BP’s Massive Impairment Signals Bad Times for Net-Zero Spending

Core Insights - BP announced a $4–$5 billion hit to its Q4 earnings due to winding down its energy transition business, following Ford's announcement of $19.5 billion losses from curtailed EV plans, indicating broader struggles in the energy transition sector [1][2] Group 1: Company-Specific Developments - BP's low-carbon business has underperformed, leading to plans to exit Lightsource BP and divest from its onshore wind power business in the U.S., with impairment charges reported at $5.7 billion in 2023, $5.1 billion in 2024, and a total of $6.9 billion for 2025 [2] - Shell is also reducing its presence in the energy transition space, suspending a biofuels plant in the Netherlands and reporting an impairment of $800 million to $1.2 billion from its low-carbon business [3] Group 2: Industry Trends - The energy transition industries, once seen as profitable investments, are facing skepticism as major companies like Ford, BP, and Shell express doubts about their viability without subsidies [4] - While global low-carbon energy investment reached an all-time high in the first half of 2025, specific investments in utility-scale solar power and onshore wind have declined, particularly in Europe, where growth has slowed due to economic pressures [5]