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Released February 22, 2021 | GALWAY, IRELAND
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Written by Martin Lynch, European News Editor for Industrial Info (Galway, Ireland)--Royal Dutch Shell (NYSE:RDS.A) has outlined its ambitious plans to transition into a net-zero emissions energy business by 2050, just weeks after it posted its worst financial loss in decades.
The company is aiming to reduce its net carbon intensity by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050. Shell revealed that its emissions peaked in 2018 at 1.7 gigatonnes and said oil and gas production peaked in 2019. The sweeping changes outlined in its recent Strategy Day come just weeks after the company posted an annual loss of more than $21 billion for fiscal 2020, compared to earnings of more than $15 billion in 2019. The company blamed the COVID-19 pandemic and its impact on global oil and gas demand. The company was not the only oil major to turn in dismal results recently, with BP (NYSE:BP) and ExxonMobil (NYSE:XOM) reporting year-end losses of $18.1 billion and $22.4 billion, respectively.
The company's refocus will see big changes in many sectors, including less oil and gas exploration in the North Sea, more renewable energy projects, large investment in the developing hydrogen fuel sector, less refineries, more liquefied natural gas (LNG), a significant uptick in the number of global electric vehicle (EV) charging points and an increase in its carbon capture and storage (CCS) investment. Late last year, Industrial Info reported on the company's plans to cut up to 9,000 jobs--more than 10%--of its global workforce over the next two years in an attempt to cut costs. For additional information, see October 1, 2020, article--Shell Slashing 9,000 Jobs to Cut Costs.
"Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society," said Royal Dutch Shell chief executive officer, Ben van Beurden. "We must give our customers the products and services they want and need -- products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society. "Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns."
Outlining the spending to rebalance its portfolio, Shell said that annual investment will be $5-6 billion in its Growth pillar (around $3 billion in Marketing; $2-3 billion in Renewables and Energy Solutions), $8-9 billion in its Transition pillar (around $4 billion Integrated Gas; $4-5 billion Chemicals and Products) and around $8 billion in Upstream.
The company said it wants to have access to an additional 25 million tonnes a year of carbon capture and storage (CCS) capacity by 2035. Industrial Info is tracking Shell's three key CCS projects: Quest in Canada (in operation), Northern Lights in Norway (sanctioned) and Porthos in The Netherlands (planned). They will total around 4.5 million tonnes of capacity. Shell will have to add more than 20 million tonnes of CCS capacity to hit its 2035 target.
In chemicals, it plans to reduce its refinery footprint by more than half, down from 13 sites today to six "high-value Chemicals and Energy Parks". This will see the production of traditional fuels fall by 55% by 2030. It wants to grow volumes of the chemicals portfolio and increase cash generation from chemicals by $1 billion-$2 billion a year by 2030. It will begin producing chemicals from recycled waste, known as circular chemicals, and by 2025 aim to process 1 million tonnes a year of plastic waste annually. It will also boost investment in biofuels production globally.
It intends to invest more in LNG to extend its lead in the marketplace through the acquisition of "competitive LNG assets" to deliver more than 7 million tonnes per annum of new capacity on-stream by the middle of the decade.
The company currently has 46,000 retail service stations globally serving around 30 million customers a day. It plans to have 55,000 retail sites serving 40 million customers, while growing its electric vehicle (EV) network from more than 60,000 charge points today to around 500,000 in the next four years.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
The company is aiming to reduce its net carbon intensity by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050. Shell revealed that its emissions peaked in 2018 at 1.7 gigatonnes and said oil and gas production peaked in 2019. The sweeping changes outlined in its recent Strategy Day come just weeks after the company posted an annual loss of more than $21 billion for fiscal 2020, compared to earnings of more than $15 billion in 2019. The company blamed the COVID-19 pandemic and its impact on global oil and gas demand. The company was not the only oil major to turn in dismal results recently, with BP (NYSE:BP) and ExxonMobil (NYSE:XOM) reporting year-end losses of $18.1 billion and $22.4 billion, respectively.
The company's refocus will see big changes in many sectors, including less oil and gas exploration in the North Sea, more renewable energy projects, large investment in the developing hydrogen fuel sector, less refineries, more liquefied natural gas (LNG), a significant uptick in the number of global electric vehicle (EV) charging points and an increase in its carbon capture and storage (CCS) investment. Late last year, Industrial Info reported on the company's plans to cut up to 9,000 jobs--more than 10%--of its global workforce over the next two years in an attempt to cut costs. For additional information, see October 1, 2020, article--Shell Slashing 9,000 Jobs to Cut Costs.
"Our accelerated strategy will drive down carbon emissions and will deliver value for our shareholders, our customers and wider society," said Royal Dutch Shell chief executive officer, Ben van Beurden. "We must give our customers the products and services they want and need -- products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society. "Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns."
Outlining the spending to rebalance its portfolio, Shell said that annual investment will be $5-6 billion in its Growth pillar (around $3 billion in Marketing; $2-3 billion in Renewables and Energy Solutions), $8-9 billion in its Transition pillar (around $4 billion Integrated Gas; $4-5 billion Chemicals and Products) and around $8 billion in Upstream.
The company said it wants to have access to an additional 25 million tonnes a year of carbon capture and storage (CCS) capacity by 2035. Industrial Info is tracking Shell's three key CCS projects: Quest in Canada (in operation), Northern Lights in Norway (sanctioned) and Porthos in The Netherlands (planned). They will total around 4.5 million tonnes of capacity. Shell will have to add more than 20 million tonnes of CCS capacity to hit its 2035 target.
In chemicals, it plans to reduce its refinery footprint by more than half, down from 13 sites today to six "high-value Chemicals and Energy Parks". This will see the production of traditional fuels fall by 55% by 2030. It wants to grow volumes of the chemicals portfolio and increase cash generation from chemicals by $1 billion-$2 billion a year by 2030. It will begin producing chemicals from recycled waste, known as circular chemicals, and by 2025 aim to process 1 million tonnes a year of plastic waste annually. It will also boost investment in biofuels production globally.
It intends to invest more in LNG to extend its lead in the marketplace through the acquisition of "competitive LNG assets" to deliver more than 7 million tonnes per annum of new capacity on-stream by the middle of the decade.
The company currently has 46,000 retail service stations globally serving around 30 million customers a day. It plans to have 55,000 retail sites serving 40 million customers, while growing its electric vehicle (EV) network from more than 60,000 charge points today to around 500,000 in the next four years.
Industrial Info Resources (IIR), with global headquarters in Sugar Land, Texas, six offices in North America and 12 international offices, is the leading provider of global market intelligence specializing in the industrial process, heavy manufacturing and energy markets. Our European headquarters are located in Galway, Ireland. Follow IIR Europe on: Facebook - Twitter - LinkedIn For more information on our European coverage send inquiries to info@industrialinfo.eu or visit us online at Industrial Info Europe.
