thirds of the global growth in demand over this period. The boost to natural gas from this supporting role in scenarios like Rapid, in which there's a relatively fast energy transition, could be quite substantial. The second component underpinning the relative resilience of natural gas is in its increasing role as a source of near zero carbon energy when combined with CCUS. By 2050, around 40% of the natural gas consumed in Rapid is used in conjunction with CCUS, capturing over 2.5 Gt of CO2 emissions.
This share is even higher in net zero, with around three-quarters of natural gas used in conjunction with CCUS. As you can see in the chart on the right, natural gas used with CCUS accounts for between 8% and 10% of primary energy in 2050 in rapid net zero, providing near zero carbon energy both directly to the industrial and power sectors and indirectly via the production of blue hydrogen. I'm going to come on and say more about hydrogen in a moment, but before I do, I want to turn to the fifth question. Just how quickly will renewables grow over the next 30 years? The focus here is on renewable energy used in the power sector, which includes wind and solar power, biomass and geothermal.
As I mentioned at the outset, renewable energy increases sharply in all three scenarios, led by wind and solar power, shown here in the blue and yellow bars. As shown here on the chart on the right, the strong growth is underpinned by continuing pronounced falls in the cost of wind and solar energy as they move down their learning curves, with solar costs shown here in this bottom set of three lines, close to falling by 60% or more in all three scenarios over the next 30 years. This rapid growth in wind and solar power generation is made possible by a significant acceleration in the development of new wind and solar capacity.
As you can see from this chart here, the growth in new capacity is particularly pronounced in Rapid and Net Zero over the first half of the outlook, with increases in new capacity averaging close to 350 GW per year in Rapid and approaching 550 GW per year in Net Zero. That compares with record increases seen in recent years of around 150 GW, so a pronounced acceleration. The sharp slowing we see in the rate of build-out in the second half of the outlook in those two scenarios reflects an easing in the pace at which wind and solar penetrate the power sector as the intermittency costs associated with their increasing use grows. Although the pace of new capacity development in BAU, shown in green, is less dramatic, average increases average around 200 GW-300 GW per year over the outlook. Again, still significantly greater than recent build-out rates.
All three scenarios point into a significant pickup in the pace of wind and solar development. This faster pace of build-out in turns implies a significant increase in the level of investment needed to finance this development, shown here in the chart on the right. The average investment in wind and solar capacity in rapid and net zero is between $500 billion and $750 billion per year. That is several times greater than recent investment levels in wind and solar, and also considerably higher than the levels of investment in upstream oil and gas in these two scenarios. These levels of investment in wind and solar power may seem eye-poppingly high at first, but it's worth noting they are roughly equivalent to only around 3% of total global business investment last year. They are perfectly achievable if there's sufficient collective will and support.
There is more analysis of the investment implications of the different scenarios in the main booklet, so please do check that out. The strong growth in renewable energy goes hand in hand with increasing electrification of the energy system, which is the focus of the next question. As I mentioned earlier, the share of electricity in total final energy use increases in all three scenarios. What's also striking, shown here in the chart on the right, is that the increase in electricity demand is very similar in all three scenarios, growing by around 80% over the next 30 years. Strong growth in electricity in all three scenarios.
In terms of the power sector generating this electricity, the key common shift in all three scenarios is a shift to a lower carbon energy mix, driven by wind and solar power, shown here in orange, gaining share relative to coal in black. You can see in all three scenarios, this increasing share of renewable power offset by declining share in coal. This shift in the fuel mix underpins the strong growth of renewables we just spoke about. Moreover, it plays a crucial role in decarbonizing the entire energy system. A move to greater electrification, be it in transport or heating or industry, has little benefit if the energy used to generate that electricity is not decarbonized. The carbon intensity of power generation in Rapid falls by 90% by 2050, compared with just 50% in BAU.
Indeed, in BAU, the power sector remains the largest single source of carbon emissions over the entire outlook. In contrast, in net zero, the increasing use of bioenergy combined with CCUS, so-called BECCS, means that CO2 emissions from the power sector are net negative by 2050. The shift towards an ever-increasing share of wind and solar power begins to flatten out in the 2040s. You can see in both Net Zero and Rapid, you can see just the pace at which the share is increasing starting to flatten out. This reflects the cost associated with managing the associated intermittency rises. Batteries play an increasing role in managing this intermittency. It's important to remember that balancing issues don't just arise over very short-term intervals, seconds, minutes, and hours. They also concern much longer periods across days, weeks, and importantly, seasons.
Batteries, at least based on current technologies, are less well equipped to deal with managing these longer frequencies. As this diagram tries to convey, as the importance of wind and solar power increases in different power systems, a variety of technologies and responses to balancing the energy system and ensuring the availability of firm power are likely to be needed, including hydrogen, bioenergy, and natural gas with CCUS. The increasing use of electricity and the changing mix of power generation likely to play a central role in shaping global energy markets over the next 30 years. Thinking about the essential characteristics of a low carbon pathway, decarbonizing the power sector and electrifying end energy use are core components.
Not all activities can be easily or efficiently electrified, meaning there's a role for other types of energy and energy carriers in a low carbon system, including hydrogen and bioenergy, which is the focus of the next question. The use of hydrogen as an energy carrier increases significantly in the second half of the Energy Outlook in both Rapid and Net Zero. The role of hydrogen in Business as Usual is far more limited. I haven't included it on these charts. Hydrogen complements the increasing electrification of the energy system in Rapid and Net Zero by providing energy to activities which are difficult or costly to electrify, including high temperature processes in industry and long distance transportation, particularly in heavy duty trucks. By 2050, hydrogen accounts for around 6% of total final energy consumption in Rapid, and over 15% in Net Zero.
The production of hydrogen in both scenarios is dominated by so-called green and blue hydrogen. In the Outlook, all the green hydrogen is assumed to be made by electrolysis of water using renewable power. The blue hydrogen is mainly extracted from natural gas combined with CCUS. By 2050, there are broadly equal amounts of blue and green hydrogen in both scenarios. Importantly, the production of blue hydrogen helps overall global supplies of hydrogen to grow relatively quickly without relying too heavily on renewable energy. This matters for two reasons. First, relying exclusively on green hydrogen would require an even faster expansion in wind and solar capacity. This is a chart I just showed you a moment ago, showing the sharp acceleration in wind and solar capacity in all three scenarios.
In the extreme case, in which all hydrogen was produced using wind and solar power, to achieve the same production of hydrogen as in Net Zero, would require even faster growth of wind and solar capacity, shown here by this blue bar. This is how much wind and solar capacity would have to grow to achieve that same level of hydrogen as in Rapid. The general point here is that relying too heavily on green hydrogen could constrain the pace at which the hydrogen economy can grow. Second, the production of green hydrogen diverts renewable energy that could otherwise be used to decarbonize the electricity used in everyday uses. This is important given that the vast majority of domestic power sectors are not fully decarbonized over the first 20 years or so of the Outlook.
The shift away from fossil fuels and towards a low carbon energy system in Rapid and Net Zero also leads to an increasing role for bioenergy. The bioenergy takes several different forms, with biofuels used mainly in long distance transportation, doubling or more in the two scenarios. Biomethane, increasingly used as a direct substitute for natural gas, accounting for between six and 10% of total gas consumption by 2050 in Rapid and Net Zero, and biomass used predominantly in the power sector. By 2050, bioenergy accounts for around seven% of primary energy in Rapid and close to 10% in Net Zero. Our final question concerns the dangers of delaying the start of a decisive transition to a low carbon energy system.
Rapid and Net Zero both assumes that governments and society begin to change policy and behavior relatively quickly, such that carbon emissions from energy use start to fall over the next few years. In reality, there could be an extended delay before these types of changes are implemented, with the world continuing on its current unsustainable path. This possibility is explored in an alternative delayed and disorderly scenario, in which global energy system is assumed to move in line with BAU until 2030. You can see it here, moving in line for the first 10 years with BAU, until sufficient policies and actions are undertaken, such that cumulative carbon emissions over the entire Outlook are the same as in Rapid.
This assumed target for cumulative carbon emissions reflects the existence of a finite carbon budget, which implies that continuing high levels of emissions in the near term have to be compensated for at a later date. You can see this in the red line here in this chart. The continuing high levels of carbon emissions over the first 10 years of the Outlook when the world continues in line with business as usual, are then offset by carbon emissions falling below Rapid in the second half of the Outlook. Delayed and disorderly is based on the view that the longer the world continues along an unstable path, the greater the likelihood that societal pressures will grow, triggering a decisive change. To paraphrase the late great German economist Rudi Dornbusch, the energy transition can take much longer to come than you think, but then happen much faster than expected.
The scenario is obviously very stylized, since the nature of any delayed transition path will depend on the factors triggering the eventual change and the subsequent response of government and society. Importantly, the scenario is based on the assumption that it's not possible to make greater progress in energy efficiency or fuel switching by 2050 than is achieved in Rapid. The significance of this is that there are real costs to delay. If the required reductions in carbon emissions cannot be met through energy efficiency or fuel switching, the only other way they can be achieved in this scenario is via widespread energy rationing. That is policies which stop or restrict any energy using outputs or activities, generating significant economic costs and disruption. In reality, other options may be possible other than outright rationing, such as various negative emissions technologies.
The general point here is that the existence of a finite carbon budget means that the longer the world continues on an unstable path and decisive action is delayed, the more costly and disruptive the eventual pathway is likely to be. The famous adage by Rudi Dornbusch was based on an earlier observation from the American economist Herbert Stein, which states that if something cannot go on forever, it will stop. When applied to the current unsustainable path of the global energy system, Stein's law has pretty clear and important implications. Sometimes the simplest observations can be the most insightful. That's all I wanted to say on the eight questions in this whistle-stop tour of the new Energy Outlook. To conclude, this year's outlook has changed in several respects.
It's been extended to 2050 to include the period in which, at least in some of those scenarios, the pace of transition really accelerates, and the range of scenarios explored in detail has been expanded to help build a clearer sense of the range of uncertainty surrounding the future of the energy system. That span of uncertainty and common trends across the scenarios have helped to inform some core beliefs that underpin BP's new strategy. Core beliefs as to how the structure of energy demand may change over the next 30 years, with the role of fossil fuels diminishing, offset by the increasing importance of renewable energy and electricity.
Core beliefs as to how the structure of energy markets may evolve as the world transitions to a low carbon energy system with a more diverse energy mix, greater consumer choice, more localized energy markets, and increasing levels of integration and competition. Bernard, Giulia, and the rest of the leadership team will be coming back to those core beliefs over the next few days as they discuss the strategy in more detail. I've been able to provide only a brief glimpse of the analysis in this year's Outlook. If you have time, please do take a look at the full booklet, and also please let us know what you think. We are very aware of the huge uncertainty surrounding the energy transition and the future of energy markets. Any feedback on the analysis, and even better, how it could be improved, would be very welcome.
Thank you, Spencer, for a brilliant overview and highly entertaining, as always. What we have just heard has informed everything else you're going to hear from us for the rest of this week. What I'd like to do now is three things. First, emphasize the connections between our strategy, our ambition, and the context provided by the Energy Outlook. Second, to provide a brief recap of the three things we set out on the fourth of August, the strategy itself, the financial frame, and the investor proposition. Third, introduce five key questions we have heard so far about the strategy and that we are aiming to answer this week. Starting with those connections, as you just heard, global energy demand is going up. Emissions do not look like they are coming down fast enough.
The world is not on a sustainable path, but as Spencer points out, this is not set in stone. There is no one fixed pathway. There is no one single solution. There are a range of possible pathways to Paris, and that range is fundamental to how we have developed our strategy. We do not want business as usual, but equally, we must be resilient to it. We do want a rapid transition, and we see huge opportunity in it. That is why our strategy is resilient across scenarios, yet weighted towards a rapid transition. It is consistent with our purpose of reimagining energy for people and our planet. It serves our ambition of getting BP to net zero by 2050 or sooner and helping the world get there as well. It balances cash flow from hydrocarbons with ambitious plans for growth in the energy transition.
Having set that context, let me now briefly recap the three things we set out on the fourth of August. The strategy itself, which is built on three focus areas of activity for BP. Low carbon electricity and energy, convenience and mobility, and resilient and focused hydrocarbons. With three key sources of differentiation where we can amplify value in each of these focus areas by leveraging capabilities across BP. In the integration of energy systems along and across value chains, in partnering with countries, cities, and industries as they shape their paths to net zero, and in innovation, particularly with a strong focus on digital to generate efficiencies, support the creation of new businesses, and to enable new ways of engaging with our customers. This strategy is underpinned by our new sustainability frame that you will hear more about from Giulia shortly.
