Shell’s ‘net zero strategy’ to invest four times as much into oil and gas exploration than into renewables

The energy giant has announced it plans to reduce oil production by ‘around 1% or 2% each year’

The Big Zero report

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Shell’s new ‘net zero strategy’ includes plans to annually invest up to $8 billion (£5.8bn) in its Upstream business, which focuses on oil and gas drilling, while investing $2-$3 billion (£1.45bn-£2.2bn) in renewables.

The energy giant says the ‘rebalancing of its portfolio’ will also see $4 billion (£2.9bn) of spending on Integrated Gas and up to $5 billion (£36bn) of investment into Chemicals and Products.

The firm claims the strategy will “accelerate its transformation into a provider of net-zero emissions energy products and services, powered by growth in its customer-facing businesses” and “deliver value for shareholders, customers and wider society”.

However, some investors seem unconvinced – when markets opened on Thursday morning, Shell’s share value dropped by almost 3%.

In its strategy, Shell states that its total carbon emissions peaked in 2018 and says oil production peaked in 2019 – it also voiced plans to reduce oil production by around 1% or 2% each year, “including divestments and natural decline”.

Royal Dutch Shell CEO Ben van Beurden said: “Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society.

“We must give our customers the products and services they want and need – products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.

“Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns.”

Shell aims to become net zero by 2050 across its operations, including the emissions from the use of the energy products it sells.

It has set out a new range of targets to reduce its net carbon intensity by between 6% and 8% by 2023, by 20% by 2030 and by 45% by 2035, compared to a baseline of 2016.

The firm said it will seek to have access to an additional 25 million tonnes a year of carbon, capture and storage (CCS) capacity by 2035 and has announced plans to use nature-based solutions to offset around 120 million tonnes of emissions a year by 2030.

Mel Evans, Head of Greenpeace UK’s Oil Campaign, said: “Shell’s grotesque ‘customer first’ strategy seeks to blame customers first for climate change.

“Without commitments to reduce absolute emissions by making actual oil production cuts, this new strategy can’t succeed nor can it be taken seriously. Shell’s plans include a delusional reliance on tree-planting.

“Communities around the world have been flooded, while others are on fire. Governments are upping their commitments on renewables, while competitors are pivoting – but Shell’s big plan is to self-destruct and take the planet down with it.”

 

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