BP plc ( BP Quick Quote BP - Free Report) entered an agreement with Rio Tinto plc ( RIO Quick Quote RIO - Free Report) to carry out a one-year biofuel trial to reduce carbon emissions from the latter’s marine fleet.
Per the terms of the trial, BP will supply marine biofuel to mining group Rio Tinto for around 12 months. This will be one of the most extended marine biofuel trials so far.
The fuel will be tested on Rio Tinto’s RTM Tasman vessel, which will operate on a mix of Transatlantic and Atlantic-Pacific routes. The trial results will help Rio Tinto explore possibilities to reduce carbon emissions from its marine fleet and decide its future biofuel strategy.
A lengthy trial will provide important information on the capability and intensive use of biofuel. The trial aligns with Rio Tinto’s strategy to reduce marine emissions across its value chain and support efforts to decarbonize the maritime industry.
The trial is exploiting a B30 biofuel blend manufactured by BP. It is formed by blending 30% fatty acid methyl esters with very low sulfur fuel oil. The B30 biofuel blend can reduce carbon emissions by up to 26% compared with standard marine fuel oil.
The trial will examine multiple engine and fuel performance factors, which include engine efficiency and fuel consumption, corrosion and degradation, microbial growth, temperature impact, fuel switching impacts, and fuel stability.
Sustainable biofuels are crucial to decarbonizing the shipping industry in the near and mid-term as the companies have been moving toward long-term net-zero solutions. The trials are part of BP’s continuous efforts toward a carbon-neutral future for shipping.
BP has set forth an ambition to be a net-zero company by 2050. The company is working on important industrial sectors such as shipping, which have significant carbon emissions to control.
Company Profile & Price Performance
Headquartered in London, the U.K., BP is a fully integrated energy company, with a strong focus on renewable energy.
Shares of the company have outperformed the
industry in the past month. The stock has gained 13% compared with the industry's 9.4% growth.
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BP currently has a Zack Rank #3 (Hold).
Investors interested in the
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