Shell makes pledge to be net zero by 2050

Article by Amanda Doyle

SHELL has announced that it aims to cut emissions from its operations to net zero by 2050 or sooner, along with stepping up action to reduce the emissions produced by customers.

The plan was announced despite the current low oil prices and the challenges posed by the coronavirus, and sees Shell follow competitors BP and Repsol with a net zero target. It aims to cut emissions from its operations, including from the production of non-energy products such as chemicals and lubricants, to net zero by 2050. In addition, it will also cut its scope 3 emissions – those produced when customers burn fuel – by 30% by 2035, and 65% by 2050. This is an improvement on its previous targets of 20% and 50% respectively.

Ben van Beurden, CEO of Shell, outlined the company’s plans in a speech to investors on 16 April. He explained that the scope 3 emissions could not be cut to zero because currently there is no alternative for these products. It aims to sell fewer of these products and make more low-carbon products, but fossil fuels will still need to be produced. Because of this, said van Beurden, Shell’s customers will need to act to reduce their emissions when using Shell’s products. He said that Shell will work with customers who are still using emissions-generating products in the run up to 2050 and help them to mitigate those emissions.

He said that the biggest producer of its scope 3 emissions is the aviation industry, but that Shell would collaborate with the industry on the production of biofuels and the possibility of hydrogen-powered planes in the future.

Along with a net zero target and improved action on scope 3 emissions, Shell is also striving for greater transparency. It first published its Industry Associations Climate Review in April 2019, which assessed the company’s alignment with 19 trade associations on climate policy. Its 2020 update includes details of payments made to these associations. It spent at least US$20m in 2019, with the largest proportion going to the American Petroleum Institute (API) which is known to campaign against climate action. Shell left the American Fuel & Petrochemical Manufacturers (AFPM) last year after misalignment on climate policies that could not be resolved. It said that its climate policies are aligned with nine organisations, but only partially aligned with the nine others, including the API. BP has also left the AFPM, along with the Western States Petroleum Association (WSPA) and the Western Energy Alliance (WEA), although still supports the API.

The net zero announcement has been largely welcomed by investors. Stephanie Pfeifer, a member of the global Climate Action 100+ Steering Committee, said: “It’s imperative we see companies across the entire oil and gas sector put strategies in place to achieve net zero emission if we are to tackle climate change. This applies to the fuels and products companies sell, as well as emissions from operations. Investors will now look to other energy companies to match, and build on, the welcome ambition Shell is showing. Engagement with Shell will also continue as investors support the company in taking the steps needed to align its business with the goals of the Paris Agreement.”

However, the announcement was seen as insufficient by some activists. The day after the net zero announcement, Shell announced that it had given the go-ahead for a A$10bn (US$6.3bn) coal seam gas project in Australia. 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. This is not a net zero plan, it’s a plan to drive us deeper into climate emergency, which will continue to put lives and livelihoods at risk.”

Article by Amanda Doyle

Staff Reporter, The Chemical Engineer

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