BP Chief Executive Bernard Looney is betting on hydrogen to power future low-carbon businesses as the governments of major economies stump up cash to develop the fuel to decarbonise.
Low-carbon hydrogen already has a big fan-base and is forecast to play a major role in reducing greenhouse gas emissions from heavy industries and some forms of transport.
But it is expensive to produce and often needs government support to compete against fossil fuels.
The United States, for example, is offering large incentives for producing it under President Joe Biden’s $430 billion Inflation Reduction Act (IRA).
BP has been quick to react and is in the early planning stages to develop a large, low-carbon hydrogen hub around its Whiting, Indiana refinery, Tomeka McLeod, BP’s newly-appointed head of hydrogen in the United States, told Reuters.
When Looney took office nearly three years ago, he pledged to reshape BP and cut carbon emissions by reducing oil and gas output and growing renewables. He is preparing to update investors on February 7 on where things stand.
Hydrogen will have a starring role along with offshore wind, BP company sources told Reuters.
BP has overhauled its structure to create a dedicated hydrogen division led by Felipe Arbelaez which includes 150 staff.