Oil Giant Shell to become Carbon-Net-Zero by 2050.
Royal Dutch Shell has announced a net-zero emissions target aiming to reduce its carbon footprint exponentially by 2050.
Ben van Beurden, Shell’s Chief Executive, has stated social expectation for oil and gas firms are changing rapidly.
Shell claimed its “ambition” is to reduce emissions from their own manufacturing operations of all their products to net-zero by 2050. Its aim is ensuring carbon intensity of products sold would be cut 30% by 2035, and 65% by 2050.
Shell recently secured a $12 billion credit facility to help protect its dividend as its share price dropped by 40% since the beginning of 2020. Despite these hardships in these unprecedented times, van Beurden stated, “At this time of immediate challenge, we must also maintain the focus on the long term.”
Shell and its competitors have been grappling with low fuel and oil prices due to the Covid-19 pandemic, with demand for products becoming higher each day. Shell intends to become carbon-neutral by offsetting their emissions through using new carbon capture technologies alongside natural means; planting trees.
Van Beurden continued; “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”. These targets rely on the company shifting its business towards selling renewable energy and biofuels. It also plans to work alongside its customer base to also help reduce their carbon impact.
Many who are part of ‘Climate Change 100+’, a group of investors, have applauded Shell on their plan and acknowledged it to be a significant step in the right direction for global climate action. This group has been regularly pushing for tougher targets at Shell and its competitors, and have welcomed this change.
“It proves that the strong and committed engagement of institutional investors with Shell can help accelerate the pace of change to deliver the goals of the Paris Agreement 2016,” said the Chief Investment Officer of Robeco. “It raises the bar and sets out an approach for others in the oil and gas sector to follow.”
Shell has also disclosed that it has financially aided industry groups such as the American Petroleum Industry, a trade association that has advocated tougher environmental restrictions on oil companies for years. Shell states it has spent at least $20 million to support groups such as the latter in the fight for tougher environmental restrictions.
Shell has claimed they have spent approximately $7.3 million on lobbying practices in the US last year, and approximately €4.5 million in the EU.
They have not disclosed what the financial impact could be on the company in order to meet the new targets. But they have stated that these goals have not been reflected in current operating plans and budgets, but will be implemented soon.