Firm to cut carbon intensity by selling more green energy but critics say first step must be to stop new drilling
Royal Dutch Shell plans to become a net zero-carbon company by 2050 or sooner by selling more green energy to help reduce the carbon intensity of its business.
Ben van Beurden, Shell’s chief executive, said the company must focus on the long-term “even at this time of immediate challenge” caused by the Covid-19 pandemic.
“Society’s expectations have shifted quickly in the debate around climate change. Shell now needs to go further with our own ambitions, which is why we aim to be a net-zero emissions energy business by 2050 or sooner. Society, and our customers, expect nothing less,” he said.
Van Beurden told investors on Thursday that Shell would toughen its existing target to shrink the carbon intensity of its products by 50% within 30 years, to reach 65% by 2050. The plan includes an interim target to cut the so-called “scope 3” emissions by more than a third by 2030, up from 20% previously.
Shell’s target relies on the oil and gas company shifting its business towards selling clean energy products such as renewable energy and biofuels, and working alongside its “net-zero” customers to also help offset the carbon impact too.
The oil giant said it plans to work with its customers, such as major airlines, to share the burden of offsetting the carbon from fossil fuel products which may still be in use by 2050, such as jet fuels.
Adam Matthews, a director on the Church of England Pensions Board, welcomed Shell’s focus on helping to develop “net-zero pathways” for key sectors such as aviation which shape the demand for energy.
“Ultimately, it will be by developing and supporting net-zero pathways in these sectors that we will achieve the goals of the Paris agreement,” he said.
Shell plans to offset its own emissions by trapping as much carbon as its business operations cause through new carbon capture technologies or through natural solutions such as planting trees.
The tougher climate plans come two months after BP raised eyebrows by setting out an “ambition” to cut its carbon emissions to zero by offsetting more greenhouse gas emissions every year than produced by the whole of the UK.
Whereas BP’s ambitious targets include an absolute reduction in emissions, Shell has chosen to focus on the overall carbon intensity of the energy it sells, which could be lowered by selling more clean energy alternatives without reducing the amount of fossil fuels produced.
Richard George, head of Greenpeace UK’s climate campaign, said: “A credible net-zero plan from Shell would start with a commitment to stop drilling for new oil and gas.
“Instead, investors are being fobbed off with vague aspirations that don’t tackle Shell’s monstrous carbon footprint and pass the buck to Shell’s customers to offset their emissions,” he said.
BP and Shell have both faced criticism for offering only vague plans to reach their ambition. While BP offered no interim targets towards the 2050 goal, Shell has set a tougher 2035 target to help hold the company to account.
Major investors and pension funds within the Climate Change 100+ alliance applauded Shell’s plan , calling it a significant step in the right direction for global climate action.
Corien Wortmann-Kool, chairwoman of the ABP pension fund, said: “We appreciate the fact that Shell regularly evaluates and now raises its ambitions. After the earlier announcements in 2017 and 2018, Shell’s example has been followed by other oil and gas companies. We hope that this announcement will again have a domino effect.”