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Supermajor BP is weighing the possibility of investing directly in feedstock crop farming and buying stakes in producers of biofuel feedstock as it is accelerating its biofuels business, Nigel Dunn, Senior Vice President Biofuels at BP, told Reuters in an interview published on Wednesday.
"Biofuels are an easy way for our customers to make progress decarbonizing and, over the next decade, we expect demand to rise quickly," Dunn says in BP's recent overview of its bioenergy business.
BP plans to have five biofuel plants built by 2030 that would process waste feedstock, known as HEFA (Hydroprocessed Esters and Fatty Acids), Dunn told Reuters in the interview. HEFA is a term that covers biofuels made from used cooking oil, beef tallow, and rapeseed oil, among others.
But as competition for feedstock supply will only intensify, BP will need to buy stakes in biofuel producers to procure supply, the executive added.
"We are going to be in as an integrated chain... That's our business today in fossil (fuel) and I think that's going to be the winning way," Dunn told Reuters.
Dunn said on BP's own biofuels page, "Biofuels are a great example of action now in the road transport sector – we already use them in many countries and we can deploy more without changing what and how we drive."
BP aims to grow biofuel production to around 100,000 barrels per day by 2030, focused on sustainable aviation fuel, or SAF. BP already co-processes biofuels at three refineries and is planning a multi-billion-dollar investment across the Kwinana, Rotterdam, Castellón, Lingen, and Cherry Point facilities to increase biofuels production in line with growing demand.
Last year, BP bought U.S. renewable natural gas (RNG) producer Archaea Energy. According to BP, growing the biogas and biofuels business supports both customer decarbonization goals and BP's aim to reduce the carbon intensity of the energy products it sells.
Yet, stressing the importance of an "orderly transition," BP announced earlier this year that it would be producing more oil and gas for longer and now aims for a fall of 20% to 30% in emissions from the carbon in its oil and gas production in 2030 compared to a 2019 baseline, lower than the previous aim of 35-40%.
By Tsvetana Paraskova for Oilprice.com
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Tsvetana is a writer for Oilprice.com with over a decade of experience writing for news outlets such as iNVEZZ and SeeNews.