Our Response to Climate Change
Tackling climate change while meeting the world’s energy needs is one of the greatest challenges faced by society. Shell fully supports the goals of the Paris Agreement and the UK Government’s ambitious target of net zero emissions by 2050.
Tackling climate change
By 2050 the number of people on the planet is forecast to grow to 9 billion - that’s nearly 2 billion more of us than today. Experts agree that global energy demand is likely to double by 2050 compared to demand in the year 2000. At the same time, tackling climate change caused by carbon dioxide (CO2) emissions and other environmental stresses has never been more important. This is why we need both more and cleaner energy.
In 2015, governments took a great stride forward when they reached an agreement in Paris to tackle climate change by limiting the rise in global average temperatures this century to well below two degrees Celsius above pre-industrial levels.
In the UK, Shell provided input to the Committee for Climate Change’s 2019 Report which recommended that net zero emissions should be achieved in the UK by 2050. The Government has subsequently accepted this recommendation and, on 27 June 2019, it became law, making the UK the first G7 country to pass such a law.
Achieving this goal is possible but it will require unprecedented collaboration between Government, business and society.
Energy sources across industry and transport as well as in homes will need to transition to low-carbon options. But this will not and cannot happen overnight. The switch to lower carbon energy sources will require huge changes to existing infrastructure and will take time and significant investment.
We recognise the significance of climate change along with the role energy plays in helping people achieve and maintain a good quality of life. A key role for society – and for Shell – is to find ways to provide much more energy while limiting the amount of carbon dioxide produced.
Shell’s Net Carbon Footprint Ambition
Globally we have set ourselves a long-term ambition to reduce the Net Carbon Footprint (NCF) of the energy products we sell. This is a measure of carbon intensity, expressed in grams of carbon dioxide equivalent per megajoule consumed.
Our aim is to reduce our global NCF by around 20% by 2035, and by around 50% by 2050. And we have linked our near-term targets to executive pay.
Achieving our ambition starts with ensuring our operations use energy as efficiently as possible. But this covers less than 15% of the greenhouse gas associated with our energy products. The rest are caused when customers use our products: by driving their cars, for example.
To play our part, we have started to offer customers more low-carbon products and services. In the UK this includes offering renewable electricity as standard to our Shell Energy customers and supporting the expansion of Electric Vehicle infrastructure. Shell is working across the energy system to trial and deploy solutions that will help accelerate the energy transition across the entire economy – in power, transport, buildings and industry.
Our NCF ambition underpins our decision to explore opportunities in renewable power and new fuels such as electric vehicles and hydrogen and over time it could radically change our portfolio and the products we offer customers.
Our investment in New Energies
We have invested billions of dollars in a range of low-carbon technologies, including biofuels, CCS, hydrogen and wind power that will all be necessary to enable the transition to a lower carbon energy future. In 2016, we set up a global New Energies business to better focus these efforts and explore commercial opportunities in new and fast-growing segments of the energy industry. We are seeking opportunities that build on our strengths and we expect our capital investment in new energies to be $1 - $2 billion on average per year until the end of the decade.
Listening to society
Every year in the UK we engage in an active programme of events to listen to other industries, governments and those who challenge and expand our thinking. As an example, you can listen to our Energy Transition Manager, Jo Coleman, speaking on a Spectator podcast, read a speech by our Country Chair, Sinead Lynch, given in May 2019 to the British Institute of Energy Economists, or read about the discussions that took place at our Powering Progress Together Forum. To keep up to date with Shell UK’s views on the energy transition you can follow our Country Chair Sinead Lynch on LinkedIn, or join the conversation on Twitter.
Carbon pricing and negative emissions
Shell is encouraging governments to put a price on carbon. This aims to incentivise industry, the power sector and consumers to improve energy efficiency, reduce carbon emissions and help encourage projects such as Carbon Capture and Storage (CCS) facilities and nature-based solutions .These comprise all activities related to the protection, creation or redevelopment, of natural ecosystems – such as forests, grasslands and wetlands – to help absorb greenhouse gases from the atmosphere. They can help deliver many other benefits, including improvements in biodiversity, water quality, flood protection and livelihoods.
Today, oil and gas meet two thirds of the UK’s energy needs and will remain essential sources of energy well into the second half of the century.
But continuing to produce oil and gas does not mean the UK cannot also meet its climate change goals. Today the UK produces around 50% of the oil and gas it uses, relying on imports for the rest. Even with the combined efforts of industry and government to maximise economic recovery from the North Sea, UK production of oil and gas is likely to decline over the coming decades, in line with the reduction needed to deliver the UK’s climate change goals.
