Shell claims “strong progress” towards net zero

Shell recently published its Energy Transition Progress Report 2021 detailing the company’s progress over the past year; This report will be put to shareholders for an advisory vote at the Annual General Meeting on 24 May 2022.

“In a time of great uncertainty, it is vital that our long-term energy transition strategy remains on track,” said Ben van Beurden, Shell’s Chief Executive Officer. “This report shows the strong progress we have made towards our target to become a net-zero emissions energy business by 2050.”

This progress includes critical investment decisions in the production of low-carbon fuels, solar and wind power, and hydrogen, and significant changes to Shell’s Upstream and refinery portfolios. The company has also simplified its share structure and moved its headquarters from the Netherlands to the UK.

In 2021, Shell continued to work with customers across sectors, from aviation to marine and road freight, forming more than 50 collaborations with other leading companies.

In the report, Shell states that its strategies include:

• Developing alternative zero- and low-carbon solutions to traditional fuels, including biofuels, hydrogen, and other zero- and low-carbon gases
• Addressing any remaining emissions with decarbonisation solutions such as carbon capture and storage and nature-based solutions

The report also shows Shell’s progress against concrete climate goals. 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 also 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 is now working towards a 9-12% reduction in net carbon intensity by 2024, and a 20% reduction by 2030, both compared with 2016.

“We plan to reduce annual spending on exploration to around $1.5 billion between 2021 and 2025,” stated the company in the report. “We do not anticipate any new frontier exploration entries after 2025.”

Shell’s energy transition strategy was put to an advisory shareholder vote at the Annual General Meeting in 2021 where it secured around 89% of the vote. This year, Shell is asking shareholders to vote on its progress, as it will do every year until 2050. The vote on progress is purely advisory and not binding on shareholders. “We are helping our customers to identify and use low- and zero-carbon alternatives to the energy products they have used for many decades,” said Andrew Mackenzie, Shell Chair. “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.”