To deliver this strategy, we need to be disciplined, and that brings me to the second point. That strategy is enabled by a resilient financial frame based on a set of firm principles and priorities. Murray will provide more detail on Wednesday, but at a high level, this is composed of a coherent and flexible approach to capital allocation and a cascade of five clear priorities, starting with the first priority of a reset and resilient dividend, and ending in the return of surplus cash to investors by means of a commitment to share buybacks. Underpinned by a resilient balance sheet that prioritizes a strong investment-grade credit rating, and with a disciplined approach to how we invest our capital, governed by clear criteria and a rigorous process of reviewing, challenging, and managing every dollar of investment. Third, we outlined our new clear, and we believe compelling investor proposition.
We believe this will deliver long-term shareholder value through committed distributions, profitable growth, and sustainable value. As you can see, we laid out a lot of information on the 4th of August, and as I mentioned earlier, we've received a lot of feedback, much of it positive. Thank you, everyone who has taken the time to share their views with us. We are transforming this company for the people who own it, the people who depend on what we do, and the BP people who deliver what we do each and every day. In other words, our shareholders, society, and our fellow staff members. Those are not always the same people, but increasingly, we all want the same things. Firm, affordable, cleaner energy produced by a company that is a force for good. We need to be a source of competitive returns.
We see no contradiction, no trade-off in that. This is about creating sustainable value. We believe our strategy meets each and all of those needs. As we have listened over the past few weeks, we have identified five key questions that we believe are important in terms of earning your support and giving you confidence in BP and in our plans. Our aim is to provide comprehensive answers to them throughout the week. I will provide a high-level summary now as I introduce those questions. First question: Why is a 40% reduction in your oil and gas production by 2030 the right thing to do? Some people think it's not enough, that it should be 100%. Others think 40% is too much. This is what we believe. First, we have worked hard to find a balance that enables growth in cash flow and returns.
Our EBITDA and ROACE, as we define them, at the same time as transforming the company. At the core is a relentless focus on value over volume. It's a difficult balance to find, but we believe we have found it. What does that enable? We can deploy our highly skilled workforce on only the highest margin barrels, and you will see how we plan to improve margin in Gordon's presentation. We will reduce capital intensity with our long wave of investment in new projects coming to an end, as well as our cost and efficiency drive. We expect our development costs to come down to around $9 a barrel, well below our 2019 depreciation rate of $16 a barrel. We can maximize value by divesting assets where they are worth more to others.
Second, in redeploying capital into low carbon and capturing growth in these markets, we decarbonize and diversify BP, and in doing so, reduce risk. Third, a 40% reduction by 2030 puts us well on the way towards becoming a net zero company by 2050 or sooner. This is a clear source of differentiation for us, and one that we believe is right for where we want to take BP and for the energy transition. To dispel any myths about a fire sale, we are in no rush to sell our hydrocarbon assets. We have a strong balance sheet underpinned by a wall of cash and reinforced by our recent $12 billion hybrid issuance and the disposal of our petrochemicals business. The $25 billion divestment program is already 50% underpinned by agreed transactions, with a suite of options being developed for the other half.
The decisions we take over the coming years will be thoughtful, value-driven, and disciplined, and will continue to enable us to high-grade our portfolio, building resilience to low prices while remaining leveraged to higher prices, reducing operational emissions, and allowing us to achieve higher margins overall. That links to the second key question. How will we transition our cash flow from hydrocarbons to low carbon over the next decade? Fundamentally, this question gets at how we will maintain the necessary cash flows from hydrocarbons while we scale our low carbon and transition businesses. I will provide more detail on how we expect each of the three vertical focus areas to contribute, and start quite deliberately with convenience and mobility, which is a business driving ratable growth over the period. It has grown pre-tax earnings by 7% each year since 2014.
It is a high-quality business exposed to major growth markets and with a track record of delivering around 20% returns. We expect our strong brands and partnerships to contribute towards a near doubling in earnings through to 2030 while maintaining these strong returns. Turning next to resilient hydrocarbons. Firstly, this is not about turning off one tap and turning on a different one. This is about adjusting the flows. This part of our business is an engine of cash flow that is running really well, and we intend to keep it that way. In oil and gas, we have 25 major projects online, eight due to come online before the end of 2021, and 11 more in the next few years, adding to a wave of higher margin production.
We have improved plant reliability by 1% over the past five years, adding almost $200 million in gross margin last year compared with 2014. We are planning for another 1.6% improvement by the middle of this decade. We are holding our base decline to between 3% and 5%. We have a resilient and high-graded refining business with strong availability and top quartile refining margins. We are rolling out more efficient ways of working, like agile, centralization, and digital technologies that have had remarkable impacts where they have already been introduced, like in Azerbaijan. Finally, to low carbon, electricity, and energy, where we will initially invest to grow, being disciplined in our choices and expected to make more of a contribution in the second half of the decade. When put together, we see all this contributing to growing cash flow over the next five years.
Taken together, underlying EBITDA is expected to grow by 5%-6% per year through to 2025, with returns in the range of 12%-14% in 2025, up from around 9% today. After allowing for the impact of divestments and reflecting the expected share buyback commitment, EBITDA per share is expected to grow by 7%-9% per year through to 2025. From 2025, the transition really begins as we head towards 30% of our capital base being invested in the energy transition by 2030. We do expect the contribution from our oil, gas, and refining businesses to decline over this latter period. We expect this decline to be more than offset by ratable growth in convenience and mobility.
In low carbon electricity and energy, where we expect EBITDA growth to accelerate as the capital we are investing matures and we begin to see the benefit of scale across the business. We also expect to sustain returns at 12%-14%. The third question, the scale of your renewables ambition is huge. How achievable is this? We are aiming to have developed 50 GW of net renewable generating capacity by 2030. In answer to the question, we think this is realistic and it is achievable. We think so for the following three reasons. One. It represents between 1%-4% of total global capacity that we see being developed over this period across the scenarios that Spencer introduced. Two. Our track record, which Dev will describe in detail. Three. The pipeline we are building.
Now, starting first with the capacity being developed, it is really important to put the 50 GW into context. We expect the market to grow and grow dramatically. In the rapid scenario, it triples in size from around 1,400 GW today to around 4,700 GW by 2030. Even in the business as usual scenario, there is substantial growth with the market more than doubling in size. In terms of pipeline, across solar, biopower, onshore wind, and now offshore wind, we already have a pipeline of projects at different stages of maturity that add up to about 20 GW of capacity. Lightsource BP alone has 16 GW in its pipeline, up from 9.8 GW this time last year and just 1.6 GW in 2018. Of course, we're now entering the offshore wind sector, which is growing faster than any other form of renewable energy.
I'm really excited about the partnership we have agreed to create with Equinor. They are a world-class offshore wind company, and we look forward to growing with them. Let me be clear. We know what happens when volume becomes more important than value, and therefore, we will only pursue opportunities that we believe can generate the disciplined returns we expect and our shareholders expect. That links to the fourth question. Can we deliver the 8%-10% returns from renewables? The answer is very simply, yes. We actually believe we can do better, and these returns could turn out to be conservative. Let me take you through why we have absolute confidence in our plan. It is firstly based on experience, specifically with Lightsource BP. Since we formed the partnership at the start of 2018, Lightsource BP has expanded its presence from 5 to 13 countries.
As I mentioned, it has grown its project pipeline from 1.6 GW to 16, and it has delivered 17 projects since 2018. They typically achieve returns in the 8%-10% range. How do we get to 8%-10% across our renewables portfolio as a whole? First, we know returns start at around 5%-6% on an equity basis in a competitive auction. Second, we believe that through our extensive experience in operations and project management, we can add value through applying our processes. We have track record here. For example, in biofuels, where we have, and more recently through the BP Bunge joint venture, we have increased the efficiency in harvesting by 50% since 2016.
Third, we'll integrate with the rest of BP through trading, where we have a long track record over 30 years of delivering close to a 2% return uplift, through the application of our digital expertise to drive additional performance. By bundling our renewables offer with different forms of energy along with our natural climate solutions and offsets portfolio to give customers what they want, clean, low cost, and firm energy. Fourth, we will use leverage, which is typical in this industry. The combination of these four areas gets us to 8%-10%. Beyond this, we have the choice to optimize the portfolio, to farm down or not, and if we do, that could add a further 1%-2%. Yes, we are confident we can deliver the returns we are targeting. Now the fifth and final question, why BP?
What is our competitive advantage really, especially in this new world? There are four reasons. First, our strong track record in operations and project management. Second, our focus on relationships and partnerships around the world. Third, our approach to digital and how we are using it to drive cost benefits and generate incremental value. Fourth, integration, and specifically our ability to integrate at a global level and across energy vectors. Starting with operations and project management. Today, we are strong in oil and gas, strong in refining, and have demonstrated how many of these technical skills are transferable. We have an exceptional global project management organization. Top quartile in four out of five assessments of projects teams made by the leading analysts for the oil and gas sector, the IPA. We will apply this to low carbon energy and electricity.
We have a track record of improving oil and gas plant and wells reliability over the past five years. In refining, we have delivered two consecutive years of record throughput benefiting from sustained high levels of availability, and we are bringing that focus on operational excellence to our new businesses. In terms of relationships and partnerships, we are privileged to be working with many of the world's best companies. We like to team up with those who have strengths that we don't, and we will continue to do so. In the convenience sector, we are partners with M&S and REWE and Reliance. In EV charging, we're partnering with DiDi in China and now Uber in the U.K. In energy provision, we are partnering with Amazon and have another big corporate partnership to announce this week. Stay tuned. In data science, we're partnering with Palantir and Beyond Limits.
Where we lack capability, such as in solar development, we formed a joint venture in Lightsource BP, and we now have a deep execution capability to prosecute our solar build-out. We bought Chargemaster to do the same in EV charging. The partnership we have agreed to create with Equinor takes us into offshore wind. Now, everyone talks about being good at partnerships, but we genuinely embrace them. We believe in the power of working together, where one plus one makes more than two. What we really like is where partnerships can take you. An example, who would have thought that when we first worked with Reliance in India 10 years ago, that this would result in a compelling partnership in retail with Jio, one of the world's fastest-growing brands, to establish 5,500 service stations by 2025 in one of the great growth markets of the world.
Thirdly, digital. We believe digital is a real source of differentiation for us. It has a central integrating role in enabling value creation across BP. It is an area we have invested in and will continue to, doubling our investment over the coming years. We believe we are creating a track record of success. For example, in our oil and gas business, where we believe we are one of the leading digital oil and gas companies. This is due in large part to the collaboration with Palantir, where we have invested in data platforms, advanced analytics, and data visualization, delivering significant value over the past three years. It is this approach to collaboration and partnerships and our own mindset around innovation, which are key to challenging our thinking, to building capability, and importantly, in enabling us to access new opportunities and new markets. Fourthly, integration.
As we said earlier, customers are demanding integrated solutions that give them firm, cheap, and cleaner energy. Very few companies can do this. We believe we have the skills to integrate these hugely complex ecosystems and give those customers a solution. Energy when they need it, how they need it, and where they need it. That could be electricity for their fleets, their cars, biojet for air travel, or hydrogen for heavy transport. Providing these multi-energy solutions is a lot more complicated than it has been in the past, with complexity creating barriers to entry that only a few companies can overcome. This is where BP can thrive.
As Murray said in August, we love complexity like this, it is why we have elevated our trading function to the leadership table to help enable this, connecting all our businesses and assets and optimizing them at scale, cross-geographies and cross-commodities. Let me finish with a final reason as to why BP. It is something you can't put in a spreadsheet, but in my opinion, it probably matters more than anything else. We have a massive determination to make this work and deliver what we laid out. We need to deliver for our employees, and they want to deliver. For them, executing our new strategy is not just about coming to work to do a job. It's about coming to work to reimagine energy for people and the planet.
BP is a company of people who are motivated by that and who really want to help the world reach net zero and improve people's lives. As well as for our employees, we need to deliver for our shareholders and for society, and we want to, and we will. Let me summarize. If this week is going to be a success, we need to have answered each of those five questions in full and in a way that instills confidence and belief in our plans. These are the people who I hope will do this over the next few days. Tomorrow, you'll hear from Dev, from Carol, from William, and from Emma on our plans for gas, on low carbon energy, for integrating energy systems, for partnering with countries, cities, and industries, and for supporting the revolution in convenience and mobility.
