Royal Dutch Shell is receiving some praise and a healthy dose of pushback after unveiling plans to become a “net-zero carbon company” by 2050.
While one major green investors’ group hailed the announcement as the farthest-reaching commitment yet by any oil and gas company, critics warned that Shell’s focus on the carbon intensity of its operations—rather than absolute carbon reductions—would lead to a dangerous reliance on unproven carbon removal technologies. “How is a reduction of 65% in the intensity of your products by 2050 compatible w net zero by 2050?” tweeted ShareAction Campaign Manager Jeanne Martin. “The [Intergovernmental Panel on Climate Change] is clear that ‘CO2 removal deployed at scale is unproven & reliance on such technology is a major risk in the ability to limit warming to 1.5°C’.”
In his announcement last week, Shell CEO Ben van Beurden—who recently and famously lamented that the colossal fossil has “no choice” but to continue exploring for oil and gas—said the company will keep its eye on long-term net carbon reductions, “even at this time of immediate challenge” due to the coronavirus pandemic.
“Society’s expectations have shifted quickly in the debate around climate change,” he declared. “Shell now needs to go further with our own ambitions, which is why we aim to be a net-zero emissions energy business by 2050 or sooner. Society, and our customers, expect nothing less.”
Van Beurden told investors last week that the company will “toughen its existing target to shrink the carbon intensity of its products by 50% within 30 years, to reach 65% by 2050,” The Guardian writes. “The plan includes an interim target to cut so-called Scope 3 emissions by more than a third by 2030, up from 20% previously.”
Bloomberg adds that Shell’s plan follows “in the footsteps of its peers BP Plc and Repsol SA, which have already set similar targets. Shell’s move indicates that, despite the turmoil caused in the industry by the coronavirus, major oil and gas companies aren’t abandoning the transition to cleaner energy.”
The Guardian explains that Shell’s target “relies on the oil and gas company shifting its business towards selling clean energy products such as renewable energy and biofuels, and working alongside its ‘net-zero’ customers to also help offset the carbon impact, too.” The company “said it plans to work with its customers, such as major airlines, to share the burden of offsetting the carbon from fossil fuel products which may still be in use by 2050, such as jet fuels.”
Shell also “plans to offset its own emissions by trapping as much carbon as its business operations cause through new carbon capture technologies or through natural solutions such as planting trees,” The UK-based paper adds.
In light of the announcement, “investors will now look to other energy companies to match, and build on, the welcome ambition Shell is showing,” said Stephanie Pfeifer, CEO of the Institutional Investors Group on Climate Change (IIGCC), a group of companies with more than €30 trillion in assets under management.
Church of England Pensions Board Director Adam Matthews agreed that Shell’s focus on developing net-zero pathways in areas like aviation was welcome. “Ultimately, it will be by developing and supporting net-zero pathways in these sectors that we will achieve the goals of the Paris agreement,” he told The Guardian. Euractiv cites the Pensions Board as lead investor in the Climate Action 100+, a group with more than US$40 trillion in assets.
But Richard George, head of Greenpeace UK’s climate campaign, said a real net-zero plan “would start with a commitment to stop drilling for new oil and gas. Instead, investors are being fobbed off with vague aspirations that don’t tackle Shell’s monstrous carbon footprint and pass the buck to Shell’s customers to offset their emissions,”
Netherlands-based investment group Follow This said Shell was taking a step in the right direction, but still falling short of the carbon reduction targets in the 2015 Paris Agreement. Bloomberg says Follow This previously filed a shareholder resolution asking the Dutch-British colossal fossil to adopt concrete targets, “but Shell on Thursday advised shareholders to vote against the plan, saying that it is ‘unnecessary’ and ‘counterproductive’.”
Oil Change International’s Andy Rowell notes that last week’s announcement “does not mean Shell kicking fossil fuels as soon as possible. It means carrying on drilling and betting on technologies like carbon capture and storage (CCS), which remain unproven at scale. We have previously exposed that a carbon footprint target is an accounting trick that allows Shell to meet its climate ambition, even if Shell increases its fossil fuel production and sales.”