Publication In-depth: Royal Dutch Shell plc (Shell) climate vote
Shell released its climate transition plan, which sets out its emission reduction targets and decarbonisation strategy—read ACCR's in-depth analysis.
Is Shell serious about its climate transition plan?
- Shell’s 2030 climate commitments. By 2030 Shell has committed to decrease the intensity of its emissions (energy business only) by 20%, and reposition its business away from oil, towards gas and chemicals, and renewables and marketing. It plans to achieve this by expanding gas production (20% by 2025), renewable electricity and EV infrastructure, increasing biofuels and hydrogen (blue and green), and with significant use of nature-based offsets (NbS) and carbon capture and storage (CCS).
- How feasible is Shell’s use of abatements? Shell plans to use 120 Mt NbS p.a by 2030 and 25Mt CCS p.a by 2035. This amount of NbS is greater than the size of voluntary offsets traded in 2019 (104Mt), and equates to a non-conifer forest the size of Washington State (which needs to be mature by 2030). Its CCS ambitions are similarly difficult, today there is 40Mt of CCS operational globally, and only 15% is stored geologically, most is attributable to Shell’s Gorgon JV where its CCS is not currently working.
- Abatements could get Shell halfway to its 2030 emission intensity target. Shell aims to reduce the carbon intensity of its business from 78 to 63g CO2e/ MJ from 2019 to 2030. If Shell had implemented its CCS and NbS goals in 2019, they would provide 50% of Shell’s required reduction (chart below). This highlights the vulnerability of Shell’s targets if it is unable to implement NbS and CCS in the timeframe it plans, and shows the actions to reposition Shell’s business (even in the current high level form) are not the predominant driver of 2030 targets.
- Is Shell’s 2030 target Paris-aligned? No. Shell will not reach the carbon intensity required under Transition Pathways Initiative’s below 2 °C pathway for oil and gas, missing the 2030 target by 32%. Carbon Tracker has found that at least 66% of Shell’s capex is outside a beyond 2 °C scenario.
Shell’s climate vote should assess the credibility of its plan in the next 10 years, and genuine action is lacking.
Download our full analysis.