On Wednesday, you'll hear from Gordon on how we will be focusing our resilient hydrocarbon business. David will talk about how we're driving digital and innovation throughout BP. Murray will recap on the financial frame that underpins everything you will have heard through the week. Back in August, Murray, Giulia, and I managed to get together safely for the launch of the strategy. I'm very pleased to say that the full team you saw on that slide are now gathered here in person for BP Week. We will be observing social distancing and all the appropriate protocols, but I have to say, it does feel good to get back together in this way. Later this afternoon, you're going to hear from Kerry about how we're reinventing BP to enable our people to deliver the strategy. Companies don't reimagine energy, people do.
Kerry will talk about why our purpose is so important, how we are evolving our culture, and what we mean by leadership. Now you're about to hear from Giulia about the new sustainability frame that we mentioned in August and which we are now beginning to roll out. We have developed the frame in consultation with many of our stakeholders, including a huge amount of input from people in non-governmental organizations, and I want to thank everyone who has helped and whose help we will continue to need as we build it out. It is informing our decision-making, it underpins the strategy, and it gives us confidence that we are doing the right things in the right way. I appreciate we're asking for a lot of your time, and we'll try to make every minute relevant, useful, and hopefully interesting as well.
I will join you later for today's Q&A session. For now, I'll hand you over to the team, and first of all, to Giulia.
Thank you, Bernard. Good morning, good afternoon, and good evening to everyone. It's a pleasure to be here. My name is Giulia Chierchia, and I am responsible for strategy and sustainability in BP. As Bernard mentioned, in February, we announced our new purpose and net-zero ambition, setting the direction for BP out to 2050. In August, we shared our new strategy and financial frame to enable our transformation from international oil company to integrated energy company. Today, I will introduce our new sustainability frame. Our new frame links our strategy to our purpose, Reimagining energy for people and our planet. It includes our net-zero ambition and aims, as well as the wider approach to environmental and social issues. I plan to cover four areas. First, I will reflect on our track record on sustainability.
Second, I will explain why we feel that now is the time to make our sustainability efforts more strategic and focused. Third, I will share the new frame and update you on our progress on our net-zero aims. Fourth, I will close with how we plan to embed the frame at the core of everything we do in our DNA. What I am presenting today represents a work in progress. Some areas are more advanced than others. This is a journey, and we want to bring you, our stakeholders, along with us. We want to be transparent and share our thinking as we are building and evolving the frame.
Our commitment to sustainability is deeply held, and the frame is built on strong foundations, our values, a focus on safety in everything we do, and a non-negotiable commitment to ethics and compliance in line with our code of conduct. Turning to our track record, let me start by recognizing we have had accidents in the past. Those accidents have shaped BP as it is today. We've worked hard to learn from them and to embed the lessons we have learned. At the same time, we do believe that there is much to be proud of. We have a long history of good environmental and social management. Let me share a few examples. First, in reducing emissions. In 2018, we set ourselves three targets under our previous Reduce, Improve, Create framework. We have delivered.
We targeted 3.5 million tons of Sustainable Emissions Reductions for the period 2016-2025. We met this target six years earlier and are going further. We are on track to have delivered around 4.8 million tons by the end of 2020. We targeted 0.2% methane intensity. In 2019, we delivered a methane intensity of 0.14% under existing reporting protocols. The 10 aims we introduced in February have now replaced our previous framework and targets. They represent another step change in our ambition. Next, in making a difference in societies in which we work. We contribute around the world as an energy provider, an employer, a taxpayer, a supply chain participant, an investor in local communities. In 2019 alone, we generated over $283 billion in economic value.
Our products and services improve the quality of life for millions of people. We work to conduct our activities in ways that provide social benefits and respect human rights, in line with our global human rights policy in place since 2013. We invest in sustainable development projects that align with local needs, and we aim to recruit our workforce nationally and locally. As we deliver our new strategy over time, we see an increasing share of our economic value being generated by our growth businesses. We also have a long history of systematic environmental management. Since 1998, we have implemented a leading environmental management standard, ISO 14001, at our major operating sites. Finally, we contribute to protecting our natural environment. I will describe our latest biodiversity and natural climate solutions efforts in more detail later.
Before I do, let me highlight our involvement with forestry projects that have helped reforest or protect more than 3 million acres to date. We nonetheless believe that the time is now right to progress a more holistic and strategic approach to sustainability. Let me explain why. We have seen how around the world, access to energy is associated with improvements in education, health, and economic growth. We recognize the world is not on a sustainable path. One measure of this is Earth Overshoot Day. This is the day each year when human demand for ecological resources is estimated to exceed what the Earth can regenerate in that year. This year, Earth Overshoot Day was August 22nd, meaning that for each of the following 131 days until the end of the year, humanity will be using more resources than can be renewed in this year.
This is just one measure. But however you measure it, the data shows red lights flashing across the dashboard. On emissions, average global temperatures are estimated to have risen by 1.1 degrees Celsius already compared to the pre-industrial baseline used for the Paris Agreement. On people, while access to energy has increased significantly, one in seven people still lack access to modern electricity. Mental health is a growing concern, with over 10% of people in Europe living with mental health conditions. Over 2/3 of FTSE 250 companies have no ethnic minority representation on their boards. On the environment, 10 million ha of forest were destroyed annually between 2015 and 2019, and only last week, WWF's Living Planet Index reported 1 million species are threatened with extinction over the long term. At the same time, there are reasons for hope. The collective intent to act is growing.
On climate, the EU and 19 countries have now set net zero targets, and 114 cities are committed to a 1.5 degrees aligned climate action plan. On people, although more needs to be done, female representation in senior leadership roles is growing, helped by policy that encourages more reporting on gender balance, with diversity more broadly flagged as a priority area for many organizations. Regarding the environment, we have seen a call to action on biodiversity and an increasing focus on the need for protected areas. We believe that the private sector has an important role to play, and we want to play our part. When done well, sustainability is both the right thing to do and good business. We know we do not have all the answers, but we are listening to the calls from society, from governments, from shareholders, for a greater focus on sustainability from businesses.
Here's what they are telling us.
[Presentation]
Those powerful messages reinforce the need for action across multiple fronts. The need to think about sustainability holistically, encompassing climate and environmental concerns, as well as broader set of issues that impact society, the need for trust and transparency, and the need to follow through on our commitments and aims with timely efforts. We need an approach that informs our thinking and decision-making, responds to changes in the world, puts us in action where we can make the most difference. For BP, that approach is founded on four building block, which together shape our new sustainability frame. First, clear focus areas. We are shifting from driving multiple initiatives to focusing on three areas, net zero, people, and planet. Each of those three areas includes prioritized themes linked to the UN Sustainable Development Goals. A wide-ranging approach to sustainability has broad benefits, but often at a local scale.
We believe we can do more by being focused and setting global priorities to drive our activities around the world. Second, aims and objectives. As we have already done with our net zero ambition, we will set aims and objectives for the other two focus areas, and we will be transparent about our progress against them. These are not yet fully defined, but we will work with care to shape them, and we intend to update you in our next sustainability report. Third, sustainability embedded into our DNA, actively driving it through our operating model, our governance, and our culture. Fourth, external collaborations. We are intensifying the search for partnerships that can help us drive progress, provide skills we may not have, and help us shape the future together. In designing this approach, we have engaged with a wide range of stakeholders. I am extremely grateful to them.
We want to continue to engage with and learn from key experts as we further detail our frame. Let me now move to our three focus areas. Our three focus areas are, get to net zero, become a net zero company by 2050 or sooner, and help the world get to net zero. Improve people's lives. Support a just energy transition, promoting wellbeing for our workforce and communities where we work. Care for our planet. Make a positive difference to the environment where we operate. We have chosen these three areas because together they put our purpose into practice, reimagining energy for people and our planet. They are aligned with and mutually reinforce our strategy. Recognizing that there is only so much that we can do, they concentrate our efforts and our resources where we believe we can make the most difference.
I will now expand on each of the focus areas and highlight some of the ways we are already in action, as well as some of our future plans. In August, we outlined our strategy and the pathways to delivering on our 2050 carbon aims. From the feedback, it was clear that there was interest in more specifics of how we intend to meet our 2025 targets and our 2030 aims. Let me start by reminding you of these. Aim one is to get to net zero for our operational emissions by 2050 or sooner. We communicated a target of 20% reduction in our operational emissions by 2025 and aim for 30%-35% reduction by 2030. Aim 1 covers what are often called Scope 1 and Scope 2 emissions. Scope 1 is the emissions from running our own assets.
Scope 2 is emissions associated with producing the electricity, heat, and cooling that we buy to run our operations. Aim 2 is to get to net zero on an absolute basis across the carbon in our oil and gas production by 2050 or sooner. Here, we target a 20% reduction by 2025 and aim for a 35%-40% reduction by 2030. This is our Scope 3 aim, because it covers the carbon dioxide which is emitted if someone burns the gas we produce or a product made from the oil we produce. Aim 3 is to half the carbon intensity of the products we market by 2050 or sooner. We also set ourselves a 2025 target to reduce our carbon intensity by 5% and an aim to reduce it by at least 15% by 2030.
Aim 3 covers marketing sales of energy products such as fuels, gas, and power, as well as offsets supplied to our customers. It covers the estimated life cycle emissions associated with the production, processing, and transportation of those products, and it also includes the CO2 emitted from the use of fuels and gas. Aim 4 is to install methane measurement at our major oil and gas processing sites by 2023, publish the data, and then drive a 50% reduction in methane intensity in our operations. Methane intensity is the amount of methane emissions from our operated upstream oil and gas assets as a percentage of the total gas that goes to market from those operations. We have been doing a lot of work on this since we announced the aim in February.
As you can see from the slide, we have now also set ourselves a methane intensity target to two decimal places of 0.20% by 2025 using a measurement approach. Gordon Birrell, who leads production and operations, will be providing more details on aims 1 and 4 in a moment. Aim 5 is to increase the proportion of investment we make into our non-oil and gas businesses. As presented on August 4th, we aim to scale our investment in low carbon energy by up to 8-fold by 2025 and 10-fold by 2030 to around $5 billion per year. To deliver on those targets and aims, we will use a portfolio of available levers. Over the next 10 years, we expect the focusing of our hydrocarbons portfolio to be the most significant contributor to delivery of aims 1 and 2, driven by the reduction in exploration and production volumes.
Operational improvements will support the delivery of Aim 1. They also help to reduce the life cycle emissions for the marketed products we produce or refine. We expect our rapidly growing low carbon energy and electricity and next generation mobility solutions to be a material contributor to Aim 3 in the next 10 years. We do expect the absolute level of emissions associated with our marketed products to grow out to 2030, even as the carbon intensity covered by Aim 3 falls. However, over time, and as we transition our product portfolio, we expect the absolute emissions to fall as well. Finally, offsets. As we said in August, natural climate solutions have an important role to play in enabling the world to get to net zero, and we intend to support them.
Offsets will count towards our aims when our businesses use them to meet compliance needs or provide their benefits to customers to help them meet their goals. As we also said in August, we do not intend to rely on offsets to meet our 2030 aims. Instead, we see these offsets helping us to go beyond those aims if we can. These levers are closely aligned with our strategy, and you will hear more on many of these areas over the next two days from Gordon, Dev, Emma, Carol, and David. Before I hand over to Gordon, let me address two questions which we have been asked. The first is, does divesting oil and gas assets which keep producing really make any positive difference? We believe it will. We think of this in two ways, helping the world to decarbonize and decarbonizing BP. First, the world.
These divestments help to fund our investments into our transition activities. We're aiming to increase our low carbon investments to around $5 billion a year by 2030. We believe that this will help increase the world's access to low carbon alternatives and will support the energy transition that the world needs. As Bernard said in February, the whole energy system needs to be transformed. The global emissions that matter for meeting the Paris goals are driven by that system, and that is why low carbon advocacy is so central to our ambition and strategy. Next, decarbonizing BP. These divestments also help to decarbonize BP, moving towards our ambition to be net zero by 2050 or sooner. This reduces our exposure to carbon and allows us to diversify our portfolio, creating a more resilient BP to serve our stakeholders.
The second question we have been asked is: how is your activity in Rosneft consistent with your aims? As we said in August, Rosneft is an important strategic partner. We seek to work with them, including through our positions on the board. We recognize and support their significant efforts and achievements in managing their emissions. They are targeting a top quartile operational emissions performance, which in turn supports their resilience. Now, I have asked Gordon to join me to take you through our plans on aim one and four in more detail.
