This target covers the emissions from its operations, the emissions from the use of all the energy products that the comapny sells, and, more importantly, the emissions from the oil and gas that others produce and Shell then sells as products to customers.

Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society. We must give our customers the products and services they want and need – products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society,

...said Royal Dutch Shell Chief Executive Officer, Ben van Beurden.

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The announcement came as Shell unveils a reshaped organization aimed at 'Powering Progress' in the three business pillars of Growth, Transition and Upstream: generating shareholder value, achieving net-zero emissions, powering lives and respecting nature. The company also confirmed its expectation that total carbon emissions for the company peaked in 2018, and oil production peaked in 2019.

 

 

The road to net-zero emissions

Powering Progress supports the most ambitious goal of the Paris Agreement on climate change to limit the global temperature rise to 1.5° Celsius. As such, to achieve net zero, Shell:

  • will continue with short-term targets that will drive down carbon emissions as part of the progress towards 2050 target, linked to the remuneration of more than 16,500 staff. This includes a new set of targets to reduce our net carbon intensity: 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016;
  • expects that its total carbon emissions peaked in 2018 at 1.7 gigatonnes per annum;
  • confirms that its total oil production peaked in 2019;
  • will seek to have access to an additional 25 million tonnes a year of carbon, capture and storage (CCS) capacity by 2035. Currently, three key CCS projects of which Shell is a part, Quest in Canada (in operation), Northern Lights in Norway (sanctioned) and Porthos in The Netherlands (planned), will total around 4.5 million tonnes of capacity;
  • aims to use nature-based solutions (NBS), in line with the philosophy of avoid, reduce and only then mitigate, to offset emissions of around 120 million tonnes a year by 2030;
  • will work with the Science Based Targets Initiative, Transition Pathway Initiative and others to develop standards for the industry and align with those standards;
  • starting at the 2021 AGM, submit an Energy Transition Plan for an advisory vote to shareholders, the first in the sector to do so. It will update that plan every three years and seek an advisory vote on the progress made each year.

 

The Energy Transition

Shell’s aim is to build material low-carbon businesses of significant scale by the early 2030s.

Upstream will continue to deliver vital energy supplies, which will help to generate the cash and returns needed to fund shareholder distributions while accelerating investment in the growth businesses to capture new market opportunities.

In the near term, Shell’s strategy will rebalance its portfolio, investing annually $5-6 billion in its Growth pillar (around $3 billion in Marketing; $2-3 billion in Renewables and Energy Solutions), $8-9 billion in its Transition pillar (around $4 billion Integrated Gas; $4-5 billion Chemicals and Products) and around $8 billion in Upstream. Plans include:

--> GROWTH:

In its growth pillar, Shell aims a growth of global electric vehicle (EV) network from more than 60,000 charge points today to around 500,000 by 2025. It also seeks to extend its biofuels production and distribution business, which in 2019 sold more than 10 billion litres of biofuels.

Our joint venture Raízen, which produces low-carbon fuels from sugar cane in Brazil, recently announced the acquisition of Biosev. This is set to increase Raízen’s bioethanol production capacity by 50%, to 3.75 billion litres a year, around 3% of global production.

In addition, the company aspires developing integrated hydrogen hubs to serve industry and heavy-duty transport, to achieve double-digit share of global clean hydrogen sales, while it also expects to invest around $100 million a year in high-quality, independently verified projects on the ground to build a significant and profitable business to help customers meet their net-zero emissions targets.

--> TRANSITION:

In its transition pillar, Shell seeks to extend leadership in LNG volumes and markets, with selective investment in competitive LNG assets to deliver more than 7 million tonnes per annum of new capacity on-stream by middle of the decade. Meanwhile, it aims to continue to support customers with their own net-zero ambitions, with leading offers such as carbon-neutral LNG.

Furthermore, Shell expects to transform its refinery footprint from 13 sites today to six high-value Chemicals and Energy Parks and reduce production of traditional fuels by 55% by 2030.

Intention to grow volumes of the chemicals portfolio and increase cash generation from Chemicals by $1-2 billion a year by 2030 compared with the medium term. Will produce chemicals from recycled waste, known as circular chemicals, and by 2025 aim to annually process 1 million tonnes a year of plastic waste.

--> UPSTREAM:

In its Upstream pillar, Shell expects to focus on value over volume, being simpler and more resilient, continuing to provide material cash flow into the 2030s. It also expects a gradual reduction in oil production of around 1-2% each year, including divestments and natural decline.


In September 2020, Shell noted the importance of collaboration for achieving tangible results in emissions reduction, setting a course of key actions it will undertake:

  • call for the IMO to adopt a clear trajectory to a net-zero emissions shipping sector by 2050;
  • develop the experience and standards for use of hydrogen in a marine environment and enable commercial deployment of hydrogen across sectors;
  • establish a consortium to develop and trial fuel cells on a commercial deep-sea vessel;
  • develop a set of performance standards for application on future new-build vessels for all ship types with the aim to deliver up to 25% emissions savings;
  • implement a programme of emissions data collection across Shell’s internationally traded time and voyage charters with the intent to publish annual carbon intensity data;
  • double Shell’s existing LNG bunkering infrastructure on key international trade routes by the mid-2020s;
    further build the commercial case for our unique industry offering of carbon neutral lubricants through development of our nature-based solutions portfolio; and
  • collaborate deliberately and decisively with those at the leading edge of the transition in the sector in order to accelerate decarbonisation. This will include, for example, working within the Getting to Zero coalition, and developing an industry-based coalition covering the entire value chain for US and Canadian cabotage shipping operations.