Why Shell Spent US$5.6bn on Low-Carbon Energy Solutions

Shell’s sustainability report records ‘good progress’ towards net zero goals, including hitting methane gas targets and reducing fresh water consumption

Global energy company Shell is making strides towards some of its net zero targets, according to its 2023 sustainability report.

In his introduction to the report, Shell’s CEO Wael Sawan writes: “In 2023, we made good progress in our goal of creating more value with less emissions. As we continue to deliver the oil and gas that the global energy system relies on, we are reducing the carbon emitted in its production.

“We are also investing in low-carbon and non-energy products that reduce emissions for our customers.”

Wael added: “We have already achieved some of the commitments made under our respecting nature goal, which we set in 2021.

“These include reducing fresh-water consumption by 15% compared with 2018 in areas where water supplies are stressed, which we reached ahead of the target date of 2025.”

Sustainability by numbers

Other figures in the report include:

  • Direct Scope 1 greenhouse gas emissions down from 70 million tonnes of CO2 in 2019 to 50 million in 2023
  • Meeting its short-term target to reduce the net carbon intensity of the energy products it sells, with a 6.3% reduction against a target of 6–8% compared with 2016
  • The aim to keep methane emissions below 0.2% at Shell’s oil and gas facilities was achieved in 2023, with a target of zero emissions by 2030.

Sawan said: “We achieved our second-best financial results ever, while reducing our carbon emissions on the path towards becoming a net-zero emissions energy business by 2050.

“By year’s end, we had achieved more than 60% of our target of halving carbon emissions in our own operations by 2030, compared with 2016.”

Why LNG could hold the key

He said Shell expects liquefied natural gas (LNG) to play a “critical role in the energy transition”.

In 2023, Shell delivered the first cargoes of LNG to new import terminals in the Philippines and Vietnam.

Sawan said: “We are also working to reduce the emissions intensity of our LNG projects. LNG Canada (Shell interest 40%, non-operated), which is expected to start production later this decade, is designed to have the lowest carbon intensity of any large liquefaction facility currently operating anywhere in the world ― about 60% lower than the average facility today and 35% lower than the best-performing facility.”

In 2023, Shell invested US$5.6bn in low-carbon energy solutions, including biofuels, hydrogen, charging for electric vehicles and renewable power generation, and US$2.3bn on non-energy products such as chemicals, lubricants and convenience retail, which do not produce emissions when used by customers.

Sawan said Shell also invested 49% of its research and development budget in 2023 on decarbonisation projects. Along with generating shareholder value and achieving net-zero emissions, our Powering Progress strategy is about powering lives and respecting nature.

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