Thank you, Giulia. Starting with Aim 1, we will continue to focus our emissions reductions in our assets as a core priority for our production and operations business. We continue to make progress by operating our facilities more efficiently to reduce energy usage, lower flaring, and reduce methane emissions. As Giulia mentioned, on top of the 3.9 million tons of sustainable emissions reductions, or SERs as we call them, we delivered through 2019, we are on track to deliver about 0.9 million tons of SERs in 2020 through operational improvements in areas such as energy efficiency and flare optimization. We have so far approved funding for over 30 projects from our operations from our $100 million Low Carbon Fund, which will deliver future SERs. This includes recent approval of a project at our Lingen refinery, for example, developing an option for green hydrogen supply.
As Dev will explain, we will be increasing our focus on these integration solutions using our low carbon growth areas to benefit aim one. We're also exploring options for electrification of our existing facilities such as ETAP in the North Sea, and making our new major projects lower carbon by design, such as our Cypre project in Trinidad and Tobago, which is designed to emit approximately one-sixth of the emissions of previous installations. Let me now turn to aim four, which focuses on methane. Methane has a much higher global warming potential than carbon dioxide, so tackling methane emissions can play an important role in meeting the Paris goals. The science of methane and climate is complex, and we benefited hugely from the expertise of Princeton University through our long-standing partnership in the Carbon Mitigation Initiative.
Current protocols for reporting methane emissions rely mostly on estimation and calculation rather than actual detection and measurement. It is therefore understandable when NGOs like the Environmental Defense Fund, or EDF, raise questions about data quality. We recognize the importance of such concerns. Aim 4 seeks to respond to these challenges by shifting from the current protocols towards greater use of measurement. We've been doing a lot of work on this since we set out our aim in February. First, we've systematically reviewed our methane inventory, and we have decided to apply Aim 4 to all operated upstream oil and gas sites which contribute towards our reported methane intensity. Methane emissions from these Aim 4 sites contribute to around 98% of our reported methane emissions. It is worth pointing out that the other 2% from operations such as refineries are covered by Aim 1.
We have developed a new measurement approach to implement Aim 4. We aim to have this in place at all relevant sites by 2023. We plan to publish this data, which will help us baseline our aim to halve our methane intensity. Our measurement approach includes deploying continuous detection and quantification technologies, we will test these. We are learning which of them will work best for our assets. Importantly, our measurement approach also includes using technologies such as drones and satellite-based measurement to help validate our estimated or calculated emissions data. We plan to deploy the right elements of our measurement approach for each site. More information regarding our measurement approach can be found on bp.com. Aim 4 under our new measurement approach represents a significant step forward.
They shift our focus from the estimation and calculation on which current protocols largely depend to a much greater focus on measurement. Third, as Giulia mentioned, we are announcing today that we're targeting 0.20% methane intensity by 2025, as determined by our new measurement approach. This is an important supplement to our Aim 4 because the 0.2% methane intensity target, which we have had until now, and the 0.14% we reported for 2019 have both been based on current protocols. We are already in action detecting, monitoring, and improving our measurement of methane emissions and working to reduce them. We continue to collaborate with a range of stakeholders, such as EDF and the Oil & Gas Climate Initiative, and to work under the Methane Guiding Principles. Our newly established non-operating joint venture Center of Excellence will support our efforts to influence methane management in our non-operated activities.
We have also been an active participant in contributing to the Oil & Gas Methane Partnership, or OGMP Version 2, which is all about enhancing reporting on methane emissions reductions. I'm delighted to say that this month we've signed up to this. Finally, we're advocating for robust methane policies. We support the use of OGMP Version 2 to inform EU policies on performance standards for natural gas. We have made clear our opposition to rollback of federal methane regulation in the U.S. I hope you will agree we have made tremendous progress, but we have so much more to do. Thank you. Now back to you, Giulia.
Thanks, Gordon. Our first five aims are to help BP to get to net zero. Our second five aims focus on helping the world get to net zero. We see these as vital, because ultimately what matters is the world achieving the Paris goals. We are already in action, and a lot has happened since February 12th. Under aim six, more active advocacy for policies that support net zero. We have been supportive of green recovery packages aiming to build back better, including the European Green Deal. We shut down our corporate reputation advertising as we said we would, and we intend to continue actively advocating for policies that support net zero. Under aim seven, incentivizing our employees. We have already designed our annual cash bonus for our employees in a way that gives the balanced score based on safety, environment, reliability, and financial measures.
We intend to increase our emphasis on strategy delivery, including low carbon emissions reductions for our BP Leadership Team going forward. Kerry will talk more about aligning employees' performance and rewards in the next session. Under aim eight, set new expectations for relationships with trade associations. We published a review of our most relevant associations earlier this year, and as a result of misalignment over climate change, we decided to leave three associations. We continue to engage with trade bodies on climate issues and actively monitor our memberships. We will continue to make our case on climate policies within associations and be transparent where we differ. Under aim nine, to be recognized as the leader for transparency of reporting. We have set out our strategy with clear and granular 2025 targets and 2030 aims, providing transparency on our intended trajectory over the next 10 years.
We have work ongoing to enhance our reporting in line with the Task Force on Climate-related Financial Disclosures recommendations, which we support. This includes our intention to build in detail in our next annual report on our use of our Energy Outlook scenarios to inform our strategy, including the short and medium-term targets and aims. Finally, under aim 10, clean cities and corporates. Our new regions, cities, and solutions teams have moved incredibly quickly since being stood up. They have already announced we are working in partnership with the cities of Houston and Aberdeen. You'll hear more on this from William tomorrow. There is plenty more to come under each of those aims, and we will continue to provide updates as we progress. Let me now turn to our focus on improving people's lives where we work and supporting a just energy transition. We have three priorities.
First, provide more clean energy for more people, because access to energy is essential for economic growth, reducing poverty, and improving communities' health and wellbeing. One in seven people still lack access to modern electricity. Second, respect human rights, promote equality and sustainable livelihoods, because we believe that everyone deserves to be treated with fairness, respect, and dignity. That is not a reality for many people around the world. Third, promote wellbeing with a focus on mental and physical health. Care for physical and mental wellbeing has always been a priority for BP. The COVID-19 crisis has posed a new and serious challenge. How are we planning to put these into action? Starting with providing more clean energy for more people. This is core to our new strategy.
Dev and others will take you through more details over the next few days, as a reminder, we plan to rapidly increase our low carbon energy portfolio. That includes aiming to have developed 50 GW of renewables by 2030. When operational, we estimate it would be enough to power the equivalent of 31 million U.K. homes. Our sustainability frame is also about how our businesses do what they do, their approach to environmental and wider social issues. It's about living our purpose so that people can know that our great businesses in areas like energy and mobility, such as BP Chargemaster or Castrol, stand for positive change. Moving on to respecting human rights and promoting equality and sustainable livelihoods. On equality, we have just launched a new diversity framework in the U.S. and the U.K.
Kerry will describe in the next session what we are doing to make BP a more inclusive workplace where everyone can thrive. We will aim to promote sustainable livelihoods through a range of initiatives, and we will focus on driving our updated human rights policy into action, which I'll come back to in a few moments. On wellbeing, with a focus on mental and physical health, we are working to tackle the stigma around mental health issues within BP, particularly as we learn more about the impact of COVID-19. We are proud to support mental health charity Mind in the U.K. as they provide help to people in this difficult time. We're looking at other potential collaborations, including the British Academy of Management, to increase the focus on mental health and wellbeing in the training of future leaders.
Kerry will talk further about some of the transformational plans we have for how we approach these vital issues within our organization and beyond. Coming back to human rights, I want to highlight our updated Human Rights Policy that we launched this summer. It clarifies our commitment and strengthens our approach across several areas, including the right of workers and vulnerable individuals and groups, including Indigenous Peoples, and rights to water and sanitation, land rights, and freedom of expression. Importantly, the new policy still has global scope and reach. It applies to all our employees and includes respect for the human rights of the communities where we work around the world. It also sets clear expectations for our engagement with our suppliers and other business partners, including our contractors, in line with the principles of our policy.
These expectations are supported by prioritized human rights due diligence assessments that inform purchasing decisions. We are determined to get more systematic in our activities. We've developed labor rights and modern slavery principles for our operations that we will use with our business partners and supply chains. We've also co-founded with peers a joint industry platform to drive a more consistent, effective, and efficient industry approach to supplier human rights due diligence, with a focus on labor rights and modern slavery. We plan to undertake independent third-party assessments for selected sites and business activities on a risk-prioritized basis to review our progress and course correct as needed. The third dimension of our framework is the environment, caring for our planet. We have three priorities. First, promote cleaner environments, enhance biodiversity, and promote natural climate solution.
The continued decline in biodiversity and the degradation of our environment poses a serious risk to the natural resources upon which we all depend, and it is reducing the ability of ecosystem to take carbon out of the atmosphere, making it harder to tackle climate change. Next, use resources responsibly. As we saw earlier, material consumption has been growing with 86 billion tons consumed globally in 2017. Given this, we consider reducing consumption and embracing circularity to be an important lever in sustainability. We are looking at ways to adopt circularity principles across BP, reducing waste and keeping materials in use for longer. Finally, promote sustainability in our supply chain and promote sustainability with our business partners. Given the scale of our global supply chain, we're on track to spend $28 billion on third-party goods and services this year across tens of thousands of suppliers.
We see it as an important lever for driving performance, including reducing carbon emissions. We believe this can create shared value along the supply chain by increasing efficiency, reducing resource costs, and making supply chains more resilient. How are we planning to put these into action? I will dive into how we're in action on promoting cleaner environments, enhancing biodiversity, and promoting natural climate solutions in a moment. For responsible usage of resources, we are starting to identify circular opportunities across BP. For example, in Europe, we aim by 2025 for BP-owned food brands, including our Wild Bean coffee cups, to use packaging that is either reusable, recyclable, or biodegradable. In promoting sustainability into our supply chain and with our business partners, we will need to prioritize our efforts, focusing mainly on the most significant contractors and suppliers and on the areas of most significance to each of them.
Areas such as carbon emissions and usage of renewable energy, circularity provisions including waste reduction or elimination, and natural resource management, including water consumption and sustainable sourcing of materials. Specifically, I want to highlight our new strengthened position on biodiversity that we released in June. For 14 years now, we have not entered into any of the most sensitive protected areas for oil and gas exploration and production. With our new position, we have now formalized it into a commitment. This covers UNESCO World Heritage sites and also strict nature reserves and wilderness areas as defined by the International Union for Conservation of Nature, the IUCN. Our position also states the following aims. First, to achieve a net positive impact on biodiversity in our new projects. This starts with looking ahead to identify direct impacts on biodiversity.
We deliver a plan not just to mitigate potentially significant impacts, but to enhance biodiversity. Second, to enhance biodiversity around our existing major operating sites. Finally, to support biodiversity restoration and the sustainable use of natural resources. I want to thank Fauna & Flora International, Conservation International, UNESCO, the IUCN, and other nature organizations, experts, and investors for their valuable input and challenge through the development of our new position. Implementing this position will take a lot of work, including on our methodology for measuring net positive impact. I am pleased to announce that we have now established a new collaborative partnership with Fauna & Flora International to help us deliver our new position. We will also be jointly exploring new opportunities where BP can support nature conservation. I also want to say a little more about natural climate solutions, or NCS.
At its simplest, NCS is about protecting, restoring, and in some cases, creating natural sinks. These natural sinks, which include peatlands and forests, both lock in carbon, keeping it out of the atmosphere, and absorb CO2 from the atmosphere. We believe that NCS will be needed for the world to deliver net zero. They play a critical role in many Paris Scenarios. Specifically, up to 500 million hectares need to be converted to forests by 2100 in line with IPCC scenarios. When done in the right way, NCS can bring a range of sustainability co-benefits, such as enhancing biodiversity and sustainable livelihoods for local communities. We believe that BP is well-placed to help enable NCS to play this role. We have a track record and the capability. We have supported over 50 million tons of forestry offsets in the U.S.
We are active in NCS in more than 10 countries around the world. We are building integrated partnerships, such as in our Finite Carbon venture, which David will discuss later. We will support this market to grow. We have established a world-class NCS group within Trading & Shipping. We will be scaling positions. We will promote high standards as we build new business models to meet growing demand for NCS from our customers. We are advocating for policy to help build the markets for offsets that will be required to underpin their role. This includes engaging with our global partners such as the World Economic Forum, World Business Council for Sustainable Development, and others in helping to find technical and policy solutions. Let me close by returning to our frame. It focuses on three areas. It puts sustainability at the heart of what we do.
We will set aims and objectives for our focus areas on people and planet, as we have done with net zero. We see these as a key vehicle for performance management and a clear basis for transparency and for delivery. On governance, we aim to embed sustainability into our DNA as we reinvent the company. This means integrating sustainability in the way we work and into our decision-making on strategy and capital allocation, business development, and execution. Finally, we are looking for partnerships to help drive progress and help us shape the future together. We will also work with our customers, suppliers, partners, and other stakeholders to drive innovation and broaden our impact. We see this as a living frame, one that will evolve over time as we learn and respond to changes in our business and the world. Let me leave you with our key messages.
