Home Commodities Shell changes climate targets as it plans to keep gas business growing

Shell changes climate targets as it plans to keep gas business growing

by SuperiorInvest

Unlock Editor's Digest for free

Shell has weakened some of its climate targets to accommodate plans to continue growing its giant gas business, even as it reaffirmed its long-term commitment to reducing net emissions to zero by 2050.

In the first shake-up of its three-year energy transition strategy, Shell said the net carbon intensity of its products would fall more slowly by 2030 than previously planned and scrapped the 2035 target entirely.

The changes reflect CEO Wael Sawan's plans to keep oil production steady and expand sales of liquefied natural gas, while being more selective about the types of low-carbon energy products it sells.

Sawan said the changes made it “more, not less, likely” that Shell would meet its goals, but the revisions are likely to provoke some criticism, particularly from groups that already thought the company was not doing enough to reduce its environmental impact.

“This is not about trying to change a trajectory, we are committed to that trajectory,” Sawan told the Financial Times. He added that over the past three years the company has learned that “the shape of the energy transition and the pace of evolution in different countries are simply uncertain.”

Shell had previously said the net carbon intensity of its energy products would fall 20 percent from 2016 levels by 2030, 45 percent by 2035 and to net zero by 2050.

Rather than a commitment to reduce the absolute emissions generated by burning fossil fuels, carbon intensity is an accounting treatment that allows Shell to offset the carbon produced by its oil and gas business with its growing sales of low-emission products. carbon.

The company is now targeting a 15 to 20 percent decline by 2030, in part because the amount of energy it sells is likely to rise more slowly due to a decision to focus on lower-volume, higher-value sales to commercial customers instead. of residential. Shell said Thursday.

The group also abandoned its 2035 target. Uncertainty over the pace and evolution of the transition meant those interim long-term targets were not useful, Sawan said, adding that Shell could introduce new targets for the 2030s later.

“The discussion has to be about… what people are doing rather than the promises that are being made.”

The company's 2021 commitment to reduce absolute emissions from its operations by 50 percent by 2030 remained unchanged, he said, adding that those operational emissions had already fallen by 31 percent.

The decision to scrap the interim 2035 target brings Shell in line with most of its rivals, many of which have only set commitments for 2030 and 2050. However, different methodologies and starting points make comparisons between companies difficult. BP has committed to reducing operational emissions by 50 percent by 2030, but that is compared to 2019 levels, rather than Shell's in 2016.

Similarly, BP is targeting a 15 to 20 percent reduction in the carbon intensity of all the products it sells by 2030, but has also committed to reducing absolute emissions from the oil and gas it produces (excluding volumes marketed) between 20 and 30 percent. percent by 2030.

Shell on Thursday unveiled a new ambition to reduce absolute emissions from the petroleum products it sells by 15 to 20 percent from 2021 levels by 2030, but intentionally excluded gas as a “critical fuel in the energy transition.” .

Its shareholders will vote on the updated strategy in May.

Mark van Baal, founder of the activist group Follow This, which has filed regular motions from Shell shareholders calling on the company to reduce emissions more quickly, immediately criticized the changes.

“This setback removes any doubt about Shell's intentions: the company wants to remain in the fossil fuel sector for as long as possible,” he said.

Even before the changes, a Dutch court had ruled that Shell's original targets were not ambitious enough, ordering the company to reduce all its emissions by 45 percent, in absolute terms, by 2030. Shell appealed the ruling and that appeal will be heard next month.

Shell's total emissions last year were 1.1 billion tonnes of CO2e, down from 1.3 million tonnes in 2021. Sawan said he hoped the court would take note of the progress Shell had already made, but reiterated Shell's view. the company that it could not reduce its emissions faster than society.

Source Link

Related Posts