By 2050 Shell intends to reach net zero.
Noble goal – but still doesn’t meet expectations outlined in the Paris Agreement. Normally when these type of headlines are out in the market a heavy dose of skepticism is required.
Driven predominantly by investor pressure they have now decided – regardless of social situation – to continue their push towards decarbonization of their products and manufacturing processes. However, one key thing they cite – much like other oil giants – they cannot be accountable for the Scope 3 Emissions that occur when their products are used in the market.
Ie. when you refuel at a Shell station the emissions resulting from the use of that oil is something they don’t want to be accountable for. This they understand makes up 85% of their total emissions.
So how does Shell plan to attack this? The plan calls for cutting a large amount of scope 3 emissions in several ways.
- Changing their product mix over time to an emphasis on renewables, hydrogen and biofuels. Shell aims to reduce the “net carbon footprint” of products they sell by 30% by 2035 and 65% by 2050.
- Expanding use of carbon capture and natural ways to mop up CO2 like reforestation. Ie. Carbon offsets
- Working with customers on their emissions-cutting efforts, and developing a method to track those reductions
However, Shell at this time has not disclosed the financial impact this commitment will have on their business. But just like the great Clayton Christensen says in Innovator’s Dilemma – Shell will have to be OK with losses in the next decade for longer term revenue.