As I have outlined, we have a track record on sustainability. Now is the time to enhance our approach. Our new sustainability frame with three focus areas puts sustainability at the heart of what we do. We want to keep engaging and listening as we detail our frame and our aims and objectives. As well as continuing to share our progress on sustainability as we move forward. I look forward to providing another update on our sustainability frame at the end of Q1 2021, when we plan to publish our annual sustainability report. In the meantime, I look forward to talking with many of you watching today and to continue listening and learning. Now, I'll hand over to Kerry Dryburgh, who leads people and culture, to talk about how we're reinventing BP. Thank you.
[Presentation]
The conversations we had with these young adults give us a snapshot of what the next generation wants from work. Hi, everyone. I'm Kerry. This reminds me of a conversation I had recently with my 20-year-old daughter, India. India is in university in Edinburgh. She's been applying for part-time casual work to help get her through her studies, and as she was considering opportunities, it became clear to me that she was looking for more than just some money to help her through. India was judging these opportunities not on what they paid, but on whether the organization would make her feel good about coming to work and have a culture that she could identify with. India and the people in that video are representative of an entire generation, and also to many people already in work.
They want to work for an organization that makes a difference, a place that supports, encourages, and empowers them, where they can work alongside inspiring colleagues in innovative and exciting work environments. I know that many of our colleagues in BP today are asking for very similar things. The question for BP in a world where people have more choice than ever is: Can we give them what they want? You might be unsurprised to hear that. Undoubtedly, I believe the answer is yes
I believe we're already offering many of the things they look for. I'm determined to ensure we continue to do more for our people, both for those already in BP and those that will join us over the years ahead. Let's be honest, right now, we have a problem with our image. Many people don't think of BP as an exciting, welcoming, or inspiring place to work. You even heard one person say that they're not sure the energy industry is the right place for them. Let's not kid ourselves. We've got a bit of a challenge. To deliver on our strategy, we have to ensure we're doing everything we can to attract and retain the best people.
As the person responsible for people and culture, I want to talk about how our people are key to delivering our strategy and reinventing BP, and what we're doing to help them perform at their best. To ensure we have the right people and capabilities, we must change. We will build on the strong foundations and deep expertise we already have, as well as accessing what we need for the future. We will unlock the human energy that exists within BP through our purpose, as you just heard from Giulia, guiding us forward, changing how we work to enable our people to be their best, and our leadership driving change. Ultimately, our success will be judged by our performance. Have we delivered on our purpose and ambition? Let me start by talking about where we are today.
In my 10 years working for BP, I've met and had the privilege to develop some amazing talent. We have deep technical expertise with more than 16,000 engineers and operators, just under 9,000 biofuels experts, and that's just scratching the surface. We have skills that allow us to achieve extraordinary things, extracting oil and gas from seemingly impenetrable rocks in the U.S., or delivering lubricants that can work under the most extreme conditions, including the outer reaches of space. Our experience in delivering large, complex projects means we can supply energy to the people who need it most. Whether that's the vast modernization of our Whiting Refinery or delivering technically challenging projects like Shah Deniz Two.
Our long experience and strong global relationships mean we are able to navigate ever-shifting energy markets, from working with Reliance in India to create the Jio-bp retail network, to developing transport solutions with DiDi in China. Our increasingly diverse teams mean we're able to draw on a range of talents better reflecting the societies we serve. Our amazing people will be as valuable tomorrow as they are today. The likes of Emeka Emembolu, who's leading our business in the North Sea. He has more than 20 years' experience in oil and gas and will be continuing to do what he does best for many years to come. We're also able to take skills from our existing businesses and use them in a reinvented BP. Skills like project management, finance, or trading. Other people have skills in one field that are directly applicable in another. Take Louise Jacobsen Plutt.
Louise has a deep experience in wells, but now she's applying what she's learned to head up our hydrogen business, something of great importance to us. Of course, while we have many skills within BP, we don't have everything we need to deliver on our strategy. Where that's the case, we are already finding ways to get them. This involves reskilling our own people and unleashing their potential in a new direction. People like Mukta Tandon, who has a strong background in marketing and communications, and now leads Castrol's global digital team. Hiring fresh and different talent from beyond our industry, and that's why we hired Fran Bell, who was working at the Toyota Research Institute, and before that, Uber. Fran will bring her exceptional skills to our data science team.
Our ability to nurture the rich talent that already exists within BP, as well as bringing in new capabilities, is central to reinventing BP. We know that building capability is something that any of our competitors can do. What I believe will make us distinctive is actually what guides us, how it feels to work here, and how we lead. Let me explain what I mean. First of all, purpose. For more than a century, people at BP have been coming to work to help solve some of the world's greatest energy challenges. Our new purpose is inspiring our work like never before. It resonates with people, both those inside the company and the communities we serve. For those of us in BP, our purpose is what makes what we do more than just a job.
It brings meaning and makes us proud to work here. Our new purpose is making people outside of BP want to work with us in a way that they didn't before. It will guide us in all we do. For example, in 2019, we committed over $80 million to social investment, of which more than $25 million specifically targets education and employment. I look forward to sharing more soon on how we're going to refocus this work to our new ambition. For now, we're expanding our sponsorship with the global educational NGO, AFS Intercultural Programs, and through a new partnership with The Prince's Trust, we're aiming to expand the reach of our apprentice and internship programs. What's also exciting about being in BP at the moment is you can really see our people living our purpose. COVID-19 provides a great illustration where our teams sprang into action.
We offered free fuel to emergency services in nine countries and PPE equipment in the U.S., U.K., and Australia. We donated high-performance computing power to support healthcare researchers. Then there are dozens of individual stories. People like Ricky Burns, a team lead in Houston, who used a 3D printer to make personal protective equipment. Amazing examples like that are helping change impressions of BP, as well as enabling us to bring in the best talent. At the two key results and launch of our strategy, Bernard talked about Jo Alexander returning to BP. I also have an example from my own team. Sarah Odell used to work with me. She felt BP wasn't the place for her to make longer-term career. She decided to leave, spending time in finance, then healthcare. Fortunately, I stayed in touch with Sarah. Then we announced our new purpose.
She thought maybe BP was a place she could lead a fulfilling career after all. Well, I'm delighted to say that Sarah is rejoining BP to help us transform how we work. That's the power of purpose. It can win over critics, attract the best people, and provide great inspiration. We're building the right capabilities. We have a purpose to guide us. Now we need to shift how it feels to work here. To do this, we believe we need to be three things. The first is integrated. This plays into many areas. In summary, we are integrating across and along the energy value chain. Structurally, BP has moved away from the siloed upstream/downstream model to create an integrated and focused BP. Later this week, you'll hear from William and Carol, who, in addition to Giulia, lead entities that will help us do just that.
This will happen within a leaner and more focused organization, which, as you know, will see us reducing our workforce by around 10,000, the majority of which will leave BP this year. We're extremely sad to see our friends and colleagues leave and have spent a lot of time on how we can do more than we normally do to support them, including creating a new transition offer, My Future. We're on track to stand up the new structure on the 1st of January next year. With almost all the design work complete, we've appointed 730 leaders to new roles. The second is becoming more agile. This means deploying cross-disciplinary teams and empowering them to solve problems and seek opportunities. In the last two and a half years, we've successfully run almost 800 agile projects across five continents. Now we look to roll that out much more widely.
In fact, my own people and culture team will itself operate in a fully agile way. Third is being increasingly diverse and inclusive. We will continue to operate as one global workforce with everyone playing a role, but we need to progress the D&I agenda further. When it comes to gender equality, nearly 40% of the 730 newly appointed leaders are women. Our goal is to continue to increase this proportion and exceed at lower levels. In racial diversity, we want to do more. In the wake of recent racial injustices and subsequent social unrest, we've created a new framework for action in the U.K. and the U.S., with more to come globally. It focuses on transparency, accountability, and increasing African American and minority representation.
We're doing this not just because it is the right thing to do or because it makes good business sense, but because we believe companies like ours should help drive forward social progress. We will continue to make further steps along this road under the leadership of Mark Crawford, recently appointed as our new SVP of Diversity and Inclusion. Being integrated, agile, and inclusive will shape our people's experience of working at BP. An experience also enabled by two very important activities. The first is transforming our working environments, not just places where people feel they can speak up, but also places where people know they can be themselves and feel supported. The second is prioritizing our people's wellbeing. This is something I know Bernard is really passionate about and is aligned with our new sustainability frame.
We're offering our people access to a range of facilities and services, such as the Headspace meditation app or support through the employee assistance program. We will go further. Our donation to the mental health charity Mind is a testament to that. Wellbeing is becoming part of the BP language, just in the way process safety is. It is a critical part of caring for our people and the communities in which we operate. The point of all of this is to say that we really care for our people and want them to be at their best. Let me move on to the third element, leadership. There are two parts to this. First, being clear on what we now expect from our leaders, and second, refreshing the profile of our leadership team. Let me start with the qualities we looked for.
We searched for leaders who have a track record of delivery, who are curious and open-minded, who are purpose-driven, not ego-driven, who lead through our values, especially safety, and most importantly, leaders who are empathetic, but who are also prepared to hold others to account. Now, let me tell you about the group of leaders we selected. First, we have removed an entire layer of management at the top of the company, halving the number of senior leaders from over 240 to under 120, connecting our leaders more closely with their teams. This 120-strong new extended leadership team, or ELT as we call them, are brilliant role models of the qualities I mentioned. They also bring together a broad and diverse set of expertise, views, and perspectives.
37% are women, 28% are ethnically diverse, and around a third are new senior leaders, promising individuals who might otherwise have waited longer before joining the ELT. Individuals like Nicola Buck, who's held several brand and marketing roles, whose leadership qualities are clear for all to see. 60% have experience working in companies outside of BP, including three new external hires. People like Ben Gaunt, who joins us from Accenture and brings cross-industry experience as our new head of talent. We're extremely proud of our leadership group, as Bernard has made clear to them on the first day of their onboarding process, we expect a lot, we will hold them to account. In all of this, the real test of whether we have succeeded or not is our performance. Have we delivered on our purpose and ambition?
Leadership will play a role, of course, but we're also changing how we enable individuals to deliver performance. We're evolving to a model of continuous planning and open, transparent, and real-time feedback so everyone will know what is expected of them and how they are performing. We're also better aligning remuneration to performance. There are three things we've done. Firstly, the metrics for the 2020 annual cash bonus for the wider workforce are tied to a balanced scorecard consisting of safety, environment, including Sustainable Emissions Reductions, reliability, and financial measures. Secondly, our 274 most senior leaders will see at least 30% of their equity award linked to low-carbon measures in support of our strategy. That's up from 5% in the 2018 to 2020 plan. Finally, BP's leadership team will see 25% of their total performance-related pay now linked to emissions reduction and delivery of the low-carbon strategy.
I hope this demonstrates our intent to incentivize performance while we transform. I realize there's a lot to take in here, but I hope that gives you a sense of what we're doing. It's a combination of capabilities, purpose, how we work, leadership, and performance. Getting that recipe right is the key to success, and I believe it is also what will make BP unique. We have a lot of work to do, but I'm optimistic about our future, delivering on the hopes and expectations set out in that video you saw at the start, feelings that are shared by many of my colleagues at BP. In fact, it is because of our people that I remain so optimistic.
Because they care for each other, for society, and for their communities. It is because our people care that I'm so confident BP will contribute to a just transition, both for our teams and for the communities where we operate. This isn't some abstract idea. It's real. It's human. I could point to many examples, but the most poignant for me was when I made my first visit to Tangguh, our gas business in Indonesia. It seems like a world away from London, a 36-hour journey involving four planes and a boat. Since day one, BP has invested in the local community, providing education, healthcare, and jobs, developing really close ties with the people there. On my trip, I had the privilege to meet some of the over 100 apprentices we are developing, about half of which are women.
Hearing their stories, learning about their journeys, understanding how their BP relationship was transformative for them and their families, was genuinely life-changing for me. It was living proof of how BP can have such a positive influence on the world and the communities we operate in. After all, BP itself is a community. A community made of great people who want to make a difference and care in a way that some other companies may not. If we think back to where we started, India, my daughter, found a job teaching math to school kids, but more importantly, working for an engaging leader in an inclusive environment that makes her feel valued. And those young people we saw in the video talking about what matters to them, about making a difference to the world, I firmly believe that BP is the place for them. They are BP people.