In the meantime, Shell will continue to invest in oil and gas because, as the recent report from the Committee on Climate Change shows, the UK will still need all the oil and gas it produces by the middle of the century - to fuel heavy road transport, ships, aircraft, to produce cement and steel. As yet, these are all areas where there are few low-carbon solutions, so change will take time.
Shell is also investing in Carbon Capture and Storage (CCS) projects, which use a combination of technologies to capture and store carbon dioxide deep underground.
In the UK, Shell is part of a group of companies studying the feasibility of building one of the first CCS projects in the country. The project is linked to a planned new gas-fired power station in Teesside, with the aim of decarbonising industries in the area. In the first instance, the plant would capture CO2 from the gas plant and transport it by pipeline into depleted oil and gas reservoirs in the North Sea.
One of the ways we explore what the future energy system might look like is by developing scenarios. These scenarios help inform our strategy.
We have been developing energy-focused scenarios for almost 50 years, helping generations of Shell leaders, academics, governments and business leaders to consider possible pathways when making decisions. These scenarios stretch our thinking and help us make crucial choices as we grapple with tough energy and environmental challenges.
In 2018, we published our Sky scenario which illustrates a technically possible but challenging pathway for society to achieve the goals of the Paris Agreement. It is intended to be both an ambitious scenario and a realistic tool to inform dialogue.
What is Shell's Net Carbon Footprint ambition?
Title: 0226_RadleyYeldar_Shell_NCF_13 (1)
Duration: 1:54 minutes
This video gives a brief introduction to Shell’s net carbon footprint ambition and commitment to adapting technologies for reducing global emissions.
0226_RadleyYeldar_Shell_NCF_13 (1) Transcript
[Background music plays]
The Sound of Shell adaptation.
Shell’s purpose is to provide more and cleaner energy as the world’s demand continues to grow.
Whoosh sound effects.
Fade in from white, a sea horizon appears from centre-screen, rapidly expanding. Travelling towards, then between, two rows of wind turbines either side of an offshore oil rig in the centre. All features are shades of white or grey, except for the sea and sky, which are shades of blue. Passing close over the top of the rig, slowing down over the towers and silos, then moving on towards an urban shoreline where we pass over grey, featureless buildings and then between the illuminated skyscrapers of a city skyline.
At the same time, society is moving towards a lower carbon energy system to tackle climate change and meet the goal of The Paris Agreement.
The Paris Agreement Keeping the increase in global temperature to well-below 2°C
Speeding up once more, leaving the city behind, travelling along a road flanked on either side by blue photovoltaic cells, following a red car driving towards Paris. Accelerating over the top of the car, the road now flanked by green and grey-shaded trees, and passing over the top of the city, slowing to zoom in on the Eiffel Tower. The city is white, except for green and blue areas indicating vegetation and water.
Today’s energy system includes increasing amounts of renewables, but it still largely relies on fuels that release greenhouse gases. This reliance needs to change.
Global energy system
Wind Nuclear Solar
Coal Natural Gas Oil
The Paris city scene exits at lower frame, and text transitions in to display against a white background. Below the title, six icons expand into frame, to display in two rows with descriptive text below each icon, all slowly rotating or pulsing animatedly. Larger icons displaying in the top row are a wind turbine, an atom and a photovoltaic solar panel, indicating wind, nuclear and solar. Smaller icons displaying in the lower row are a lump of coal, a blue flame and an orange drop, indicating coal, natural gas and oil. Next, the top row of icons reduce in size, and the animated green circles around the wind and solar icons fade out; the lower row of icons expand in size and are encircled by animated red and orange rings.
Shell is a large company, providing some 3% of the world’s energy, we want to play our part.
3% of the world’s energy
The previous text and icons sequence reduces and exits at centre frame, while at the same time, an earth globe graphic contracts to fill centre frame, land indicated by green shading, and water by blue, with white lines of latitude and longitude intermittently traversing the globe. Text displays above the slowly rotating globe graphic, which is set against a grey grid-lined background.
This is what’s behind our net carbon footprint ambition to reduce the carbon intensity of our energy products, in step with society’s progress towards meeting the goal of the Paris Agreement.
Net Carbon Footprint Ambition
Around 20% by 2035 to around 50% by 2050
The globe graphic with text exits at top of frame, and an animated sequence slides up into frame. We slowly pan sideways over a bank of photovoltaic solar panels in the foreground, while in the background we see the white and grey outlines of an industrial power plant, and numerous wind turbines reaching up into a blue sky. Text displays at centre frame. In lower frame, while continuing to pan over the bank of solar panels, five white circles successively appear in a row, all encircled in red.
