BP takes majority stake in US carbon offset firm Finite Carbon

[LONDON] BP has acquired a majority stake in the largest US carbon offset developer, Finite Carbon, the oil major said on Wednesday, as part of its climate goals and to develop a new revenue stream.

BP and other European-listed oil and gas peers such as Royal Dutch Shell are betting on an expected rise in carbon credit prices to counter falling fossil fuel profits as the energy transition accelerates.

California-based Finite pays landowners to manage forests, generating carbon offset credits which can be sold to polluters.

The firm expects to generate US$1 billion for landowners over the next 10 years, after a 20-40 per cent cut of the proceeds, its chief executive Sean Carney told Reuters earlier this month.

Finite currently has 50 carbon projects on three million acres in the United States and generated more than US$500 million in revenue for landowners.

BP declined to give the value of the acquisition or the size of its new stake in Finite. It made an initial investment of US$5 million in Finite last year. BP said in the statement it would help expand Finite's reach into other countries.

BP announced earlier this year that it aims to become one of the world's largest renewable power generators, part of a high-profile campaign to steer the company away from its reliance on fossil fuels that emit gases that heat the planet.

The firm plans to increase its renewable power capacity 20-fold by 2030 to 50 gigawatts while reducing its oil output by 40 per cent and diverting more funds to low-carbon investments.

REUTERS