They just don't know it yet. We'll now take a short break, and then I'll be joining Bernard, Giulia, and Murray to take questions from you on what you've heard today. Thank you.
Well, hi everyone, welcome back. Thanks for being with us. I think we had about, I don't know, I was told 12,000 people. They always tell me a few more people than we have, hopefully we had about 12,000 people. Hopefully we have many of you still online. Thanks for being with us for the afternoon. I always learn something. I hope you learned something listening to the team, it's now your turn to ask some questions. There's been tons and tons of hundreds of questions come in, they're coming up in front of us here. The team's been trying to sort through them. I think we'll just get going. I've got Murray and I've got Kerry and I've got Giulia, obviously. The first question is from Singapore.
It's from Alan Chan, and Alan asks, "How does BP leverage scenario planning in setting its new strategy, and does BP now assume a base case that is aligned or more aligned with achieving the Paris Agreement goals?" Giulia, you're probably the best person to answer that.
Thank you, Bernard. Thank you, Alan, for the question. It's a great question. As Spencer said, we've laid out earlier today four critical scenarios, and we don't believe any of those scenarios to be the correct scenario within the frame of a multitude of potential outcomes. These scenarios help us to identify, if you wish, a possible set of outcomes and identify six core beliefs, which we presented in August, and that we think hold true across scenarios. Our strategy is built on those core beliefs, and therefore is a strategy that allows us to be resilient across scenarios.
To the question, no, we do not assume a base case, but we believe our strategy is indeed consistent with Paris because it builds on our 10 aims, and we believe that those 10 aims together sets us on a path which is consistent with Paris because it advances us towards decarbonization. It basically sets us in a world which is resilient to a price environment, which is consistent with Paris. Thirdly, it contributes to the world getting to net zero through aims five to 10.
Great. We're all in, I think.
Yep
We're resilient to business as usual, but we are very much all in to the transition and into Paris. I'd love to be an economist, I think, when I come back the next time. Spencer lays out four scenarios, and then he says, "They're all wrong." I never got away with that in school, but maybe next time around, Murray, that might be our next career choice. That's it. Yep. Oswald Clint. Os. Very nice to hear from you. Os is an analyst, a renowned analyst, I would say, with Bernstein here in London. Os' question is that 74% of business transformations fail, and that's a McKinsey statistic. As we have talked about reimagining and reinventing BP, does the BP plan have the elements needed to land in 26% of the success business transformation cases? Of course, Giulia joined us from McKinsey.
Giulia, you may have a thought on that and maybe anyone else who wants to add as well.
Yes, thank you, Oswald. It's actually a pleasure to now be trying to implement those success factors to get into that 26% versus actually advising companies as to how to do it. It's true. The statistic is true. What we see is that you need to have three critical elements to actually get into that 26%. The first one is clear objectives to set the path and the direction you're moving into. I think we've laid out our 2025 targets, we've laid out our 2030 aims, and we clearly have an ambition as to where we're heading to. The second dimension is very much around all, if you wish, the soft elements. Leadership role modeling, culture, organizational transformation, and Kerry will talk to that in a second.
I would invite you, Kerry, to actually comment on that because you're much more of an expert than I am on that one. The third element for a successful transformation is what we used to call in my previous life, relentless execution. Literally having a machine that tracks and drive execution towards those objectives. Again, I think we're pretty much set in having that machine and that drive. Kerry, anything to say on the cultural elements?
Yeah. Thanks, Giulia. I would just add, the way I think about it is the difference between the what and the how. When I was talking earlier, I talked about the capabilities that we're building for the future, but that not necessarily being the secret to what I believe our success will be. For me, it's really down to that right environment and leadership ultimately. The way I think about it, and we're thinking about it, is creating the right conditions, whether that's integration, agility, diversity. Fundamentally, it's about our people and our leaders really living that change and also being focused on our purpose and ambition, which I think will guide us in everything we do. For me, it's about creating that right environment and our leadership that will enable that right throughout the organization.
I think just adding a little bit to that, you talked about setting direction, Giulia, and somebody said to me recently, they said, "Well, nobody can be under any illusion about whether you're going to try and change BP." I do think that is very much there. The other thing, Oswald, I think for me is that I think there is I don't know about the 74% that failed necessarily, but I do think there's something about there's this unique combination of having to change and wanting to change. I think that has come together in BP in a very powerful way. I think we recognize the challenges that are out there. We recognize the issues that are going on in the world, and therefore, we feel a certain sense of having to change.
At the same time, we really want to change, and I can assure you that we intend to be in that 26% category. We've talked a lot about execution was your third point, and there's a theme inside the company at the moment, and you'll hopefully see it a little bit during the week, which is there's been a lot of excitement in the last several months about what we're doing and so on and so forth. A lot of questions, obviously, but a lot of excitement. I think the theme now, Os, is we need to move from excitement to execution, and it is now about executing that plan, and that's what we will do. Thanks for the question. The next question is from Rashmi Murthy.
Rashmi, you ask, "What are your top people priorities in the post-COVID-19 world?" Kerry, maybe you're the best person as our Head of People and Culture, to take Rashmi's question.
Brilliant. Thanks, Rashmi. Certainly, the COVID-19 experience that we are all still living every single day actually brings our people priorities more than anything to the fore. For us, clearly reinventing BP is the biggest transformation our company has undertaken in the last 100 years of our existence. Number one priority really has to be making sure that we complete that well and that we recognize the anxiety that that also places on our people as we go through this huge sense of change. Executing that well and minimizing anxiety and really making sure that we are as respectful to our people through that process as we can be is really kind of number one for me. I would relate to that also our focus on safety, which needs to continue as you would expect, but also the well-being of our people.
Through this change, being really mindful of people's well-being and just looking out for each other is really critical to us, too. Finally, I'd really just add post-COVID, as we think about a new normal, how do we think about returning to the office for those who are office-based, and how do we think about getting back to operations as we know it? Yet we know that the world will never be the same again. We have to really take what we can to learn from that experience, whether that's flexibility, whether it's how people come to work or indeed just how we all work and collaborate together in the future. For me, it's really learning from that and making sure that we don't lose the benefits as we go forward as well.
That's great, Kerry. I think to Rashmi's question, I think in full transparency, I talk about a lot of excitement inside the company. Equally, there is a lot of angst, and there's angst probably inside of every company in the world. You put that, you've got COVID, we've got people's personal lives being impacted by COVID. We've got a transformational change going on. We've announced layoffs of up to 10,000 people. You have people wondering if they're going to have a job or not, people being selected in, people leaving every day. Great people are leaving the company. It is a difficult time inside the company, and at the same time, we're doing a lot of things that are exciting, and we have to manage this message carefully, because on the one hand, you don't want to appear to be tone-deaf, i.e. not really understanding.
We talk about empathy in Kerry's presentation. Do we understand what's happening? At the same time, we have to give the many people who are staying a sense of hope and ambition for the future. Thanks for your question. The next question is from Nico Dorsima, and Nico is in Canada. Nico, thank you so much for joining and for being interested. "Changing the strategy and makeup of a large organization requires a culture change. How do the executive team plan to implement culture change and ensure sustainable culture change happens quickly enough in the next few years?" Kerry, again, the head of people and culture, you got some thoughts on that?
Well, I have. I talked about some of these earlier. I think there are a few things here for me. First of all, it's about creating the right environment. We've started that with the work that we're doing to reinvent the company. Whether that's creating a new integrated one BP, whether it's being more agile or our focus on diversity and inclusion. It's all of these things that come, in my mind, to make the environment that will enable our people to be the best that they can possibly be. I think if I take your question, Nico, and think about what's really behind it, the question you're asking me is, how is that going to be successful, and how are you going to sustain that change? Again, I would just go back to, we have selected a leadership cadre to lead our company.
We have now selected over 700 people as we go into this restructuring. More to come. Those people will lead us, and a lot of the qualities that we selected were that those people could lead us through this change. That's a foundation for me, and I think it's incumbent on all of the leaders in our company, as well as everyone, to make sure that we are holding ourselves to account around this. Are we giving each other feedback? Are we highlighting what's working really well, what's not, and really making sure that we bring that how to life? It's not easy. Culture change never is. We all know going through a change process is difficult.
I think the question for me is, how do we make sure that we work with each other in service of the new ambition to make sure we bring that alive through feedback, through focus, and ultimately, through just the leadership acts that we all live on a day-to-day basis.
We're trying to make things a lot more real. We talk a lot about authenticity, and we talk about sharing our vulnerabilities and just trying to make our time at work a bit more like real life, as opposed to some place that you come, and you have to walk in the door and somehow suddenly be tough, know all the answers to everything, be at your desk, that sort of thing. Which when, of course, we all know that life is very messy and a no more messy than ever than right now. We're just trying to, as Kerry said, select leaders and lead in a way ourselves. Life is difficult.
People have issues. We help each other through things. We talk about things. I know it sounds quite soft in a way, but actually, this is at the essence of culture change. I did a LinkedIn post a couple of weeks ago on the power of "I don't know," and we were all brought up that the leader knows the answers when the amount of pressure that puts on an individual, the way it can lead organizations in the wrong place. There's tons of things I don't know. There's tons of mistakes I might make. We're trying to lead in a way that is, we hope-
a bit more real.
I'm selecting leaders that do that. Thanks for the question, Nico. It's a great one. The next question is from Jess Worth in the U.K. A question for Bernard. "It's great to see the ambition of 40% production cuts, but can you say a bit more about why you haven't included your production from your Rosneft stake in this?" It is a great question, Jess, and I appreciate it. The simple answer is we don't control Rosneft. We own 20% of Rosneft. That's 20%. We don't control the company, and therefore, that is why we have chosen not to report its production in terms of what we would do on the 40%. The rest of the production, we have great influence over and we have great control over. It's something that we don't control.
We obviously have influence in Rosneft. If we talk about their environmental performance, which I think people always ask about Rosneft, and somehow you think they're asking as if Rosneft somehow doesn't care about their environmental performance. The Russian people care about their environment every bit as much as people in the West. If you look at some of the numbers for Rosneft over the past couple of years, they're absolutely fantastic. Methane emissions down, I think, 18% year- on- year. Fugitive emissions down 74%. Greenhouse gas intensity per barrel of oil and gas produced, which is actually better than many of the super majors, BP included. They have a Carbon Action Plan. They have reached out to us for help. We've seconded somebody in to be their climate advisor. This is a company that cares, wants help.
We don't have all the answers. We have experience, of course. Together, we help them do that. I think they're doing a great job. There's always more to do, just like there is in BP. We don't account for it in the production cut because we don't control the company. Thanks for the question, Jess. Murray, it's your turn.
Right.
This is from Brian Stainrod here in the U.K. How is BP going to move from oil to green energy and keep the shareholders on board, Murray?
Great. Thanks. Good afternoon, everybody, thanks, Brian, for the question. I'd go back to August 4th, where we laid out an investor proposition that really had three parts. Committed distributions, profitable growth, and sustainable value. Our sense was we were trying to find a sweet spot with investors where diverging viewpoints exist across the investment community. Some want cash through a dividend, some want growth, whether that's in earnings or returns, and some want us to transition. That's what we tried to lay out inside our investor proposition with really six key parts. One's a resilient dividend. That is the first priority on cash.
Where we do have excess cash flow, we have five priorities, and the fifth priority is about our shareholders, which is, yes, it's intended to be a fixed dividend, if we do have surplus cash, at least 60% of that is going to go into buybacks. That's about committed distributions for the shareholders that care about that. On profitable growth, we've got two targets. Compound annual growth on a per share basis on earnings of 7%-9%, which we think is exceptionally competitive. Of course, growing ROACE, return on capital employed, growing from about 9% last year in 2019, up to 12%-14% by 2025. Again, we think that's quite competitive. Last, sustainable value. We do recognize that we need to transition the company. We're trying to think of a way to recognize that through shareholders.
We talk about 20% of our capital employed by 2025 being focused on an energy transition as opposed to 2% or 3% right now. We think the combination of these three things is targeted at the investor. We think it's a compelling proposition. It comes in three parts to try to address concerns from different stakeholders. That's how we're tackling that question.
There's really something there for the income investor. There's some growth there for the investor who's looking for some growth. We believe for the sustainable investor or the ESG investor, there is something there as well. That's sort of how we've tried to structure it, Brian. Great question. The next question from John Reynolds with the Sunday Independent in Ireland. John, lovely to hear from you. I know John well, and it's great to see somebody from Ireland on. I think there was Brian Horgan on earlier in Spencer's presentation as well. We're covering all of Ireland today, which is good. John's question is-
Is that the second Irish question already in the session?
