CO2 Emissions Management - BP Regional Leading Practices Forum

1. CO2 Emissions Management - BPRegional Leading Practices Forum Rachel Lewis 12 November 2008

2. Evolution of BP’s Climate Change Actions

3. Refining Air Exploration Castrol Retail Solar BP’s Carbon Footprint in Australia • BP’s carbon footprint in Australia is significant: • ~3 million tonnes CO2/year from our assets • ~30 million tonnes CO2/year from our liquid products

4. Views on Australia’s Climate Change Policies • BP has been advocating climate change policy and action in Australia for over a decade – and we welcome the Carbon Pollution Reduction Scheme (CPRS) • The CPRS—with some modifications—can become an effective policy tool to guide Australia’s transition to a competitive, low emissions economy • A key challenge: achieving meaningful emissions reductions as an “early mover” without disadvantaging Australia businesses who compete with others facing no such carbon constraint • Solving the issue of “Emissions Intensive Trade Exposed” industries is fundamental to the scheme’s success: a key enabler • Australia’s success can be precedent-setting for others: such as the US

5. The CPRS Solving the EITE Issue • Given the significance of the structural adjustment required across the economy, the Government should provide the necessary transitional support from general revenue • The intensity metric used to designate EITE activities should be based on “value added” rather than revenue • Refining is an EITE activity– and we’ll continue to work with the Government and industry associations to define transitional support Complementary Measures • We support emissions trading as the key policy instrument as well as the need for transitional, complementary measures to facilitate the deployment of large-scale, low-carbon, step-change technologies Trading • Let the market work: no fixed prices • Emissions Mitigation Unit (EMU) ?

6. Climate Change Policies: Implications for Kwinana Refinery Refining: • Carbon costs from Kwinana refinery emissions (~ 1 million tonnes/yr CO2) • These costs cannot be passed on: import parity pricing What Kwinana needs to do: • Develop carbon price scenarios and impacts • To prepare for CPRS and to support BP position and response to Green Paper • Prepare for the CPRS • Updating GHG Reporting Processes to report under NGER • Development of further GHG abatement opportunities: what are Kwinana’s options for reducing GHG, and what do they cost? • Work with IST (BP’s trading arm) to develop interfaces for managing compliance position and risk • Fulfill requirements of the Energy Efficiency Opportunities Act • Prepare for future carbon constraints

7. Climate Change Policies: Imperatives for Industry • Gain management commitment: this is a financial and strategic business issue, not just an environmental one • Build knowledge & capability for measuring & forecasting GHG emissions (note: reporting is now mandatory in Australia) • Identify abatement opportunities (scope and cost) • Consider greenhouse gas impacts in future investment decisions • Help governments to create appropriate policy and regulation • Recognize that “going low-carbon” is a potential business opportunity

8. Thank You Rachel Lewis Business Development Manager BP Kwinana Refinery Rachel.lewis@bp.com +61 8 9419 9409

9. Backup Slides

10. What BP is Doing- II • Existing Businesses • Continued investment in energy efficiency and emissions reduction; preparing for a carbon constrained future New Businesses • Developing material growth options for BP in low-carbon technologies. • Building a portfolio of operating businesses and ventures.. • Independent management, culture and advisory board. • Our business in 3 stages of development • Growing: Wind, solar and gas-fired power. • Developing: Biofuels and Hydrogen Energy. • Incubator: Carbon capture and storage, clean coal, distributed energy and venturing.

