Shell curbs emissions despite renewed gas, liquids commitments

| By Darrell Stonehouse

Shell plc has made sustained progress cutting emissions in recent years, though a commitment to maintain oil production through to 2030 could make reaching its short-term emissions targets a challenge.

Scope 1 and 2 emissions fell from 72 million tonnes of CO2e in 2016, the baseline year, to 51 million tonnes by 2022, Evaluate Energy data shows.

Net emissions intensity has also dropped — down 3.8 per cent in 2022, with a further six to eight per cent reduction projected in 2023 — a trend expected to accelerate in the decade ahead on the road to net zero.

The company says it is committed to achieving net zero emissions status by 2050.

Shell’s chief executive officer Wael Sawan updated investors on the group’s strategy during a June capital markets day, calling for “more value with less emissions” as it seeks to balance the need to supply secure energy and deliver investor returns, while it transitions to a low-carbon future.

The company recorded output of 1.5 million bbls/d during the first quarter of 2023 and sees this holding steady through to 2030.

Sawan also flagged Shell’s commitment to its gas business and maintaining its status as one of the world’s leading liquefied natural gas (LNG) players.

There has been a clear effort to cut emissions from all corners of Shell’s sprawling global business.

The company has been successful in cleaning up its Chemicals & Products business where emissions have been reduced from 46 million tonnes of CO2e in 2016 to 32 million tonnes by 2022 (see graph below).

Upstream emissions have also declined consistently over the same period, though its Integrated Gas unit has seen little change.

In October 2021, Shell set a target to reduce absolute emissions by 50 per cent by 2030, compared to 2016 levels, as part of its net zero pathway.

It estimates its absolute emissions peaked in 2018 at around 1.73 gigatonnes of carbon dioxide equivalent (GtCO2e) per annum (gtpa). By 2022, the total emissions were down to 1.2 gtpa.

The group also aims to achieve near-zero methane emissions by 2030 and to eliminate routine flaring from its upstream operations by 2025, moving faster than the World Bank’s Zero Routine Flaring 2030 initiative.

Sustaining output

Shell’s North American operations are integral to its oil and gas strategy and, consequently, its overall ESG record.

It says its Gulf of Mexico portfolio currently provides among the lowest GHG intensity in the world for producing oil.

In February, the company launched production from the deepwater Vito field, with an estimated peak production of 100,000 boe/d.

The original Vito design was re-scoped and simplified in 2015, resulting in a reduction of approximately 80 per cent in CO2 emissions over the lifetime of the facility, as well as significant cost savings.

Shell is also scheduled to launched production in 2024 from its Whale field, which is of a comparable size to Vito.

It will also see new production onstream from Brazil and Malaysia over the coming years.

On the gas side, Shell’s flagship LNG Canada project will also add 14mtpa of LNG output from the first two trains, with start-up expected in 2025.

Still spending big on transition technologies

Shell is also investing heavily in transition projects and technologies, from hydrogen to carbon capture and storage (CCS), across its global portfolio.

It plans to spend $10–$15 billion across 2023 to 2025 to support the development of low-carbon energy solutions including biofuels, hydrogen, electric vehicle charging and CCS.

In 2022, Shell increased the number of electric vehicle charge points it owned or operated worldwide by 62 per cent to around 139,000, up from 86,000 the previous year.

Other recent initiatives include a $1.6-billion investment in Indian renewable power developer Sprng Energy, and the final investment decision on the Holland Hydrogen 1 project in the Netherlands, set to be Europe’s largest renewable hydrogen plant.

It also this year completed the $2-billion acquisition of Denmark’s Nature Energy, which produces renewable natural gas.

Again, the U.S. is home to some of the group’s biggest low-carbon ventures, including Bovarious and Galloway, two dairy manure-to-renewable natural gas facilities located in Idaho and Kansas, respectively, with start-up expected within the coming year.

The company is also scaling up investments in offshore wind with a number of big U.S. projects. Mayflower and Atlantic Shores are scheduled for start-up in 2026 and 2027, respectively.


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