Our net carbon footprint includes the emissions associated with the energy products we sell.
Net Carbon Footprint
Production Transport Refining Distribution End-use
Use of carbon sinks
We speed up while panning over the solar panels, and as this scene exits at frame-left and the text exits at top of frame, the five circles expand to fill centre-frame in a staggered way, forming two rows of two and three circles respectively, and icons expand to fill each circle, while descriptive text displays below each circle. The icons are an oil platform, a vessel, a refinery, a fuel tanker and a blue and orange flame. Lines with animated arrows indicating flow direction connect each circle to the next one, forming a flow diagram. Title text displays at top of frame, and a ribbon of text moves across lower frame, then exiting at frame-right.
Around 15% of those emissions are caused by getting our products to customers, including during production, manufacture and transportation.
15% of emissions
Production Transport Refining Distribution
New title text at top of frame replaces the prior title. The fifth circle from the previous scene exits at frame-right, and the remaining four circles expand to fill the space. Again, the grey-shaded icons within the circles are of the oil platform, vessel, refinery and fuel tanker. The lines linking each circle to the next continue to indicate flow direction with animated arrows moving along the lines.
The remaining 85% of emissions are generated by our customers when they use our energy products.
85% of emissions
Car engine starting.
The previous sequence exits at frame-left, and a graphic slides over into frame-left, shaded predominantly in white and grey. The graphic is a close-up of a steering wheel, dashboard and ignition with blue key inserted. Text displays against a yellow background at frame-right, while the remaining background in upper and lower frame-right is shaded in blue. A hand appears in frame, stretching towards the ignition to turn the key. We see the red needles on the dashboard dials change position as the vehicle starts.
So our ambition includes those emissions too.
The previous sequence exits at frame-left, revealing a high angle view of cars on a road, flanked this time by intermittent petrol pumps, leading towards a city on the horizon. The graphics are again predominantly white and grey shaded, and the sky above indicated in blue. We pass over the tops of the two lanes of vehicles, the angle on the scene lowering to a street view.
Achieving our net carbon footprint ambition will mean making our operations more efficient. It will also mean changing the mix of what we sell.
The previous sequence exits lower frame, and another sequence enters upper frame, with consistent shading. This time, we see a panning bird’s eye view of an industrial plant, with red clouds rising from the plant into the blue sky, each labelled “CO2”. We pull back on the bird’s eye view of the plant, revealing the shoreline once more, and as we pull back over the ocean, we pass over the top of the storage tanks of a carrier vessel out in the ocean until we have a wide side view of the vessel in the ocean.
More cleaner burning, lower carbon natural gas.
We continue to pull back on an ever wider view of the carrier vessel in the ocean.
More renewable energy and more biofuels.
The previous sequence exits at frame-left, and another enters at frame-right, depicting a car parked at a Shell Recharge station, the charging plug stretching across and plugging into the car’s fuel port.
We will also store away more emissions underground.
Carbon capture storage
2000m CO2 Storage
The previous sequence exits lower frame, and another enters upper frame, while title text displays in upper frame-left. The sequence depicts a bird’s eye view of a power plant with a cutaway of the ground beneath, revealing substrata represented by different colours. Beneath the top layer, we have a light pink, a yellow and a grey-shaded layer. The middle yellow layer is dotted with red, and a red line and text indicate that the layer extends to over 200 metres below the surface. Three vertical channels run from the power plant on the surface through each successive layer and into the grey-shaded layer, labelled as “Storage”. Dotted lines indicate direction of flow from the surface, down the channels and through the substrata, into the lower layer, while text beside each channel labels this as “CO2” flow. One of the dotted lines shows the CO2 flow as moving down through the channel, along the storage layer, and then exiting at lower frame as it moves even deeper.
And invest in forests and wetlands which absorb carbon dioxide from the atmosphere.
We pull back on the previous animated sequence, and it recedes into the distance and disappears as we speed through and over a vast expanse of green trees and green-shaded vegetation, past rotating wind turbines and banks of photovoltaic solar panels flanked by buildings.
Our net carbon footprint ambition will mean changing what we sell over time. And the Shell of the future could be a radically different company as a result.
We continue to pull back over the banks of photovoltaic solar panels flanked by buildings, and we now see the green trees and vegetation at the horizon. We pull further back over a forested, mountainous area, and then out over the ocean, where we see a bird’s eye view of a carrier vessel in the ocean, before contracting and transitioning to a white background.
Shell brand mnemonic plays on keys.
Shell Pecten centred on a white background.
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