The world has set ambitious climate-change goals and if it must meet it, the world, the oil and gas industry, experts say will have to play a big part. The industry’s operations account for 9 percent of all human-made greenhouse-gas (GHG) emissions. In addition, it produces the fuels that create another 33 percent of global emissions. As a result of this, some oil and gas companies have been ramping up efforts to cut emissions in their operations.
Shell plc has announced a 30 percent reduction in carbon emissions from its operations in 2022, meeting the firm’s projected climate targets as part of its energy transition strategy for the year.
In a newly released report by Shell titled, Energy Transition Progress Report 2022, which will be presented to shareholders for an advisory vote at Shell’s Annual General Meeting on May 23, 2023, the company said it has cut a third of its emissions.
“I am especially proud of the progress we have made in reducing carbon emissions from our operations, with a 30 percent reduction by the end of 2022 compared with 2016 on a net basis,” said Wael Sawan, Shell’s Chief Executive Officer.
“In this report, we show the progress we have made towards becoming a net-zero emissions energy business by 2050, as we continue to supply the vital energy the world needs during a time of great volatility.”
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The report showed that by the end of 2022, the net carbon intensity of the energy products sold by Shell had also fallen by 3.8 percent, compared with 2016. The analysis, using data from the International Energy Agency, shows the net carbon intensity of the global energy system fell by around two percent over that time.
In addition, it highlighted important steps that Shell has taken to advance its energy transition strategy. These include significant investments in liquefied natural gas (LNG), which Shell expects to remain an important part of the energy mix for many years to come, partly because of its role in reducing emissions from power generation and transport.
Other steps include Shell’s $1.6 billion investment in Indian renewable power developer Sprng Energy, and the final investment decision on the Holland Hydrogen 1 project in the Netherlands, which will be Europe’s largest renewable hydrogen plant.
In 2022, Shell also announced the acquisition of Denmark’s Nature Energy, which produces renewable natural gas, for around $2 billion. This deal was completed at the beginning of 2023.
“This progress comes at a time when the energy system still faces challenges as high energy prices continue to contribute to a cost-of-living crisis for many people,” the report read. “These challenges have highlighted the need for a balanced energy transition: one in which the world achieves net-zero emissions, while still providing a secure and affordable supply of energy.”
Shell’s energy transition strategy was put to an advisory shareholder vote at its 2021 Annual General Meeting, where it secured 89 percent of the vote. At the 2022 AGM, almost 80 percent of shareholders who voted supported the firm’s progress in implementing this strategy.
