Shell plc advances towards net-zero with comprehensive energy transition update
Shell plc has shared its first energy transition update since the unveiling of its ambitious Powering Progress strategy in 2021. At the Capital Markets Day in June 2023, Shell highlighted its dual focus on delivering greater value with reduced emissions. This latest update zooms in on the strides made towards achieving “less emissions,” in line with Shell’s target of reaching net-zero emissions by 2050 across all operations and energy products. This goal aligns with the Paris Agreement’s ambitious objective to limit global warming to 1.5°C above pre-industrial levels, marking a pivotal shift in Shell’s operations towards low-carbon energy solutions.
Wael Sawan, Shell’s Chief Executive Officer, underlines the significance of energy in human development and the current need to balance energy demand with the urgent challenge of climate change. Sawan expresses confidence in the direction of Shell’s strategy, which is designed to play a vital role in both providing current energy needs and fostering the low-carbon energy system of the future. The focus on performance, discipline, and simplification, according to Sawan, ensures that Shell not only meets its climate targets but also emerges as a preferred partner and investment choice through the energy transition.
Shell’s transition strategy encompasses its entire business spectrum, emphasizing the growth of its world-leading Liquefied Natural Gas (LNG) business and the reduction of emissions from oil and gas production. The company is also increasing the sales of low-carbon energy solutions while phasing out traditional oil products. With its extensive experience as one of the world’s largest energy traders, Shell is uniquely positioned to bridge low-carbon energy supply with demand.
The company reports significant progress against its climate targets:
– By the end of 2023, Shell achieved over 60% of its target to halve emissions from its operations by 2030 compared to 2016 levels, surpassing the Oil and Gas Decarbonization Charter commitments from COP28.
– Shell continues to lead in methane emissions reduction, achieving a 0.05% methane emissions intensity in 2023, well below the targeted 0.2%.
– A 6.3% reduction in the net carbon intensity of the energy products Shell sells was achieved in 2023, marking the third consecutive year the company has met its target.
Shell’s investment of $10-15 billion between 2023 and 2025 in low-carbon energy solutions, including electric vehicle charging, biofuels, renewable power, hydrogen, and carbon capture and storage, underscores its commitment to leading in the energy transition. These investments aim to scale new technologies, making low-carbon solutions an affordable choice for customers, with Shell advocating for policies that support national net-zero ambitions and the transition to a low-carbon economy.
The strategic shift in Shell’s integrated power business reflects a focus on value over volume, with plans to build renewable power businesses in strategic locations worldwide while withdrawing from direct energy supply to European homes. This adjustment in strategy also updates Shell’s net carbon intensity target to a 15-20% reduction by 2030 compared to 2016, revising the previous goal of 20%.
As Shell continues its transparent reporting on progress towards its ambitious climate and energy transition targets, it remains steadfast in its commitment to driving decarbonization across the transport sector and beyond, aiming to significantly reduce customer emissions from oil product usage by 2030. Shell’s proactive approach in adapting its operations and investment strategies highlights its role as a leader in the global shift towards a more sustainable and low-carbon energy future.