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Shell weakens 2030 carbon emissions reduction target
Summary
- Shell scales back 2030 emissions target
- Scraps 2035 target
- Introduces target to cut emissions from oil product sales
(Reuters) – Shell weakened its 2030 carbon reduction target and scrapped a 2035 objective, citing expectations for lower power sales and strong demand for gas in the energy transition even as it affirmed a plan to cut emissions to net zero by 2050.
The changes to the targets are a central pillar in CEO Wael Sawan’s strategy revamp to focus on higher-margin projects, steady oil output and growth in production of natural gas in order to boost returns.
Rival BP made a similar move last year, rowing back on oil production and emission reduction targets, in the face of growing investor pressure on the companies to boost returns.
In an annual update on its energy transition strategy on Thursday, Shell said it will target a 15-20% reduction in net carbon intensity of its energy products by 2030 compared with 2016 intensity levels. It had previously aimed for a 20% cut.
Measuring emissions by intensity means a company can technically increase its fossil fuel output and overall emissions while using offsets or adding renewable energy or biofuels to its product mix.
Shell said that it believed gas, and liquefied natural gas in particular, will play a critical role in the energy transition by replacing more polluting carbon in power plants. At the same time, it expects its power sales, which include renewable power, to be lower than previously forecast.
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