Shell will continue its drive to halve emissions from its
operations (Scope 1 and 2) by 2030, compared with 2016 on a net
basis. By the end of 2023, Shell had achieved more than 60% of
this target. Shell also reduced the net carbon intensity of the
energy products it sells by 6.3% compared with 2016, the third
consecutive year it hit its target.
To help drive the decarbonisation of the transport sector, Shell
has set a new ambition to reduce customer emissions from the use
of its oil products by 15-20% by 2030 compared with 2021 (Scope
3, Category 11).¹
Shell confirms it will invest $10-15 billion between 2023 and the
end of 2025 in low-carbon energy solutions, making Shell a
significant investor in the energy transition.
Shell plc (Shell) has published its first energy transition
update since the launch of its Powering Progress strategy in
2021. At our Capital Markets Day in June 2023, we outlined how
our strategy delivers more value with less emissions, emphasising
the “more value” part. In this energy transition update, we are
focusing on how the same strategy delivers “less emissions”.
Our target to achieve net-zero emissions by 2050 across all our
operations and energy products is transforming our business. We
believe this target supports the more ambitious goal of the Paris
Agreement to limit global warming to 1.5°C above pre-industrial
levels. Shell’s strategy supports a balanced and orderly
transition away from fossil fuels to low-carbon energy solutions
to maintain secure and affordable energy supplies.
“Energy has made an incredible contribution to human development,
allowing many people around the world to live more prosperous
lives. Today, the world must meet growing demand for energy while
tackling the urgent challenge of climate change. I am encouraged
by the rapid progress in the energy transition in recent years in
many countries and technologies, which reinforces my deep
conviction in the direction of our strategy,” said Wael Sawan,
Shell’s Chief Executive Officer.
“Shell has a very important role to play in providing the energy
the world needs today, and in helping to build the low-carbon
energy system of the future. Our focus on performance, discipline
and simplification is driving clear choices about where we can
have the greatest impact through the energy transition and create
the most value for our investors and customers. We believe this
focus makes it more, not less, likely that we will achieve our
climate targets. By providing the different kinds of energy the
world needs, we believe we are the investment case and the
partner of choice through the energy transition,” said Sawan.
Our energy transition plans cover all our businesses. Liquefied
natural gas (LNG) is a critical fuel in the energy transition,
and we are growing our world-leading LNG business with lower
carbon intensity. We are cutting emissions from oil and gas
production while keeping oil production stable, and growing sales
of low-carbon energy solutions while gradually reducing sales of
oil products such as petrol, diesel and jet fuel. As one of the
world’s largest energy traders, we can connect the supply of
low-carbon energy to demand, as we have done for many years with
oil and gas.
We have made good progress against our climate targets:
- By the end of 2023, we had achieved more than 60% of our
target to halve emissions from our operations by 2030, compared
with 2016. This goes above and beyond the targets set by
signatories to the Oil and Gas Decarbonization Charter agreed at
COP28.
- We continue to be an industry leader in reducing methane
emissions. We were one of the first companies to set a target to
achieve near-zero methane emissions by 2030. In 2023, we achieved
0.05% methane emissions intensity – significantly below our
target of 0.2%. And in 2023 we also contributed to the World
Bank’s Global Flaring and Methane Reduction Fund – further
supporting industry-wide action to drive down methane emissions
and flaring.
- In 2023, we achieved our target to reduce the net carbon
intensity of the energy products we sell, with a 6.3% reduction
compared with 2016 – the third consecutive year we hit our
target.
As Shell transforms into a net-zero emissions energy business, we
aim to take the lead in the energy transition where we have
competitive strengths, see strong customer demand, and identify
clear regulatory support from governments. To help drive the
decarbonisation of the transport sector, we have set a new
ambition to reduce customer emissions from the use of our oil
products by 15-20% by 2030 compared with 2021 (Scope 3, Category
11).¹
Our focus on where we can add the most value has led to a
strategic shift in our integrated power business. We plan to
build our power business, including renewable power, in places
including Australia, Europe, India and the USA, and have
withdrawn from the supply of energy directly to homes in
Europe.
In line with this shift to prioritising value over volume in
power, we will focus on select markets and segments. This
includes selling more power to commercial customers, and less to
retail customers. Given this focus on value, we expect lower
total growth of power sales to 2030, which has led to an update
to our net carbon intensity target. We are now targeting a 15-20%
reduction by 2030 in the net carbon intensity of the energy
products we sell, compared with 2016, against our previous target
of 20%.
We will continue to transparently report our progress against our
targets and ambitions every year.
Driving towards a net-zero future
We are investing $10-15 billion between 2023 and the end of 2025
in low-carbon energy solutions, making us a significant investor
in the energy transition. And in 2023, we invested $5.6 billion
on low-carbon solutions, more than 23% of our total capital
spending.
These investments include electric vehicle charging, biofuels,
renewable power, hydrogen and carbon capture and storage. Our
investments in new technologies are helping to reduce emissions
for Shell and our customers. We aim to help scale new
technologies to make them an affordable choice for our customers
and are focusing our advocacy on key areas which we believe are
critical to the energy transition: policies that support national
net-zero ambitions including carbon pricing, supplying the secure
energy the world needs, driving changes in demand and growing
low-carbon solutions.
¹Customer emissions from the use of our oil products (Scope 3,
Category 11) were 517 million tonnes carbon dioxide equivalent
(CO₂e) in 2023 and 569 million tonnes CO₂e in 2021.
Notes to editors
- For full details of updates to our climate targets, ambitions
and performance please read the full report, online here (PDF, 12
MB).
- Shareholders will have an advisory vote on the Energy
Transition Strategy at Shell’s 2024 AGM.
- Shell’s net carbon intensity is the average intensity,
weighted by sales volume, of the energy products sold by Shell.
It is tracked, measured and reported using our Net Carbon
Footprint (NCF) methodology.
- We have set a new ambition to reduce customer emissions from
the use of our oil products by 15-20% by 2030 compared with 2021
(Scope 3, Category 11). That is more than 40% compared with 2016
reported emissions. Customer emissions from the use of our oil
products (Scope 3, Category 11) were 517 million tonnes carbon
dioxide equivalent (CO₂e) in 2023, 569 million tonnes CO₂e in
2021 and 819 million tonnes CO₂e in 2016. Of the 40% reduction by
2030, around 8 percentage points are related to volumes
associated with additional contracts being classified as held for
trading purposes, impacting reported volumes from 2020 onwards.
- Reducing the net carbon intensity of the products we sell
requires action by both Shell (Scope 1 and 2 emissions) and our
customers (Scope 3 emissions). While we can encourage the uptake
of low-carbon products and solutions, we cannot control the final
choices customers make. Support from governments and policymakers
is essential to create the right conditions for changes in
demand. In 2023, we invested $5.6 billion in low-carbon energy
solutions, more than 23% of our total capital spending. This
includes the acquisition of Nature Energy, which makes Shell one
of the largest producers of renewable natural gas in Europe. And
our ongoing investment in Sprng Energy, one of India’s leading
renewable power platforms, demonstrates our determination to
invest in growing renewable capacity in areas that play to our
strengths and add most value. We are also pioneering efforts to
scale up low-carbon solutions, such as by starting construction
in late 2022 of Holland Hydrogen 1 in Rotterdam, which is
anticipated to become one of the largest renewable hydrogen
plants in Europe.
- Find out more about Shell’s 2023 Capital Markets Day
online here.
