Royal Dutch Shell has announced plans this week to cut the net carbon footprint of its energy products by around half by 2050, with an interim step of 20% by 2035, at the same time as it announced intentions to nearly double the finances of its new energies division.
Ben van Beurden, Royal Dutch Shell’s Chief Executive Officer, announced on Tuesday an update to investors on the company’s financial strategies, including plans to grow returns and free cash flow and its financial outlook. However, the key aspect of van Beurden’s words to investors was the company’s plans to cut its net carbon footprint and increase the funding to its new energies division.
“Shell aims to cut the net carbon footprint of its energy products — expressed in grams of CO2 per megajoule consumed — by around half by 2050,” explained van Beurden. “As an interim step, by 2035, we aim to reduce it by around 20%. We will do this in step with society’s drive to align with the Paris goals, and we will do it by reducing the net carbon footprint of the full range of Shell emissions, from our operations and from the consumption of our products.”
Importantly, Shell is aiming to reduce its net carbon footprint covering both its own emissions from its own operations as well as emissions from those produced when using Shell products. The company will continue to disclose the net carbon footprint from its operations and energy use, as well as including net carbon footprint from the use of its energy products. Shell will review this every five years to ensure the company is in line with societal progress toward the carbon footprint reductions laid out in the Paris Climate Agreement.
“Tackling climate change is a cross-generational, global and multi-faceted effort,” van Beurden said. “This is a challenge for the whole planet, for all of society, for customers, for governments and indeed for businesses. It will mean meeting increasing energy demand with an ever-lower carbon footprint. And it is critical that our ambition covers the full energy lifecycle from production to consumption. We are committed to play our part.’’
Additionally, van Beurden announced that the company will also increase the capital allocated to its new energies division, which was formed and launched in May of 2016 and is dedicated solely to investing in renewable and low-carbon energy technologies. The division was formed from the company’s hydrogen, biofuels, and electrical activities and expanded to include renewable energy technologies such as wind and electric cars. At the time, Shell allocated up to $1 billion per year by 2020, but the company has now expanded that and will allocate between $1 and $2 billion per year until 2020.
“Taken together, these next steps, and the strategy and portfolio strength that underpin them, will deepen Shell’s financial resilience and competitiveness, help to ensure our long-term business relevance and keep us firmly on the path to becoming and remaining a world-class investment,” Van Beurden concluded.