The chair of energy giant Shell has said that a real move towards a decarbonised future will require a change in customer demand as a key to driving momentum.
As the company launched its Energy Transition Progress Report 2021 detailing the company’s progress over the past year Sir Andrew Mackenzie, (pic) said the company was committed to playing its part in a net zero future.
“Shell will play a leading role as the world’s energy systems change,” he said. “We will continue to supply the oil and gas that people need today. As one of the world’s largest suppliers of liquefied natural gas (LNG), we can ship natural gas to where it is needed most. At the same time, we are accelerating the transition to low- and zero-carbon energy, which is at the heart of our strategy.
“Essentially, an accelerated transition is the best way to ensure security of energy supplies. It is also the best way to help people in some parts of the world who do not yet have access to energy, which is essential for a better quality of life.”
“We firmly believe our climate targets are aligned with the more ambitious goal of the UN Paris Agreement on climate change: to limit the increase in the average global temperature to 1.5°C above pre-industrial levels,” Mackenzie added. “The actions Shell takes over the coming years, and our progress against our short- and medium-term targets, will be crucial steps to ensure that we become a net-zero emissions energy business by 2050.”
He said in the first year of Shell’s Powering Progress strategy, it has laid the foundations for success.
“We have taken critical investment decisions in the production of low-carbon fuels, solar and wind power, and hydrogen. We have made significant changes to our Upstream and refinery portfolios, we reshaped the organisation and we simplified the company and its share structure. We have formed partnerships with some of the world’s biggest companies in sectors from aviation to road transport and technology.
“In 2021, we added an ambitious new target to halve absolute emissions from our operations and the energy we buy to run them by 2030 (Scope 1 and 2), compared with 2016 levels and on a net basis. We are well on our way with an 18% reduction by the end of 2021.”
Shell estimate that global energy, and fossil-related CO2 emissions, actually rose by 2.4% in the period between the end of 2016 and the end of 2021, based on International Energy Agency (IEA) and other data.
“We believe that for the world to decarbonise, a dramatic change in demand for energy is just as critical as changes to supply,” added Mackenzie. “That is why an essential part of Shell’s strategy is working with our customers across different sectors to reduce emissions.
“We are helping our customers to identify and use low- and zero-carbon alternatives to the energy products they have used for many decades: renewable electricity and hydrogen to power homes, cars, trucks, businesses, and industry; biofuels for cars, trucks and planes; LNG for power, trucks and ships; and carbon capture and storage and nature-based carbon offsets to deal with any remaining emissions.
“This is not only the right approach for the world. It also makes good business sense. We see great business opportunities for Shell in the fast-growing low- and zero-carbon markets where we are well positioned to provide the different products and solutions our customers need.”
His views were backed by the company’s CEO, Ben van Beurden, who added: “In a time of great uncertainty, it is vital that our long-term energy transition strategy remains on track.
“This report shows the strong progress we have made towards our target to become a net-zero emissions energy business by 2050.”
Last year, the company set a new target to reduce absolute emissions from its operations and the energy it uses to run them by 50% by 2030, compared with 2016 on a net basis. By the end of 2021, Shell had made a reduction of 18%.
Shell said it had achieved its short-term target to reduce the net carbon intensity of the energy products it sells by 2-3% by the end of 2021, compared with 2016 as well. The company announced it is now working towards a 9-12% reduction in net carbon intensity by 2024, and a 20% reduction by 2030, both compared with 2016.