Volkswagen Group CEO Herbert Diess lent his support on LinkedIn last week toward Royal Dutch Shell’s CEO, Ben van Beurden, for Shell’s decision to reshape itself into a net-zero emissions company. Diess noted that Shell is Europe’s largest oil company and that it wants to be a part of the transformation away from global warming pollution, and labeled the move “historic!”
“I am looking forward to many wind and solar parks — and especially charging stations with clean electricity from Shell,” Diess shared on LinkedIn.
Diess shared that he has “great respect” for van Beurden’s decision and noted that it had been “eagerly discussed internally.”
Ben van Beurden responded to Diess’ comment and acknowledged that the energy landscape is changing and it only makes sense for Shell to change as well. “The energy landscape is changing fast, but change is opportunity. At Shell, we have been on this road to a lower-carbon future for some time, and now we have set ourselves the aim of being a net-zero emissions energy business by 2050. If we want to get there, and if society wants to get to net-zero emissions, now is the time to accelerate.”
Shell’s Move Toward Net-Zero Emissions
“Can Shell transform?” Is the question the company asked itself. The answer is “Yes. And we will.” The company noted in its blog that the pandemic’s disruption of the world caused many companies to look at how and what they could do. For Shell, the company stated that it saw that long-term, global shifts are urgently needed to tackle climate change. The article included an interview with van Beurden, who shared his generic plan as to what Shell will do: “from its ambition to be a net-zero emissions energy business to the ongoing restructuring of Shell’s operations.”
A lot has happened this year and van Beurden seems very proud of how Shell and his colleagues have reacted. “We have had to act quickly and decisively and make some very tough financial decisions to ensure we remained resilient, including cutting the dividend. But as hard as they were, they were entirely the appropriate choices to make. And COVID-19 has hit us in another way. We have, very sadly, lost six employees and six contractor colleagues to the virus,” he said.
With Shell being an oil & gas company at its core, the question naturally arose in the interviewer’s heart, “Why is Shell aiming for this?”
Van Beurden had a lot to say, focused around the fact that society needs to keep global warming below two degrees Celsius, and that to do this, society needs a net-zero emissions energy system. “If society wants to get to net-zero emissions and we really want to be an integral part of that society, then we need to get to net-zero as well.” Naturally, that means cutting back on oil and gas.
“We have to change the type of products that we sell.” — Ben van Beurden, CEO Royal Dutch Shell
Shell, he said, is all about taking on big missions, and this is their biggest yet. “It is consistent with our strategy and it fits better with us, as the company and people we are, and with the vision we have for where we want to be.”
Speaking of how big the change is for the company, he noted, “You cannot do that by just having different products which still produce emissions.”
Shell will still have some oil and gas in the mix of energy they sell by 2050, according to Beurden, but Shell plans to make that the smaller part of what it’s selling. Shell’s energy mix will be mostly low-carbon electricity, low-carbon biofuels, hydrogen, and other no- or low-carbon solutions.
An important question that was asked in this interview was, “Where does Shell start?” The answer? Shell has already started. “In biofuels, we are in a venture that is one of the world’s largest sugarcane ethanol producers. In offshore wind, we have been part of winning bids to build projects. We have made inroads as a developer of solar power. And when it comes to hydrogen, it is still a very small market but we are absolutely the leader when it comes to hydrogen for transport and are active in other areas too. We are, for example, installing the world’s largest hydrogen electrolyzer in Germany,” van Beurden said.
The fossil fuel industries may have one gigantic chokehold on this planet when it comes to our climate and environment, but we have to remember that, as with all industries, they are made up of humans, people who have their own perspectives, dreams, and idea. Some are greedy, some are corrupt, and some want to create a better future. I believe that people like Herbert Diess and van Beurden are in the latter category.
Sometimes, we get ahead of ourselves in vilifying these industries, but these industries need people like Diess and van Beurden. Yes, they are CEOs of companies in industries that are harming this planet, but you cannot clean house without getting dirty. When Tesla’s CEO Elon Musk spoke of Diess on Twitter in 2019, he said that Diess is doing more than any big carmaker to go electric.
“The good of the world should come first. For what it’s worth, he has my support.” I fully agree with Elon Musk here because we need to support those who are willing to go into a dirty house and clean it up. They are willing to take on the challenges, present plans, and hope for the best. I would like to see Exxon and other big fossil fuel companies take such a stance on not just clean energy and net-zero emissions, but to actually sit there and plan to restructure themselves into a company that isn’t a fossil fuel producer, into an energy producer that uses cleaner energy than oil.
A few days ago, Elon Musk echoed his support for Diess, but also noted more directly this time how hard of a challenge it is when you have large groups of people inside your organization fighting change.
Diess is doing his best to move in the right direction, but he’s in a tough position with so many constituencies to please. No way to make everyone happy.
— Elon Musk (@elonmusk) October 13, 2020
Shell is planning to change a lot of its ways and undergo a major restructuring process of its own, an even bigger one than Volkswagen is going through. This type of thinking is what companies that are creating fossil fuel products need in order to make the switch to creating cleaner energy, in order to survive. One thing I’ve said a few times is that this industry needs to evolve. Van Beurden is also thinking along those lines.
“Well, we have not started with a blank sheet of paper. We did not start all over again, simply because that was not needed. It is an evolution, an evolution that affects tens of thousands of people in one way or another.”
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