Mobility – Challenges and Uncertainties Dr. Norbert Neumann SSM Forum 17. September 2015, Campus Sursee, Schweiz

This presentation contains forward-looking statements, particularly those regarding global economic growth, population growth, energy consumption, policy support for renewable energies and sources of energy supply. Forward-looking statements involve risks and uncertainties because they relate to events, and depend on circumstances, that will or may occur in the future. Actual outcomes may differ depending on a variety of factors, including product supply, demand and p ricing; political stability; general economic conditions; legal and regulatory developments; availability of new technologies; n atural disasters and adverse weather conditions; wars and acts of terrorism or sabotage; and other factors discussed elsewhere in this presentation.

Agenda

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• Introduction

• Global Energy Perspective

• Energy in Transport

• European Transport Agenda

• Summary

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BP Worldwide

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• 2014 turnover: $ 359.8 billion

• Earnings: $ 8.1 billion

• Employing approx. 84,500 people in almost 80 countries

• 17 billion barrels proved reserves of oil equivalent

• 1.7 million barrels refining throughput per day

• Approx. 17,200 service stations

Source: BP 2014 Annual Report and Form 20F, figures as per 31.12.2014

Continuous change is the norm in our industry

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Global Energy Perspective

Growing population and prosperity

6 Source: BP Outlook 2035

Countries influencing future energy demand

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33%

67%

Global Population & GDP

China + India

Rest of the world

Source: BP Outlook 2035

Global energy demand growth up to 2035

8 Source: BP Outlook 2035

toe = tons oil equivalent

Share of fossil energy will still be 80%, but there will be a shift from oil towards gas

9 Source: BP Outlook Source: BP Outlook 2035

New sources for energy production

• World primary energy production grows at 1.4% p.a. from 2013 to 2035, matching the growth of consumption.

• New sources of energy, aided by improved technology and productivity, make a significant contribution to supply growth.

• Renewables, shale gas, tight oil and other new fuel sources in aggregate grow at 6% p.a. and contribute 45% of the increment in energy production to 2035.

10 Source: BP Outlook

toe = tons oil equivalent

Source: BP Outlook 2035

Renewables represent a growing source in power - Europe has a highest share

• Falling costs enable renewables to continue to gain share in Europe.

• Infrastructure becomes a constraint in European renewables market growth. (EU proactive approach – AFID/Alternative Fuels Infrastructure Directive)

• Outside the EU, renewables are still scaling up

− US does not reach the current EU level of renewables penetration until 2030

− It takes even longer for China

11 Source: BP Outlook Source: BP Outlook 2035

Energy in Transport

Total transport market shares

• Energy demand for all transport areas will grow from 1.8 billion toe in 2000 to 3.0 billion toe in 2035

• Energy demand for commercial transportation will grow by 70%.

• Heavy duty growth more than 100%

• Heavy duty will dominate in road transport

• Importance of gasoline to decrease

• Chances for gas in dedicated areas possible (mainly US and China)

13 Source: EXXON Energy Outlook 2015

Vehicle population

• The global vehicle fleet expected to increase from 1.2 billion today to 2.4 billion by 2035.

• Most of that growth is in the developing world (88%)

• OECD markets are approaching or are already at saturation levels.

14 Source: BP Outlook

OECD = Organisation for Economic Co-operation and Development

Fuel economy

• Fuel economy has improved in recent years

• Forecast to improve by 2.1% p.a. between now and 2035

• Improved by about 1.5% p.a. over the past decade

• Transport demand rises by only 30%, despite a more than doubling of the vehicle fleet

15 Source: BP Outlook Source: BP Outlook 2035

European Transport Agenda

Drivers in European Fuels Market Change

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Emissions/ Environmental Restrictions

New and Advanced Engine

Technologies

Increasing Renewables

Content

Standardizing Products on

European Level

Product Quality

Industry Research

European Legislation/ Regulation/ Standardisation

• Review of Transport Policy for Post-2030

• Application of RED/FQD updates

• REACH - Registration, Evaluation, Authorisation and Restriction of Chemicals

• Review of EN 590 (European Diesel Standard), EN 228 (European Gasoline Standard) and EN 589 (European LPG Standard)

• Standardisation of growth/captive fleet products on European Level

− CNG/LNG

− B10

− B20/B30

− E85

− Paraffinic Fuel (HVO/XTL)

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Extreme Measures - Diesel Ban in Metropolitan Cities

• Parisian Mayor pledging “an end to diesel in Paris in 2020”

• 29/04/2015 - Supreme Court ordered British government to submit new air quality plans to the European Commission by 31/12/2015 due to continued failure to meet NO2 emission requirements.

− Discussions that London might follow Paris response to air emissions problem

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Alternative energies for transport

Slide 20

Propulsion with internal combustion engines: • Biofuels - Wide feedstock range with renewable low-CO2 sources • Synthetic fuels - Production from fossil and renewable sources with synthetic technologies • Natural gas - Fossil (natural gas) and renewable sources (biomethane; "solar/ wind" gas) • LPG - Fossil (oil, natural gas) and renewable sources (bio-refineries) Propulsion with electric motors: • Electricity - Stored in batteries on board of vehicles; grid supply or recuperation • Hydrogen - Stored in tanks on board of vehicles; electricity production in fuel cells

Success of alternative fuels is significantly impacted by declining oil prices

Diversification of powertrains expected - ICE remains backbone of mobility

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Quelle: VDA

• CO2 targets lead to increased efficiency in the combustion engine • Increased market entry of alternative drive systems after 2025 • Conventional power trains are complemented by electrified engines • Hybrid vehicles are projected to grow to 50% of sales by 2040 • Modest gains in full electric vehicles • Renewables (including biofuels) account for 8% of total energy consumption in 2035, compared to just 3% today

Key uncertainties - exploring the impact of alternative assumptions

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GDP Growth

Geopolitics

Climate Policies

China‘s electrification

Source: BP Outlook 2035

- what if growth in China and India slows more rapidly than assumed?

- what if policymakers take more actions to reduce emissions?

- what are the implications of heightened geopolitical risks?

- what if China’s electricity use follows a different path?

Thank you

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