There's been a few.
Yeah.
Clever people over there. Given that the Equinor partnership is currently U.S.-focused, will there be partnerships or acquisitions to come in Europe or elsewhere? John, thanks. We're massively excited about the partnership with Equinor in offshore wind. Equinor is a brilliant company on two dimensions. One, in terms of offshore wind, they've been at it a decade. I think they're seen clearly as the top one or two in the world in offshore wind. Secondly, and really important for us and for them, there's a real alignment of values between the two companies. We go back a long way, back to an oil and gas alliance in the 1990s. We've been through a lot together. There's something about the two companies' value sets that mean that we work together very well. We're really excited about that.
We have a lot of growth to do in the coming years, whether it's the 2.5 GW going to 50 GW, whether it's the 7,500 charging points going to 70,000 charging points, whether it's the ambitions we have in hydrogen, which we'll come on to. You can expect to see more partnerships for sure. Some acquisitions, but I don't think acquisitions at a mega scale. Anything that is in our sights is within our capital framework, John. It's very, very important that people understand that. There will be more partnerships to come. We love partnerships. Murray and I were talking yesterday, and it was his idea about the thing we love about partnerships is A, we don't have this ego thing about we have to do everything ourselves. We're quite happy to join up with people if someone has skills that we don't.
The thing that Murray said is, where partnerships take you is sometimes to places that you'd never have imagined. We went into India and established a relationship with Reliance in oil and gas. Bob Dudley cultivated that relationship for many years, sometimes under a lot of pressure around the developments there. Patience, mutuality, respect, inclusion, all those things that have, we hope, become our hallmark. Suddenly today we have a partnership in retail in India with, as we said in the presentation, Jio, which has to be one of the world's most eye-catching, growing, huge brands at the moment. Partnerships we're all about, we love them, and excited to do more. John, you'll see more in the coming months and years for sure. The next question is, maybe you can help with this, Giulia.
Do you think you could hit your 2050 target earlier, i.e., by 2030? If not, what is holding you back? I'd remind people that we just set the 2050 target in February, which I know feels like a lifetime ago, but still is not that long ago. Ben, it's a fair question. Giulia, you got some thoughts on it?
Thank you. I think, we indeed just set out in February our 2050 targets, and our aims are focused on getting BP to net zero by 2050 or sooner. This said, on August fourth and across the next two days, we will be talking in more detail about our 2025 targets and our 2030 aims. As Bernard said, we see those 2030 aims as pretty ambitious, yet feasible, and we believe we have the capabilities to deliver on those. I think currently, we think the targets that we have set for 2030 are the right aims to push forward. If things accelerate and we can accelerate, we, in any case, are very much supporting a path which is consistent with Paris. I think we've just set them. We're very much in motion towards delivering on our 2025 targets and our 2030 aims.
I think it's a bit early to talk about accelerating anything beyond that.
Yeah. It's great. The ambition is great, we love ambition. I think people, Ben, would probably, what they want from us now is delivery, we get that. That's what we're going to do. Rather than update our ambitions or bring things forward more, they are already ambitious, rightly so, as Giulia said, we believe we will deliver them. I think it's time for delivery, that's what we are getting down to do. That's why we're excited about the Equinor partnership, because right out of the bat there, that is something that we get to do, there will be more in the weeks and months ahead. Watch this space. George Richards with JRP in the U.K. For me, what do you see as the role of hydrogen in helping organizations and nation-states to achieve net zero?
George, it's a great question. Giulia and I were with an NGO or a climate activist last week, I asked them, I said, "What's your ultimate dream here?" Their response was renewable electricity and green hydrogen, and that was their dream for the world. I think we would broadly agree with maybe two things to add rather than two exceptions. I think we would add bioenergy because I think we believe in bio. I think on hydrogen we would say not just green hydrogen, but green and blue hydrogen because as Spencer said earlier, on renewables we can electrify everything that we want in the world. There comes a point where there are some things that just are really difficult. Heavy-duty transport, some industrial processes, heating. These are things that are very difficult from an electricity standpoint. Hydrogen comes in.
We would say green and blue because as Spencer put it quite well, I think. You do want to build that hydrogen economy, so you want to give it the best chance that it can. You don't want to necessarily pull renewables away from their job in replacing the coal and power, for example. You want renewables to be concentrating on decarbonizing the power sector. Giulia's pleased that I listened to Spencer's presentation. I think that's really the answer around hydrogen. Giulia, did I miss anything?
No, I think it was perfect. I would just add to that indeed, as Spencer said, we see it as a critical enabler to the transition. We talked about in the rapid and net zero scenarios, hydrogen getting to up to almost 20% of final energy consumption. It is a critical role to play. In particular, for hard-to-abate sectors and industries, and in particular, for instance, for heavy-duty transport. There are sectors in which hydrogen will have to play a critical role for the energy transition to come into play and achieve the Paris Agreement.
Very good. Great. Giulia, thank you. George, thank you for your question. Where will we go next? From Graham Weale at Ruhr University Bochum, where we have a very large presence. Graham, thank you very much for your question. To what extent are the current low oil prices hindering investment in new forms of energy? Murray, you want to have a little go at that in terms of are they low? Are oil prices low in the first place? They're higher than what they were. Are they holding us back a little bit?
Yeah. Thanks, Bernard. Hi, Graham. Thanks for the question. I think I'll dodge the question if oil prices are low or not. If I look back one week, the forward price for 2021 was $47. If I look at it this morning, it's $42. All I know is whatever I say, I'll get it wrong. From our perspective, we don't focus too much on the oil price. Instead, we see what we can do to drive efficiency in our business. I think for ourselves, we reset our overall capital allocation framework on August 4th. What we said is we wanted five clear priorities about where the sources of cash would be spent over time. We talked about it in five ways. The first thing we'd fund is a resilient dividend.
Second, we'd de-leverage our balance sheet and get the balance sheet to a place where we could strongly invest moving forward with a strong investment-grade credit rating. Our third priority was investing into low carbon, and that is the third priority, and we gave a capital range on that as well. After that was the fourth one, which was investing into resilient hydrocarbons, the historic oil, et cetera, that you're talking about. The fifth priority I mentioned earlier is if we have excess cash after that, at least 60% of it would be for share buybacks. As we think about low oil prices right now, if oil prices start going down, how do we approach capital allocation in the corporation? Well, obviously if prices are too low, there's no share buybacks. That's stage 1, we cut back.
Stage 2, we look at the resilient hydrocarbons, we say to ourself, if the price of oil is $30 or $40, probably some of these things aren't economic as well. We start rolling back that resilient hydrocarbon spend. We've got a fair degree of flexibility in there, somewhere between $1 billion and $2 billion at any moment in time, we can pull back to drop that breakeven even lower. That then enables us to pay our dividend, to de-leverage the balance sheet, and to invest into the transition. Do I think the current oil prices are hindering us? Not really. We've got plans laid out for a capital frame of $13 billion-$15 billion next year. We'll probably be at the lower end of that next year. We'll report back to you on that after our 3Q results. I think we've got a sensible space.
We're starting to grow. We've done the great deal with Equinor that Bernard talked about. That'll obviously go into our investment next year. We'll be careful, and we'll do this in a measured way to make sure that we drive returns. No, I don't think we're hindering investment right now.
Very good. Excellent, Murray. If I could add, in our priorities in the capital allocation, we made a deliberate choice, and we debated it for some time, I think, Murray, and it's number three and four in the ordering. We have put investing in the transition as priority number three ahead of that hydrocarbon investment. The reason that we've done that is because we have more flexibility, as Murray said, in the hydrocarbon investment. At the same time, if we don't really maintain that focus on investing in the transition, then we'll keep deferring it, and we don't want to do that. That priority, that number three and four, a lot of debate went into that, and I think we've got to the right place. Graham, thank you very much for your question. Paul Sankey from Sankey Research.
I'm not sure there's ever going to be a Looney Research, is there? Let's see. Your outlook is heavily dependent on energy policy outcomes. How do you see the U.S.A., China, and India following EU policies that imply much higher energy prices? Giulia, I'd like you to help on this. I'll just say one thing, Paul. Well, just two things if I may, and then ask Giulia to comment. First of all, the outlook is not dependent on energy policy outcomes per se because we've got four scenarios in there, they're all quite different. Business as usual, for example, is not predicated on some major policy outcomes. Clearly rapid and net zero absolutely are.
In terms of our strategy, again, the point we make over and over is that while we have a strategy that is leaning into the transition, it is also resilient to a business as usual. Giulia, you want to comment more directly?
Yeah. To add on that from a policy standpoint, if I go back to the Paris Agreement, the Paris Agreement calls on global nations to self-define their pathway to achieve zero emissions in the second half of the century. It recognizes that different markets and different countries will have different pathways, with developing markets, for instance, likely having to increase their absolute emissions in order to sustain economic development before actually being able to embark more forcefully on the energy transition. Policy will be different by market as energy markets transition. We see opportunity across all these markets. China's very much leading and heading into electrification. We are planning to play into electrification. Brazil is leaning very heavily into biofuels. We are going to play in biofuels with our BP Bunge JV. I would say the answer is not necessarily the same across markets.
Markets will evolve along different pathways, and we see opportunities across these different pathways and these different markets.
Giulia, thank you. Paul, thank you for the question. The next question is, again, one for you, Giulia, I think around nature-based offsets. This is from Shadia Nasralla with Reuters in the U.K. "Hi, can you expand on your plans for nature-based offsets, given how small the market is for credits in this space? Many thanks. Shadia from Reuters.
Yeah. Again, if I go back to the transition scenarios, and as I mentioned in the sustainability presentations, we see natural climate solutions playing a critical role for the world's energy systems to decarbonize. The IPCC scenario for 2100 mentioned 500 million hectares having to contribute. We do see a critical role for NCS to play in the transition, and we plan on participating in shaping the market, both in terms of origination of NCS opportunity, in terms of supply, but also in terms of shaping, if you wish, a voluntary carbon trading market. As we do so, we will do so along the highest standards across the entire value chain.
I'd like to also go back to what we said, which is when it goes back to BP and the aims we have set for 2030, we do not rely on offsets to deliver on those 2025 targets and 2030 aims.
Great. Thanks, Giulia. Thank you, Shadia, for the question. Next question is from Michael Smith in Thailand. Michael, it must be late, I reckon. This is a significant and risky shift in focus and expertise. The 1990s saw many technology companies attempting to shift from hardware-driven revenue to software and services. Most of them failed due to legacy management failings to accept that the old revenue and business models were gone. How is BP planning to upgrade its management and technical expertise to deal with the new challenges? It's a great question, Michael. I hope you're not suggesting that we all need to get upgraded, but that may well be true. Let's hope not.
Look, in terms of the skills and so on, I think we need to talk a little bit more about the things that we do, that are as suited to this new world, as they are to the old world. Our consumer mobility business, the capability that we have in that space is, I think, incredible. Personally, I think it's underappreciated both inside the company and outside of the company. Earnings growth every single year since 2014, high returns, strong brands, growing convenience offers. Who would have thought that BP's Coffee is the number one coffee brand in New Zealand? Fun fact, Wild Bean. This is an area of the business that I think we have really relevant skills, and that's why we're confident that we can almost double earnings from that business in the next several years. You look at power and electricity.
We're talking today, we're probably one of the top five power traders in the biggest electricity market in the world, in America today. You look at operational and technical skills. Our projects organization, this isn't us saying it, but as I said, benchmarked on four out of the five relevant kind of attributes, we were best in class. That's done by IPA. You start thinking about offshore wind, you start thinking about floating wind, you start thinking about all those things. They're going to need project managers, and we think we can bring those skills. In places like mobility, companies like DiDi want to partner with us because of things like our safety management system. In many ways, more skills. I guess my point is more skills are relevant to the future than you think. Where we lack skills, as Kerry says, we hire.
We're hiring a head of sustainability. We'll look outside the company. We brought in Fran Bell as our distinguished data science advisor. Incredible background. We brought in somebody to lead innovation. Murray's looking at people outside the company in his part of the organization. We're about refreshing skills. We've brought Giulia in, the list goes on. We're very much in the world of our people have more relevant skills than a lot of people might think. Of course, where we have gaps, we'll recruit. That's what is exciting about February, and that's what Kerry was alluding to, is that actually there's a world opening up to us in terms of recruitment that sort of would have been hard.
Yeah.
Kerry, do you want to add?
