• Shell will continue its drive to halve emissions from its operations (Scope 1 and 2) by 2030, compared with 2016 on a net basis. By the end of 2023, Shell had achieved more than 60% of this target. Shell also reduced the net carbon intensity of the energy products it sells by 6.3% compared with 2016, the third consecutive year it hit its target.
• To help drive the decarbonisation of the transport sector, Shell has set a new ambition to reduce customer emissions from the use of its oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11)
• Shell confirms it will invest $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, making Shell a significant investor in the energy transition.

Shell Publishes Energy Transition Update

Shell plc (Shell) published its first energy transition update since launching its Powering Progress strategy in 2021. Their Capital Markets Day in June 2023 outlined how the strategy delivers more value with less emissions, with an emphasis on the “more value” aspect. This update focuses on how the same strategy achieves “less emissions.”

Shell’s target of achieving net-zero emissions by 2050 across all operations and energy products is transforming the business. The company believes this target aligns with the more ambitious goal of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels. Shell’s strategy supports a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.

“Energy has made an incredible contribution to human development, allowing many people around the world to live more prosperous lives. Today, the world must meet growing demand for energy while tackling the urgent challenge of climate change. I am encouraged by the rapid progress in the energy transition in recent years in many countries and technologies, which reinforces my deep conviction in the direction of our strategy,” said Wael Sawan, Shell’s Chief Executive Officer.

“Shell has a very important role to play in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future. Our focus on performance, discipline and simplification is driving clear choices about where we can have the greatest impact through the energy transition and create the most value for our investors and customers. We believe this focus makes it more, not less, likely that we will achieve our climate targets. By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition,” said Sawan.

Shell’s energy transition plans encompass all its businesses. Liquefied natural gas (LNG) is considered a critical fuel in the energy transition, and the company is growing its world-leading LNG business with lower carbon intensity. Shell is cutting emissions from oil and gas production while keeping oil production stable, and growing sales of low-carbon energy solutions while gradually reducing sales of oil products such as petrol, diesel, and jet fuel. As one of the world’s largest energy traders, Shell can connect the supply of low-carbon energy to demand, as it has done for many years with oil and gas.

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The company has made good progress against its climate targets:

• By the end of 2 023, Shell achieved more than 60% of its target to halve emissions from its operations by 2030, compared with 2016. This surpasses the targets set by signatories to the Oil and Gas Decarbonization Charter agreed at COP28.
• Shell continues to be an industry leader in reducing methane emissions. It was one of the first companies to set a target to achieve near-zero methane emissions by 2030. In 2023, it achieved 0.05% methane emissions intensity – significantly below its target of 0.2%. Additionally, in 2023, Shell contributed to the World Bank’s Global Flaring and Methane Reduction Fund, further supporting industry-wide action to drive down methane emissions and flaring.
• In 2023, Shell achieved its target to reduce the net carbon intensity of the energy products it sells, with a 6.3% reduction compared with 2016 – the third consecutive year it hit its target.

As Shell transforms into a net-zero emissions energy business, it aims to take the lead in the energy transition where it has competitive strengths, sees strong customer demand, and identifies clear regulatory support from governments. To help drive the decarbonisation of the transport sector, Shell has set a new ambition to reduce customer emissions from the use of its oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11).

Shell’s focus on where it can add the most value has led to a strategic shift in its integrated power business. The company plans to build its power business, including renewable power, in places like Australia, Europe, India, and the USA, and has withdrawn from the supply of energy directly to homes in Europe.

In line with this shift to prioritizing value over volume in power, Shell will focus on select markets and segments. This includes selling more power to commercial customers and less to retail customers. Given this focus on value, Shell expects lower total growth of power sales to 2030, which has led to an update to its net carbon intensity target. The company is now targeting a 15-20% reduction by 2030 in the net carbon intensity of the energy products it sells, compared with 2016, against its previous target of 20%.