On Wednesday, in a statement oil major BP said, it has acquired a majority stake in Finite Carbon, the largest U.S. carbon offset developer as part of its climate goals; the move will also create a new revenue stream for the company.
BP along with its other European-listed oil and gas peers, including, Royal Dutch Shell, are betting on an expected rise in carbon credit prices to counter falling fossil fuel profits as the transition in the energy market accelerates.
Finite, a California-based company pays landowners to manage forests, generating carbon offset credits which can be sold to polluters. Over the next decade Finite expects to generate at least $1 billion for landowners after a 20-40% cut of the proceeds, said the company’s CEO Sean Carney.
The company currently has 50 carbon projects on three million acres in the United States and has generated more than $500 million in revenues for landowners.
BP did not disclose the financial value of the acquisition or the size of its new stake. In 2019, it had made an initial investment of $5 million in the company. In a statement it said, its investment would help expand Finite’s reach into other countries.
Earlier this year, BP announced that it would become one of the world’s largest renewable power generators, which is part of its high profile campaign to steer the company away from fossil fuels to renewable alternatives.
BP plans on increasing its renewable power capacity at least 20 times by 2030 to 50 gigawatts while reducing its oil output by 40% and diverting more funds to low-carbon investments.