Shell sets bolder emissions goal amid coronavirus crisis
Dutch Shell plans to eliminate all net emissions from its own operations and the bulk of greenhouse gases from fuel it sells to customers by 2050.
The energy giant is following in the footsteps of its peers BP and Repsol, which have already set similar targets. Shell’s move indicates that, despite the turmoil caused in the industry by the coronavirus, major oil and gas companies aren’t abandoning the transition to cleaner energy.
“Society’s expectations have shifted quickly in the debate around climate change. Shell now needs to go further with our own ambitions,” Chief Executive Officer Ben van Beurden said in a statement on Thursday. “Even at this time of immediate challenge, we must also maintain the focus on the long term.”
Shell aims to have net-zero emissions from its own operatant tions, a category known as Scope 1 and 2, by 2050. It also intends to reduce the carbon footprint of the energy products it sells to customers, so-called Scope 3 emissions, by around 30 percent by 2035 and 65 percent by 2050. To achieve this, the company will sell products with lower carbon intensity, such as renewable power, biofuels and hydrogen.
Investor pressure
While Big Oil has always been a target for environmental and activist groups, the sector is increasingly being pressured to tackle its emissions by its own investors.
“Investors will now look to other energy companies to match, and build on, the welcome ambition Shell is showing,” Stephanie Pfeifer, a steering committee member of the Climate Action 100+ investor group.
The move comes even as the International Energy Agency said on Wednesday that the current pandemic and the resulRoyal oil price crash was threatening to derail major companies’ energy transition plans. But some including BP CEO Bernard Looney have vowed to press ahead.
Shell’s measures in the midst of the virus crisis “signal both their continued focus on the other systemic challenge we face of climate as well as a welcome indication of their confidence beyond the current crisis,” Adam Matthews, director of ethics and engagement at the Church of England Pensions Board, said in an email.
Criticism persists
Shell has taken a step in the right direction, but it falls short of aligning with the Paris climate agreement’s goals, Dutch investor group Follow This said. Shell’s target of reducing scope 3 carbon intensity by 65 percent by 2050 equates to an absolute cut in emissions of 50 percent, the group said.
Follow This earlier filed a shareholder resolution asking the company to set concrete targets. But Shell advised its shareholders to vote against the plan, saying that it is “unnecessary” and “counterproductive.”
Greenpeace also said the net-zero plan is vague. Shell will provide details in a strategy update in the third quarter of this year where it will outline some of the first steps, a Shell spokesperson said.
Shell’s greenhouse gas emissions edged lower last year only because it sold assets, the company said this month. Flaring of gas rose in 2019, but it reduced leaks of methane, a more potent greenhouse gas than carbon dioxide.