Green groups call for windfall tax on BP to ‘up the ambition’ on cutting fossil fuels

BP has reported its highest underlying profits for more than a decade

Saphora Smith
Climate Correspondent
,Holly Wiiliams,Holly Bancroft
Tuesday 03 May 2022 18:05
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<p>BP has reported its highest profits in a decade </p>

BP has reported its highest profits in a decade

Green groups have called on the government to impose a windfall tax on BP to raise money for renewables, energy efficiency and vulnerable families.

The call for the one-off tax from groups such as Greenpeace and Friends of the Earth comes as BP reported its highest underlying profits for more than a decade.

Charlie Kronick, Greenpeace UK’s climate finance advisor, said the windfall tax could help insulate Britain’s homes, invest more in the transition to renewables and offer social relief to poor households.

The second thing it would do is to make clear that the government was accelerating the transition away from fossil fuels, not slowing it down, he said.

“That money has to be used to up the ambition and to accelerate the transition,” he said.

Mr Kronick said there was next to no investment or coherent policy around energy efficiency in the UK.

One study published earlier this year by Tado, a smart home energy company, found that UK homes lost heat up to three times faster than its European neighbours.

Friends of the Earth said the money raised from a windfall tax should be invested into a nationwide energy efficiency programme.

The group has called on the government to roll out a free, council-led street-by-street loft and cavity wall insulation programme, targeted at the households most in need.

It has said a windfall tax should be introduced on profiting fossil fuel companies to pay for the scheme which they say would reduce energy demand and cut fuel bills.

Tessa Khan, a director of Uplift, a group that campaigns for a just and fossil fuel free UK, also called for a windfall tax on BP on Tuesday to help people with their soaring bills.

On Tuesday, International trade secretary Anne-Marie Trevelyan said she didn’t support a windfall tax on energy companies because it would hamper the UK’s ability to transition towards clean energy.

“The reality is if we strip away their profits, we will not be able to do what is the most important thing, [which] is to invest in those clean energies of the future which will also enable us to come away from our reliance on foreign energy,” she told BBC Breakfast.

Business Secretary Kwasi Kwarteng last week wrote to the oil and gas industry saying it must also set out plans for investment in clean energy during a meeting in the coming weeks. Chancellor Rishi Sunak has appeared to distance himself from a windfall tax, instead looking to business making big profits to invest cash back into the UK.

BP has pledged to invest in North Sea oil and gas, while driving down operational emissions, and said it is also working on a range of lower carbon energy projects in the UK.

The calls for the windfall tax come after BP announced it had doubled its underlying replacement cost profits from $2.6 billion (£2.1 billion) a year ago to $6.2 billion (£5 billion), surpassing analyst’s expectations.

The underlying profits come despite BP posting a quarterly loss after taking a mammoth £25.5 billion (£20.4 billion) hit following its decision to quit Russia.

In a statement earlier Tuesday, Chief executive Bernard Looney said that “in a quarter dominated by the tragic events in Ukraine and volatility in energy markets, BP’s focus has been on supplying the reliable energy our customers need.

“Our decision in February to exit our shareholding in Rosneft resulted in the material non-cash charges and headline loss we reported today,” he said. “But it has not changed our strategy, our financial frame or our expectations for shareholder distributions.”

The Independent has contacted BP and the government for comment.

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