Wat doet Shell? Acht vragen over Shell en klimaatverandering

1. Hoe verhoudt het Klimaatakkoord van Parijs zich tot deze rechtszaak en voldoet Shell aan ‘Parijs’?

Het doel van het Klimaatakkoord van Parijs is om de wereldwijde temperatuurstijging gemiddeld ‘ruim onder’ de 2° C te houden ten opzichte van pre-industriële niveaus. Bij de aanpak van die klimaatverandering ligt de nadruk op een ambitieuzere doelstelling uit het akkoord, namelijk het beperken van de wereldwijde temperatuurstijging tot 1,5° Celsius. Shell ondersteunt die ambitie.  In onze Energy Transition Strategy tonen we onder meer hoe we tot onze doelstellingen zijn gekomen waarmee we de wereld willen helpen de doelen uit het Klimaatakkoord van Parijs te halen.

De transitie naar een schoner wereldwijd energiesysteem wint aan snelheid, maar we zijn ervan overtuigd dat meer en snellere actie nodig is. Shell wil dan ook haar verantwoordelijkheid nemen en bijdragen aan de mondiale inspanning om klimaatverandering aan te pakken. Net als alle andere bedrijven, is Shell echter geen partij bij het Klimaatakkoord van Parijs. Dat is voorbehouden aan staten.

Wel werken we samen met nationale overheden om de transitie van energiesystemen te stimuleren en te versnellen. In Nederland bijvoorbeeld is aan zogeheten klimaattafels met andere belanghebbenden gekeken hoe de Nederlandse overheid haar doel kan bereiken om de uitstoot van broeikasgassen in Nederland met 80-95% te verminderen per 2050. Shell Nederland heeft in 2019 als eerste industriepartij aangekondigd het Nederlands Klimaatakkoord te steunen. Dat we de daad bij het woord voegen, mag onder meer blijken uit het feit dat we meer dan 1 miljard euro aan investeringen in de Nederlandse energietransitie hebben aangekondigd en flinke stappen zetten (zie ook vraag 3).

Dat we in hoger beroep gaan tegen de uitspraak van 26 mei 2021 in de zaak die Milieudefensie c.s. aanspande, doet niets af aan onze ambities om onze Powering Progress strategie te versnellen. Dat zal naar alle waarschijnlijkheid betekenen dat we gedurfde, afgemeten stappen moeten zetten in de komende jaren.

English translation

What are you doing? Eight questions on Shell and climate change.

1. How does the Paris Agreement apply to this case and does Shell comply with Paris?

The goal of the Paris Agreement is to keep the increase in global average temperature to well-below 2°C compared to pre-industrial levels. In tackling climate change, the emphasis is on the more ambitious goal, as laid out in the Paris Agreement, to limit the rise in average global temperature to 1.5° Celsius. Shell supports that ambition and the Shell Energy Transition Strategy published in April 2021 provides additional context and information on how Shell has calculated and set its carbon targets to be in support of the Paris agreement.

The energy transition is dynamic and gathering pace. But we believe more, urgent action is needed. Shell therefore wants to play its part and contribute to the global effort to tackle climate change. As a company, not a state, Shell is not a party to the Paris Agreement. But we are working actively with national governments to help drive and accelerate energy systems transition. For example, in the Netherlands, Shell is working with policymakers and industry representatives to help the Dutch Government meet its target of reducing greenhouse gas emissions by 80-95% by 2050. Shell Nederland was the first industrial party in the Netherlands to support the Dutch Climate Accord. Meanwhile Shell in the Netherlands has announced over one billion in energy transition investments and is taking steps towards a cleaner energy future (also see question 3).

Our appeal against the court’s verdict on May 26th 2021 in the case brought by Milieudefensie et al, doesn’t change our ambitions to accelerate our Powering Progress strategy. That is likely to mean taking some bold but measured steps over the coming years.

2. What is Shell doing to address climate change?

The energy system needs to go through a transition to limit climate change. As society moves towards a low-carbon future, we’re committed to playing our part. Shell companies globally have already invested billions of dollars in a range of low-carbon technologies, from biofuels, blue and green hydrogen and wind power, to electric vehicle charging and smart energy storage solutions. You can find our energy transition projects in the Netherlands on our New Energies map.

Shell’s target is to become a net-zero emissions energy business by 2050, in step with society’s progress in achieving the goal of the Paris Agreement on climate change. We believe our target supports the more ambitious goal of the Paris Agreement: to limit the increase in the average global temperature to 1.5°C above pre-industrial levels. It is aligned with the findings of the Intergovernmental Panel on Climate Change (IPCC) which concluded that the world must reach net-zero carbon emissions by around 2050 to limit global warming to 1.5°C and avoid the worst effects of climate change.

Shell’s current business plans will not get us to where we want to be. So, in step with society, our business is changing to provide the mix of products that our customers want. Our goal of becoming a net zero energy company means that we reduce the emissions from our activities and from our energy products, such as fuels, that we sell to our customers. It also means capturing and storing any remaining emissions using technology or balancing them by purchase of carbon credits that are invested in certified offsetting projects.

In our Powering Progress strategy we explain how we want to achieve our goal. We will, for example, invest an average of $2 billion to $3 billion annually in renewable energy and solutions to energy issues.   This also includes plans to grow our global electric vehicle (EV) charging network from more than 60,000 charge points today to around 500,000 by 2025. We aim to use our knowledge, financial resources and influence, working sector by sector, to help find meaningful solutions that support the global drive to combat climate change.

Having said this, the actions of the Shell group of companies alone cannot change the global energy mix or its impact. Energy transition requires collaborative action from society as a whole. What will really accelerate change is effective policy, investment in technology innovation and deployment, and changing customer behaviour.