Yeah, it's great to see the question. In fact, as Michael alluded to, I was working through the technology transition in an old company, so I can really relate to what he's saying actually from a people standpoint. I think you're right, Bernard. The reality is, when you announced your new ambition or our ambition in February, we actually saw a peak. In terms of the number of applications that we have coming into the company, we saw an all-time peak of over 12,000 people applying to BP at that point. What we know is that the direction of travel is attractive to people outside of our company, and as Bernard said, great opportunity also for us to take some of those really relevant skills and use them in different ways.
I think the other point I'd just add is, since we already have today and some of the operations we have in different regions. We have built businesses where we don't have skills or expertise in locations from scratch. That's been through the educational system, creating the right type of educational system locally as well as then hiring and developing new businesses. I think it's a combination of all these things. It will be upskilling, it will be reskilling, it will be partnerships, it will be hiring. Through that combination of factors, we will build the business we need for the future.
Yep. Great. Kerry, thanks. Michael, thank you for your question. Hope that helps. Chris Kuplent, Bank of America. Murray, if you can help with this one. You're stressing that there is no plan for a fire sale. There is no plan for a fire sale, Chris. You're in no hurry to exit upstream positions. Do you not expect that your upstream legacy assets in, say, three years' time will face more competition versus many more assets by then being up for sale from, for example, even the U.S. oil majors? Thank you, Chris. Murray?
Sure. Hey, Chris. Good to hear from you. Thanks for the question. Hope you're doing okay in Germany, if you're still there. Just to remind you of what we talked about, we said then on August fourth that we'll be divesting a total of $25 billion of assets in the half of 2020 and 2025, as Bernard mentioned today, half of those have been announced or are on the way to the completion. We've got about $25 billion number left to go. We've got numerous conversations ongoing. I think, Chris, the part that's a little bit unusual for us is post-2020, we've divested something like $60 billion or $70 billion worth of assets. We have significantly high-graded the portfolio.
The assets that we have left in, although there may be some assets that we call tail in our portfolio, they're pretty good compared to other companies because we've gone through that gigantic high-grading. I think, first of all, we start with just a great set of assets, and things that we don't like, other people generally like. If you need proof points on it, you only need to look back at Alaska, where Hilcorp decided they wanted to take on Alaska, and we came to a good agreement on that. You need to look at Petchems, where INEOS decided they wanted to tackle that, and numerous ongoing conversations post the August fourth.
I think because of our high-graded position, I think because of all the sales we've done in the past, and I think there'll just be a good set of assets with lots of inbounds. As Bernard said, I don't feel a rush, and I feel pretty confident that we'll be able to deliver it, especially with our track record of delivery in this space.
Different people want different things, don't they?
Mm-hmm. Yep.
I mean, there are parts of the world that these assets remain very attractive to.
Absolutely.
There are buyers out there. I think this is Chris in support of our 40% reduction, I think by 2030, but we'll I'm sure have a chance to follow up with him this week on that. The next is from Irene Himona with Société Générale. Hi, Irene. This is for Bernard on the delivery of the 50 GW renewable ambition by 2030. You referred to this being realistic and achievable. It represents only 1% to 4% of the total global capacity you see across the scenarios introduced today in your outlook. Why is such a market share easily, quote, "deliverable." for BP when the competitive landscape no longer only includes other major oil and gas peers, but also utilities, pure renewables players all looking to exploit the same opportunity. It's a good question.
Giulia will have something to add on this as well. I do think it's really important, Irene, to look at track record here. A lot of people say, "What does BP really bring, really?" Yes, you say integration. Yes, you say this. Really, what do you bring? How do you do solar? How does BP do solar? I think we just have to remember in this one, for example, in solar, which is probably half of that 2.5 to 50 GW, it's probably 75% of the pipeline that we have today is solar. Let's look at solar. How would we be able to do that? We do that through Lightsource BP. Who is Lightsource BP? Lightsource is a company that's been around for almost a decade, and they do solar. That's all they do. We're now their partner.
They move at lightning speed. You'll hear this week about that from members of the Lightsource BP team. Two years ago, they had 1.6 GW of capacity in their pipeline. Today, that's 16 GW just two years later. If you get a chance, look at their website. Look at some of their videos. I was looking at one at the weekend. Do you know how many I asked you this earlier, how many solar panels it takes to develop a 450 MW solar farm in Spain? 650,000 solar panels. That's what they do. They do these projects kind of for breakfast. They are an execution machine. They've gone from three or five, I think, to 13 countries. They've gone from zero states in the United States to 20 states.
When it comes to BP's ability to prosecute that solar build-out, we have an incredible machine, an incredible company called Lightsource BP. That's what they do, and that's all they've ever existed to do. They're the things that give me real confidence in our ability to prosecute this. Then, of course, we have the offshore wind partnership, and nobody has to question Equinor's credentials in that space. We have our own onshore wind position in the U.S. I want to be really clear, Irene, because again, it's a question that people ask. They say, "Oh, I'm really worried about this 50-GW target. They're going to deliver it at all costs." We're not going to deliver it at all costs. I think many of you know Murray well enough by now.
We have said and made it very clear that we're going to deliver that 8% to 10% return. If we can't see it, we won't invest in it. We actually think we can do better, but we're not promising more than that. We're not promising the world. We're promising 8% to 10%. If you look at how we build that up, and Dev will go into it this week, very confident in how we can do it, and there is no need for us, we think, we hope. We have a little lighting issue here, which is going to get resolved in a moment. Don't worry, we're still here. We don't feel like we need to compromise on value to deliver those volume targets.
I know it sounds not the greatest midpoint in the world, but I would encourage people to look at that Lightsource BP company, look at their, Giulia anything to add?
Well, just one joke, which is we're pretty adaptable, and hopefully, you can have seen that from today's hiccup on the technical session with Spencer and what's going on with the lights today. Beyond that, what I would say is I just wanted to contextualize the 1%-4%.
Yeah.
1% is basically the announced 50 GW developed at financial close in a net zero scenario. In a, if you wish, in a fast-paced transition. The 4% represents the 50 GW in terms of the total global capacity to be added in a business as usual scenario, if you exclude China, because you were to say, China is a difficult market to participate in. That's to give you a bit of a sense of what we're talking about in terms of ambition and contextualizing for the growth that even in a business as usual scenario, we see taking place in the years to come.
Great. Excellent. Irene, thank you for that. More from Dev during the week on this.
Let's keep going with some more questions. Christyan Malek with J.P. Morgan here in the U.K. Hi, Christyan. The path to 2025 seems more robust from an oil demand perspective than arguably the subsequent years into 2030. Moreover, the Energy Outlook seems to infer a rather large deficit could emerge before we approach peak demand. If that occurs, would you consider allocating more capital towards your oil and gas business at the expense of accelerating your renewables pipeline? Or does the macro environment, in as far as being better than we expect, make no difference to capital allocation priorities? Murray, you want to take that one?
Yep, sure. Hey, Christyan. Good to hear from you. Look, I think our path is pretty clear. We have a set of five priorities. We have a clear capital frame that we'll be investing $14 billion-$16 billion of CapEx across the time, $13 billion-$15 billion before we hit our net debt target and $14 billion-$16 billion thereafter. We've given the targets on transition investment, such as low carbon, and we've told you that that's the third priority and that hydrocarbons come after that. I think the way for you to think about this is we have a pretty clear frame. We've got a coherent approach to capital allocation. We're not going to meander away from that. We know what's happened in the past when the sector has chased more and more investment in the upstream when prices go up.
We know how much value gets destroyed by that, and we're not going back to that. I think the way you should think about us is we'll pay our dividends, we'll deleverage the balance sheet, we will invest at the levels we've talked about into the renewables pipeline, and we will keep our overall capital frame tight in that $14 billion-$16 billion range, including inorganics. That's a change and enforces more investment discipline. What I'd hope over time that really happens is we can continue to drive efficiency and we can continue to do more across the totality of the business by driving that efficiency in. I don't think it makes good business sense to chase volumes.
I think over the past few decades, we've really learned our lesson on that, and we're going to focus very tightly on doing the historic upstream investment as efficiently as we possibly can with real rigor on this space to make sure we don't repeat some of the mistakes of the past.
Great. We have a frame, it's clear, and returns are a boundary. That's how we'll play it. Christyan, thank you. Let's keep going. We've got a few more minutes left here. Murray, I think this is probably best for you. You're also responsible for supply chain. Will BP engage their supply chain providers in the transformation effort? If yes, how? This is from Meriem Bertouche with Badley Ashton in the U.K.
Yeah. Hi, Marianne. Thanks for the question. Absolutely is the simple answer. As we laid out the ambition in February, we started a body of work inside the supply chain organization that, as Bernard says, reports to me thinking about what does it mean to have a sustainable supply chain. We've got a small team working on that. We're out with our suppliers looking at their thoughts, figuring out how do we reduce the total emissions. How do we create a sustainable supply chain that includes recycling, emissions reduction, materials, green steel, et cetera. We think there's a lot of room in this for improvement. We think there's a lot of waste in that system. We don't think we've parked it.
The funny bit about it as you dig at it, is that actually moving towards a sustainable supply chain is actually a more efficient supply chain as well. The amount of waste on packaging, the amount of waste on, recycling, is just something that we can definitely improve upon. I think it's a big prize. We're not advertising it massively right now as we come to grips with it over the coming years. I think, this time next year, we'll probably come back to you and talk to you more about what we're doing in that space, because I do think it represents a tremendous opportunity, not only to, be a more sustainable company, but actually to drive efficiency into the sector as well.
Very good. Excellent. Thank you, Miriam. Thank you, Murray. We'll try and get one or two more in, if that's okay. Giulia, one for you from Jon Stow with The Wall Street Journal in the U.S. Can you give some examples of where customers and end users have ramped up demand for specific renewables? How have these specific examples emboldened or affirmed your approach? How necessary is this sort of pull from end users rather than government for renewables to get a company like BP to invest increasing amounts?
Yep. Thank you, Jon. I would say that, to the second question of how necessary is this for BP to increase their investments into the renewable space and the low-carbon space in general, I would start by bringing you back to the outlooks that we have shared and our view on ramp-up of renewables within the energy system. I would say, the investments in the space are driven also by our perspectives across scenarios in terms of how we see renewables play a critical role. In terms of specific examples as to where we see customers driving more renewables. We've talked about it. We've talked about, 114 cities as an example, pledging to a 1.5 degree path, in terms of decarbonization. We've announced our partnership, for instance, with Houston, we've announced our partnership with Aberdeen, and William will share more and more examples along those lines.
Along the same lines, we shared also on August fourth, and we will share over the next few days additional examples of industry-specific and corporate-specific pulls for renewables. We've announced that we would like to partner with three industrial areas, right? Transport across, if you wish, sectors, how to decarbonize industries and consumer and tech to help those industries decarbonize. Within those, we already have examples of customers which are driving decarbonization. We shared, for example, the Amazon deal by which we're sourcing renewable power from Sweden. We're coupling it with our own renewable generation in Iberia. We're driving, if you wish, a firm net zero renewable offer where we can also bring our offsets approach to basically balance it with gas offsets renewables and therefore have a full renewable offer.
Thank you, Giulia. Thank you, Jon. The final question, Bruce Duguid, who's with Hermes here in the U.K., but also the coordinator for the Climate Action 100+. We welcome the ambition of BP's net zero strategy. I think Bruce loves it rather than welcomes it, but let's say we welcome it. The clarity of the 2030 targets. Will all the CapEx, including in fossil fuels, be consistent with the Paris goals with reporting to support this from Bruce? Bruce, thanks, and thanks to you and the team for your support and challenge over the last couple of years, which has helped us get to where we get to. I think Gordon will speak to this during the week, and we should let him do that.
All I would say is that for a company who's going to spend about $7.5 billion in the upstream, Murray, we used to spend over $15 billion, $16 billion in the upstream for a company who's planning to reduce its production by 40% over the next decade to a company who's not going into new countries for exploration and is going to have an exploration budget of less than half a billion dollars when that used to be around $2 billion. I think you can rest assured that the remaining investment is essential and will have high returns, very quick paybacks. In terms of consistency with Paris, they're the types of things that would support that. More from Gordon during the week, but I think very much so. Bruce, thank you for your question. With that, I think we are done.
A lot of information thrown at you all today. We really appreciate your patience. I hope you found it interesting. I hope you learned something. If you've got feedback, we always say we're not perfect. We don't have all the answers. There's plenty of stuff that we can get right and plenty of stuff we can improve on and let us know. We may not agree on everything, but the dialogue makes us better. We really, really appreciate it. We're back tomorrow, Tuesday, and we're back Wednesday as well. We will be looking forward to sharing much more with you. With that, thanks to the team and thanks to everybody for joining. Thank you very much.
Thanks.
Thanks. Thank you very much.