Home Fossil Energy Shell takes stock of its net zero journey fueled by $5.6 billion investment in 2023
UK-headquartered energy giant Shell has funneled $5.6 billion into its energy transition agenda last year while continuing to bankroll oil and gas projects to come to grips with the double whammy of energy security and sustainability.
Illustration; Courtesy of Shell
With its ‘Shell Energy Transition Strategy 2024,’ which represents the UK player’s first energy transition update since 2021, the company provides insights into the progress it made on the road to turning itself into a net zero emissions energy business by 2050, in line with its strategy of delivering more value with less emissions.
While aiming to showcase the steps made in delivering against its climate targets, Shell underlines that it is focusing on areas of competitive strength and investing not only $10-15 billion in low-carbon energy solutions between 2023 and the end of 2025 but also in oil and gas production with lower emissions to meet the energy needs of today while lending a helping hand in building the low-carbon energy system of the future.
During 2023, the firm dished out $5.6 billion for investments in the energy transition arena, including those in electric-vehicle charging, biofuels, renewable power, hydrogen, and carbon capture and storage (CCS), which is said to complement the company’s investments in oil and gas. The UK player has met its net carbon intensity target, covering Scopes 1, 2, and 3 GHG emissions, for the third consecutive year, with a 6.3% reduction compared with 2016.
Since Shell has set a target to reach net-zero carbon emissions by 2050 from its operations and the energy products it sells, the firm outlines that 2023 enabled it to make inroads in reaching this goal, thanks to achieving by year-end more than 60% of its target to halve Scope 1 and 2 greenhouse gas (GHG) emissions from its operations by 2030, compared with 2016.
Moreover, the company elaborates that around 10% of its greenhouse gas emissions from flaring in 2023 occurred at facilities with no infrastructure to capture the gas, similar to the 2022 figure. However, the firm’s overall flaring decreased to 2.8 million tonnes of carbon dioxide equivalent (CO2e) in 2023 from 3 million tons of CO2e in 2022.
Recently, Britain’s energy titan made a multi-million investment in a Brazilian technology research and development project testing hydrogen in diesel engines on marine vessels, such as drilling rigs and tankers, to slash greenhouse gas emissions, rolling up its sleeves together with Ocyan and LZ Energia, the Protium Dynamics business unit, to decarbonize offshore operations.
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Within its core beliefs about the energy system, the European oil major emphasizes that liquefied natural gas (LNG) will play a critical role in the energy transition, including replacing coal in the industry, On the other hand, the firm expects oil to continue to have a role in transport, with growth in demand slowing over time. Last year, Shell earmarked about $13 billion a year for oil and gas developments with a focus on LNG, adding up to potentially over $100 billion in total by 2030.
“Artificial intelligence (AI) is helping us reduce carbon emissions at LNG plants by using information from sensors to calculate the most efficient settings for equipment. At one LNG facility, we estimate these technology developments are reducing carbon dioxide emissions by around 340,000 tonnes a year. We have used these automation and optimization technologies to reduce emissions at multiple LNG facilities,” said the UK-headquartered energy heavyweight.
Furthermore, Shell is convinced that low-carbon molecules and renewable power will underpin the future energy system, expecting carbon abatement and removal solutions to be needed for the world to achieve net zero as it still relies on oil for energy security.
The UK energy giant is adamant that LNG helps provide secure energy, offering a lower-carbon alternative to coal for power and industry and delivering stability to electricity grids alongside wind and solar. In line with this, the company plans to grow its LNG business by an expected 20-30% by 2030 and continue to curb the carbon intensity of its operations.
“We are aiming to take the lead in the energy transition where we can combine competitive strengths with strong customer demand and support from governments, like in the transport sector,” outlined Shell.
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