Shell reports good progress on journey to net-zero emissions
Shell plc has published its Energy Transition Progress Report 2022, which shows it has again met its climate targets as part of its energy transition strategy. The report will be put to shareholders for an advisory vote at Shell’s Annual General Meeting on May 23, 2023.
“In this report, we show the progress we have made towards becoming a net-zero emissions energy business by 2050, as we continue to supply the vital energy the world needs during a time of great volatility" said Wael Sawan, Shell’s Chief Executive Officer. "I am especially proud of the progress we have made in reducing carbon emissions from our operations, with a 30% reduction by the end of 2022 compared with 2016 on a net basis"
By the end of 2022, the net carbon intensity of the energy products sold by Shell had also fallen by 3.8%, compared with 2016. Our analysis, using data from the International Energy Agency, shows the net carbon intensity of the global energy system fell by around 2% over that time.1
The report highlights important steps that Shell has taken to advance its energy transition strategy. These include significant investments in liquefied natural gas (LNG), which Shell expects to remain an important part of the energy mix for many years to come, partly because of its role in reducing emissions from power generation and transport.
Other steps include Shell’s $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, which will be Europe’s largest renewable hydrogen plant. In 2022, Shell also announced the acquisition of Denmark’s Nature Energy, which produces renewable natural gas, for around $2 billion. This deal was completed at the beginning of 2023.
Shell also increased the number of electric vehicle charge points it owned or operated worldwide by 62% to around 139,000 in 2022, up from 86,000 the previous year.
Sir Andrew Mackenzie, Shell Chair, said: “We believe the progress we have made in line with our energy transition strategy has been to the benefit of our customers, our shareholders and wider society.”
This progress comes at a time when the energy system still faces challenges as high energy prices continue to contribute to a cost-of-living crisis for many people. These challenges have highlighted the need for a balanced energy transition: one in which the world achieves net-zero emissions, while still providing a secure and affordable supply of energy.
Shell’s energy transition strategy was put to an advisory shareholder vote at its 2021 Annual General Meeting, where it secured 89% of the vote. At the 2022 AGM, almost 80% of shareholders who voted supported our progress in implementing this strategy.
This year, Shell is again asking shareholders to vote on its annual progress.
Read the report at www.shell.com/energy-transition-progress-report
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1 For more details see www.shell.com/energytransitionfaq
Notes
The publication of annual progress reports, along with the advisory votes, have resulted in a more informed dialogue between Shell and its institutional investors. The vote is purely advisory and is not binding on our shareholders. The legal responsibility for Shell’s strategy lies with the Board and Executive Committee.
Cautionary note
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Shell’s net carbon intensity
Also, in this press release we may refer to Shell’s “Net Carbon Intensity”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Intensity” is for convenience only and not intended to suggest these emissions are those of Shell plc or its subsidiaries.
Shell’s net-Zero Emissions Target
Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, they reflect our Scope 1, Scope 2 and Net Carbon Intensity (NCI) targets over the next ten years. However, Shell’s operating plans cannot reflect our 2050 net-zero emissions target and 2035 NCI target, as these targets are currently outside our planning period. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans to reflect this movement. However, if society is not net zero in 2050, as of today, there would be significant risk that Shell may not meet this target.
Forward Looking Non-GAAP measures
.This press release may contain certain forward-looking non-GAAP measures such as cash capital expenditure and divestments. We are unable to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile those Non-GAAP measures to the most comparable GAAP financial measures is dependent on future events some of which are outside the control of Shell, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Shell plc’s consolidated financial statements.
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