11. Solar power Currently • BP is a leading solar manufacturing and marketing company. • We have manufacturing capacity of 228MW with facilities in Bangalore, Madrid, Frederick, Xian and Sydney. • We have 30 years experience, 20 offices, over 2000 employees and installations in 160 countries. Our commitment • We are increasing our overall global manufacturing capacity to 700MW and our sales to 800MW. • We are investing $97m to increase our casting and wafering capacity at our Frederick plant in the US. Silicon activities • Extensive investigation in alternative silicon sources: • provides opportunity for significant cost reduction over traditional sources • scalable and in line with future growth requirements • Continued development of our advanced Mono² and commercialization: • Mono² efficiencies with multi cost and processing advantages

12. Wind power Currently • We have 2 well-established wind farms in the Netherlands. • We operate a 300MW wind farm, cedar creek, in Colorado with partner Babcock & Brown. • We have five wind farms under construction in the US: in Texas we have the 60MW Silver Star I & the 150MW Sherbino; in Indiana we are building the 400MW project; we have a 100MW Flat Ridge I project in Kansas and in California we are repowering the Edom Hills project from an existing 11MW project to a 20MW project. • We have commissioned and inaugurated a 40MW project in Maharashtra, India with our partner Suzlon Energy. • We have a Strategic alliance with Clipper Windpower to supply up to 4,250MW of wind turbines over the next five years. • We have two turbine supply agreements with Vestas, Nordex and GE,. Our commitment • Our target is to have commissioned 1,000MW by end 2008. • Pursue additional projects in Europe and Asia.

13. Hydrogen Power Currently • Together with Rio Tinto we have formed a jointly-owned company, Hydrogen Energy, to focus on hydrogen-fuelled power generation using fossil fuels and carbon capture and storage technology. • Hydrogen Energy is planning the world’s first industrial scale hydrogen power projects with carbon capture and storage – in Abu Dhabi and California • We have entered into a strategic technology agreement with General Electric to accelerate the development of the technology and the deployment of the concept. Our commitment • We plan to show that this wide range of technologies will work at scale and will use a variety of fuels to produce hydrogen and diverse types of reservoirs for sequestration.

14. Biofuels Currently • BP and DuPont created a partnership to develop and market advanced biofuels to address the growing need for renewable fuels for transportation. The first of these products is biobutanol. • With ABF and Dupont, we are progressing a project to construct a world scale bioethanol plant of around US$400million in Hull, UK. • We are investing $500 million over 10 years (2006-2016) in the Energy Biosciences Institute to explore and develop the application of biosciences to energy-related problems. • We are examining the possibilities of using jatropha, an oil bearing crop through a $9.4 million India project and a JV with D1-BP Fuel Crops Limited to develop jatropha as a sustainable biodiesel feedstock. Jatropha oil is inedible, is not used in food and can be grown in a way that doesn't compete with food land. • BP also intends to take a 50% stake in Tropical BioEnergia SA, a JV that will invest $1 billion to construct two sugarcane ethanol refineries in Brazil. Sugarcane is the most efficient biofuel feedstock currently available, it provides a greenhouse gas emissions reduction of up to 80% and it lends itself to further improvement through the use of advanced biofuels technology. Our Commitment • We will focus on developing sustainable feedstocks and investing in research work to develop the technologies required to produce advanced biofuels.

15. Carbon capture & storage (CCS) Currently • In 1996 BP became a participant in the successful CO2 saline aquifer storage project in the Sleipner field offshore Norway, which injects around one million tonnes a year of CO2. • In 2000, we were instrumental in setting up the CO2 Capture Project, a partnership of leading energy companies focused on investigating CCS technology and developing new technologies to reduce the cost of capture. • We have established the Carbon Mitigation initiative with Princeton university to develop carbon reduction strategies. • In Algeria at the In Salah gas field, we’re testing technology that allows us to capture CO2 from the produced gas and return it underground to the natural reservoirs it originally came from.. We have been reinjecting CO2 at the In Salah field since 2004 with around one million tonnes per year being stored, providing a test bed for CCS at industrial scale. • BP was instrumental in establishing the world’s first industry association for CCS, the UK-based Carbon Capture and Storage Association (CCSA). Our Commitment • We believe that one of the keys to creating a successful CCS industry is to ensure that government provides viable long term policy and regulatory support.