Shell Retires 20 Million Carbon Offsets in 2023

In a significant move, Shell retired 20 million tonnes of carbon offsets in 2023, marking a substantial increase from the 4.1 million tonnes included in its 2022 net carbon intensity. Despite this, there are concerns that this action has weakened its 2030 climate goal.

Shell's Energy Transition Outlook

Carbon dioxide emissions stemming from the energy sector accounted for nearly three-quarters of global greenhouse gas emissions in 2023, as per Shell's latest report. The company acknowledges that stricter government policies could accelerate emission reductions, but even without such policies, a decline in global fossil fuel demand is expected to occur, dropping from 80% to below 70% by 2040, and potentially to 50% with a trajectory towards achieving net zero emissions by 2050. This shift will be driven by increased electrification and the expansion of renewable energy generation.

New Ambition and Targets

In its recent Energy Transition Strategy 2024 update, Shell unveiled a new ambition to reduce customer emissions resulting from the use of its oil products by 15-20% by 2030 compared to 2021 levels. Additionally, Shell reiterated its commitment to achieving net zero emissions across all operations and energy products by 2050.

CEO's Perspective

Wael Sawan, Shell’s Chief Executive Officer, emphasized the crucial role of energy in development and reiterated Shell's dedication to meeting current energy needs while building a low-carbon energy system for the future. Sawan stressed the company's focus on performance, discipline, and simplification to maximize impact throughout the energy transition.

Progress in Key Areas

Shell reported significant progress in various areas:

• Reduction in Emissions: By the end of 2023, Shell had achieved over 60% of its target to halve emissions from its operations by 2030 compared to 2016 levels.
• Methane Emissions Reduction: Shell surpassed its target by achieving 0.05% methane emissions intensity in 2023, significantly below the aimed 0.2%.
• Carbon Intensity Reduction: Shell achieved a 6.3% reduction in the net carbon intensity of energy products sold in 2023 compared to 2016, marking the third consecutive year of hitting this target.

Strategic Shifts and Investments

To support its transition to a net zero emissions energy business, Shell plans to invest $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions. This investment includes electric vehicle charging infrastructure, biofuels, renewable power, hydrogen, and carbon capture and storage technologies.

Conclusion

Shell's energy transition update reflects its commitment to reducing emissions, investing in low-carbon solutions, and driving sustainable energy practices to achieve its net zero emissions target by 2050. However, questions remain regarding the effectiveness of its recent actions in light of the revised climate goal.