BP has flagged an additional $1 billion impairment charge for Q2 2026, primarily tied to its gas and low-carbon energy transition businesses. The company's green investments have delivered lower returns than expected, especially as oil and gas profits benefit from Middle East volatility. BP's low-carbon energy production is expected to drop to 750-770 mboe/d from 798 mboe/d in Q1, while net debt has risen to $22-23 billion. The impairment follows a broader retreat from transition spending. BP cut planned annual spending on green businesses by roughly 70% to about $2 billion per year in early 2025. It has shelved UK hydrogen projects like H2Teesside and HyGreen, sold stakes in two UK CCS projects, and exited a major green hydrogen hub in Australia. The only bright spot is a potential expansion of a 25 MW green hydrogen plant in Spain with Iberdrola, backed by €211 million in redirected subsidies. The story highlights the tension between near-term fossil fuel profits and long-term decarbonization goals. For investors and policy watchers, BP's moves signal that low-carbon projects still face a tough economic environment without stronger policy support or carbon pricing.
