Royal rumble

11 February 2021 By George Hay Follow @gfhay

The Anglo-Dutch group’s decarbonisation strategy will see it stay big in oil longer than BP. European investors now have a choice between Shell’s walking pace and its rival’s handbrake turn into wind and solar. It could become a gauge of how seriously investors take green issues.

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Royal Dutch Shell said on Feb. 11 it aimed to be a net-zero emissions energy business by 2050, decarbonising its production processes, emissions created when it trades oil produced by other groups, and those created when customers use its products.

The Anglo-Dutch group said that its oil production had peaked in 2019, and would decrease at 1%-2% annually. It also said its total carbon emissions had peaked in 2018 at 1.7 gigatonnes.

Shell will seek by 2035 to have access to 25 million tonnes of carbon capture and storage (CCS), which removes and stores emissions, compared to the 4.5 million tonnes from projects in which it is currently involved. It also expects to have 120 million tonnes a year of so-called nature-based solutions by 2030, which involve planting trees to absorb and offset carbon dioxide.

Starting at its 2021 annual general meeting, the company will also offer investors an advisory vote on its transition plan.

Shell said it would invest $19 billion to $22 billion annually, including $5 billion to $6 billion in so-called “growth” areas – with half in marketing and half in renewable energy. It will invest another $8 billion in oil production, and $8 billion to $9 billion in “transition” areas, split roughly equally into gas and chemicals.

Shell said it would aim to reduce carbon intensity, representing emissions per unit of energy produced, by between 6% and 8% from 2016 levels by 2023. Its target rises to 20% by 2030, 45% by 2035 and 100% by the middle of the century.

Shell shares were trading at 15.6 euros as of 0828 GMT on Feb. 11, down 1%.

Context News

The Anglo-Dutch group said that its oil production had peaked in 2019, and would decrease at 1%-2% annually. It also said its total carbon emissions had peaked in 2018 at 1.7 gigatonnes.

Starting at its 2021 annual general meeting, the company will also offer investors an advisory vote on its transition plan.

Shell shares were trading at 15.6 euros as of 0828 GMT on Feb. 11, down 1%.

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