Shell’s target focuses on reducing the carbon intensity of their products rather than reducing overall emissions.
Shell, the energy company, has changed its goal to reduce emissions, due to changes in the strategy of their electricity sector, despite the urgent need to combat climate change.
Instead of aiming for a 20% reduction by 2023, Shell now aims for a smaller reduction of 15-20%. This decision allows Shell to slow down its efforts to cut emissions during a critical decade for climate action.
In 2021, Shell pledged to lower its oil production every year until 2030, starting from its peak in 2019 of 1.9 million barrels per day. It claimed to have achieved this goal in 2021 after selling its share in a major project in the Permian basin for $9.5 billion.
This sale reduced Shell’s oil production to 1.5 million barrels per day, equivalent to a reduction of 2,00,000 barrels of oil and gas production last year.
However, Shell’s target focuses on reducing the carbon intensity of their products rather than reducing overall emissions. The energy giant has watered one of its climate ambitions due to its focus on “value over volume” in the electricity sector.
Some critics like Agathe Masson from Reclaim Finances, see this change as a step backward, showing Shell’s lack of commitment to fighting climate change. Climate experts have urged fossil fuel companies like Shell to decrease the emissions produced by the energy they sell.
Climate experts have urged all fossil fuel companies to decrease the emissions associated with the energy they distribute, termed “Scope 3 emissions,” by reducing their oil and gas output.
Shell’s objectives focus on the carbon intensity of their products rather than the absolute emissions, potentially allowing for increased gas production with lower emissions intensity but a rise in total emissions as production scales.
As part of its new strategy, the oil firm plans to reduce emissions from its oil business by 15-20% by 2030 compared to 2021 levels, but there is no specific target set for reducing emissions from its gas business, which is expected to grow significantly in the coming years.
The oil major has also dropped the plan to reduce carbon intensity by almost 45% by 2035 due to “Uncertainty in the pace of change in the energy transition”.
The emissions produced by each unit of energy sold by Shell are measured by the net carbon intensity. Therefore, if it is a unit of oil, then the emissions are higher than if it is a unit of gas. So, if the company sells more gas and less oil the intensity decreases irrespective of the energy it sells.
Whereas, reducing the carbon intensity of Shell’s products doesn’t necessarily lead to an overall drop in emissions. Even if the intensity decreases, Shell could increase its sales, maintaining overall emissions at a stable o r even higher level.
Shell stated,” The primary factor in lowering our net carbon emissions is the rise in energy sales and demand.” This implies that a decrease in overall emissions is not guaranteed.
Despite calls from climate experts to stop investing in new fossil fuel projects, Shell plans to increase its oil gas production by adding 5,00,000 barrels per day by 2025.
This decision contradicts the advice that new oil and gas projects should be avoided to prevent a climate crisis.
Shell’s CEO, Wael Sawan, is set to receive a hefty paycheck of almost $10 million, drawing criticism from groups like Global Witness. Meanwhile, Shell reported a profit of over $ 28 billion in 2023 marking one of its most profitable years.
According to Sawan, the company feels that the new gas and oil projects would enable Shell to “continue providing the energy security that the world needs while delivering cash flow longevity into the future”
This move by Shell to prioritize profit over climate action has sparked protests from environmental activists, who gathered outside Shell’s headquarters in London. Despite earlier promises to reduce oil production, Shell’s decision to continue investing in fossil fuels raises concerns about its commitment to addressing climate change.