3. What are you doing to contribute to the energy transition in the Netherlands and globally?

On June 28th 2019 the Dutch Climate Accord (Klimaatakkoord) was presented. Shell Nederland supports the Climate Accord, which contains a broad package of measures for sectors such as real estate, mobility, electricity, industry and agriculture. It has the active support of parties concerned and is based on the principle that reducing carbon emissions must be feasible and affordable for everyone.

In the Netherlands, we have now built around 200 fast charging points. Nationwide we offer 100% green electricity for electric driving. Moreover, we are opening hydrogen fueling stations and hope to build elektrolyzers in the Port of Rotterdam and the Eemshaven for green hydrogen production from green electricity. These hydrogen plants could reduce industry emissions and provide jobs. We have also taken our second wind farm at sea into operation and together with Eneco are on the verge of building our third. These are just a few examples in the Netherlands, more can be found in our New Energies Map. And there is more to come. We want to help build a strong economy and a cleaner energy future so we have set an ambitious set of goals in the Netherlands.

Of course, we are taking steps towards a cleaner energy future worldwide. To name a few examples: we are offering motorists globally more choices to drive electric. This includes plans to grow our global electric vehicle (EV) charging network from more than 60,000 charge points today to around 500,000 by 2025. Moreover, we are investing in for example low-carbon fuels to reduce CO₂ emissions from longer journeys. One example is biofuels, where we are already one of the world’s largest lower-carbon biofuel producers through our joint-venture, Raízen. We also know that sectors like shipping and heavy industry will be hard to decarbonise. So, we are investing to develop, and grow the market for, technologies such as blue and green hydrogen.

4. If you recognise your products contribute to climate change, how are you influencing the way they are used?

Most of our emissions come from the use of our fuels and the other energy products we sell. So, it makes sense to place our customers at the center of our energy transition strategy. It is where we can make the biggest difference. We will work with our customers to change and grow demand for low-carbon energy products and services, sector by sector, using the strength of our business relationships, knowledge and expertise.

We will increasingly offer low-carbon products and solutions, such as biofuels, charging for electric vehicles, hydrogen and renewable power, as well as carbon capture and storage and nature-based offsets. In this way, we expect to build low-carbon businesses of significant scale over the coming decade. In addition, we will drive down emissions from our own operations as we continue to provide the oil and gas products our customers need today, while at the same time helping them move to a low- and net zero-carbon future.

5. What does Shell do with the emissions from customers using its energy products?

Scenarios like those of the Intergovernmental Panel on Climate Change (IPCC) show that in the future, society will need energy products that cause emissions. Shell will therefore continue to sell such energy products. But that doesn't mean Shell can't be a net zero emissions business. Shell is working with its customers to address the emissions produced when these customers use the fuels they buy from Shell. This means working with broad coalitions of companies, governments and other parties, sector by sector, to identify and enable low-carbon pathways for each sector.

 As we get closer to 2050, we will work ever more intensely with customers who still have emissions they have not fully mitigated. The answer may come through actions they take themselves, or Shell may agree to find a way to mitigate those emissions on the customers’ behalf. We have said that after 2050 we no longer expect to sell customers unmitigated carbon energy products. The strategy is to bring power, gas, hydrogen, biofuels as well as carbon capture and storage plus nature-based solutions to the market to help our customers reduce and finally remove the carbon emissions throughout the value chain.

In the meantime, we in the Netherlands, together with our partners, are trying to be at the forefront of the energy transition by investing in hydrogen, biofuels and electrification to name a few examples.

6. Why are you continuing to invest in oil and gas production?

Overall global energy demand is expected to increase in the coming years, driven by a growing population and increased development. To sustain and improve the quality of life for everyone on the planet, the transition to a low-carbon energy future must go hand-in-hand with extending the economic and social benefits of energy access. Much more of how we live, work and play will need to be powered by low-carbon electricity, which means a lot more wind and solar producing power. But while renewable energies are growing fast, it will not be quick, cheap or easy to electrify everything.

The transition to low-carbon energy will require major changes to industrial, commercial and residential infrastructure. This will require continuously changing roles for oil and gas – alongside new energies -  and complementary approaches like carbon capture and storage and nature-based solutions. To meet ongoing demand requires continued investment. If we chose to sell certain assets, that wouldn't take away the demand. Other companies would step in to meet that demand. We believe we can have more impact by making our assets as energy efficient as possible and by increasing sales of low-carbon energy products and services.

Having said this, we believe our annual oil production peaked in 2019, and we expect our total oil production to decline by 1-2% a year until 2030. For natural gas, we expect the percentage of total production in our portfolio to gradually rise to 55% or more by 2030.

7. Why didn’t you warn people about the risks of climate change earlier?

Issues related to climate change and its potential causes and consequences have been a matter of public discourse for decades. Shell did not have unique knowledge on this topic. It was widely reported in the media, and discussed publicly by all kinds of groups, scientists, politicians, environmentalists, national governments and international groups.  The Shell group’s own position on climate change has been publicly documented for nearly three decades through publications such as our Annual Report and Sustainability Report.

8. Does Shell use trade associations to lobby against climate policy?

Shell has long advocated for sound governmental policies to address CO_₂, such as the EU Emissions Trading System. We continue to support regulation to address this, for example for direct regulation of methane emissions in the US, and proposals for net zero emissions in Europe by 2050. We recognize the importance of using our influence with industry associations in a constructive way, and consistent with our support for the goals of the Paris Agreement. Our approach is to try to look for opportunities and solutions collaboratively plus voice concern where there are core differences. In cases of material misalignment on the need to accelerate the energy transition, we will evaluate whether to discontinue the relationship.

We are also committed to transparency on this issue, which is why we were one of the first major oil and gas companies to share our positions publicly through our Industry Associations Report.