Shell calls for more action on aviation emissions and announces ambition to produce around 2 million tonnes of sustainable aviation fuel a year

Royal Dutch Shell plc (Shell) today announced its ambition to produce around 2 million tonnes of sustainable aviation fuel (SAF) a year by 2025. It also aims to have at least 10% of its global aviation fuel sales as SAF by 2030.

“Currently, sustainable aviation fuel accounts for less than 0.1% of the world’s use of aviation fuel¹. We want to help our customers use more SAF,” said Anna Mascolo, President of Shell Aviation. “With the right policies, investments and collaboration across the sector we can accelerate aviation’s progress towards net zero by 2050.

“Last week we announced that we have taken a final investment decision for a new biofuels plant at our Rotterdam Energy and Chemicals Park. Shell also offers certified nature-based carbon credits to offset emissions, and we are exploring other ways to help aviation get to net zero, including hydrogen power.”

The announcement came as Shell published two reports looking at how the aviation sector can accelerate its progress towards decarbonisation.

Decarbonising Aviation: Cleared for Take-off is a joint report by Shell and Deloitte, based on the views of more than 100 aviation industry executives and experts. It says that the current global industry targets are not ambitious enough, and that the aviation sector should aim to achieve net-zero emissions by 2050. The report outlines 15 ways to reduce emissions between now and 2030 that will help aviation to reach net zero by 2050.

Shell’s companion report Decarbonising Aviation: Shell’s Flight Path outlines how Shell, as one of the world’s largest suppliers of aviation fuel and lubricants, can help its aviation customers decarbonise. It announces Shell’s ambition to produce around 2 million tonnes of SAF a year by 2025. Currently, Shell supplies SAF made by others. Achieving the new ambition would make Shell a leading global producer of SAF and support the decarbonisation of the aviation sector.

The SAF production ambition would align with Shell’s target of becoming a net-zero emissions energy business by 2050, in step with society.

The ambition was announced the week after Shell said it will build a biofuels facility at the Shell Energy and Chemicals Park Rotterdam, the Netherlands, with the ability to produce 820,000 tonnes of low-carbon fuels a year, including SAF.

SAF has a key role to play in decarbonising air travel. Compared with conventional jet fuel derived from fossil fuels, when used neat SAF has the potential to cut life-cycle emissions from aviation by up to 80%². It can be used immediately as a drop-in fuel, blended with conventional jet fuel, without the need for a fundamental change in infrastructure or aircraft design.

To accelerate the decarbonisation of aviation, Shell believes a comprehensive regulatory regime is needed, one that encourages consistent customer demand and provides fiscal support to drive infrastructure development, new technologies and SAF production plants. To this end and to stimulate demand, Shell has been calling for and fully supports the introduction of ambitious and feasible SAF blending mandates.

Key highlights from the Decarbonising Aviation: Cleared for Take-off report include:

• Aviation has often been considered a sector that will decarbonise later than others. This attitude should be replaced by a greater sense of ambition.
• Choosing SAF as the primary means of decarbonisation has the advantage of avoiding the need to redesign aircraft or airport infrastructure.
• More ambitious efforts are required and investments must start sooner if SAF is to be adopted at scale within 15 years.
• The uptake of certified carbon offsets must significantly increase in the short term, so they can play as full a role as possible in the early stages of decarbonisation.
• In parallel, there is a need to invest in less mature propulsion technologies like electric and hydrogen-powered aircraft, and for these to play a role in short-haul flights before 2050.

Download the Decarbonising Aviation: Cleared for Take-off and Decarbonising Aviation: Shell’s Flight Path reports at: www.shell.com/DecarbonisingAviation

Notes to editors

• Sustainable aviation fuel (SAF) can be made from plant or animal material. Research and development is also underway to find ways to produce industrial quantities of SAF synthetically, using hydrogen obtained from low-emission sources and carbon dioxide captured from other industrial processes or the air.
• Compared with conventional jet fuel derived from fossil fuels, when used neat SAF has the potential to cut life-cycle emissions from aviation by up to 80%¹. For example, if plant material is used to make SAF, the carbon dioxide absorbed by the plants as they grow is roughly equivalent to the amount of carbon dioxide emitted when the fuel is burned.
• Shell’s climate target is to become a net-zero emissions energy business by 2050, in step with society. For more information, please visit: www.shell.com/climatetarget
• The Decarbonising Aviation: Cleared for Take-off report is part of a wider collaboration between Shell and Deloitte which engages business leaders to explore ways to decarbonise hard-to-abate sectors such as shipping, road freight and aviation.
• Decarbonising Aviation: Cleared for Take-off reflects the views of more than 100 aviation business leaders and industry experts from Europe, North America and Asia-Pacific representing almost all parts of the aviation sector. This includes commercial and cargo airlines, equipment manufacturers, technology and infrastructure providers, shippers and travel agents, industry groups, regulators and financiers.
• Shell Aviation is fully committed to working across the sector to find more and cleaner ways to maintain and advance the progress that flight offers. Decarbonising Aviation: Shell’s Flight Path details some of the ways that we have started to do that, including:
  • Shell has signed offtake agreements with SAF producers including Red Rock, Neste, World Energy and ECB Group.
  • Shell recently announced deals with DHL Express and Amazon Air to supply them with SAF.
  • Shell and American Express Global Business Travel (GBT) recently formed an alliance to help increase the supply of SAF by aggregating SAF demand for corporate travel.
  • Shell has invested in SAF-producer LanzaJet and hydrogen-powered aircraft developer ZeroAvia.

Quotes from Deloitte and study participants

• Tarek Helmi, Partner, Deloitte Netherlands: “Decarbonising aviation can be done. Collaboration within the sector and also across sectors is essential to scale up the demand for and production of sustainable aviation fuel (SAF). Working with more than 100 global business leaders and industry executives around the world we defined 15 solutions, which when integrated, would systematically decarbonise the sector and enable net-zero emissions by 2050.”
• Paul Stein, Chief Technology Officer, Rolls-Royce: “The journey to decarbonising aviation relies on cross-sector collaboration, like the longstanding relationship between Rolls-Royce and Shell. We are actively pursuing technology levers – including improving aircraft efficiency, accelerating the availability of lower carbon fuels, and exploring new technologies – that will be needed to achieve net zero carbon. This report sets out some of the barriers that must be overcome and it is clear that no one party can tackle them alone. Continued collaboration across countries, sectors and companies will be key.”
• Si-Yeon Kim, Chief Risk & Compliance Officer and Executive Chair of ESG, American Express Global Business Travel (GBT): “Travel is a force for good, connecting people across the world and generating global prosperity. Aviation in particular has an unparalleled power to make the world accessible for everyone. But with that power comes responsibility: industry actors can make travel more sustainable with carbon offsets and carbon insets, with sustainable aviation fuel (SAF) emerging as the most promising decarbonisation solution. Corporate investment in credible carbon offsets and SAF can restore consumer confidence and trust in the intrinsic value of travel. Now is the opportune time to capitalise on these opportunities and we can solve this together.”
• Thorsten Lange, Executive Vice President for Renewable Aviation, Neste Corporation: “Neste supports the key findings of this report which addresses why aviation needs to change, can we and how quickly can we change. The recently issued IPCC report says that the case for action is clear. It is now critical that policy proposals in the EU, UK and the USA, as well as other countries, support the use of sustainable aviation fuel (SAF), which will be the main way by which aviation reduces its own net emissions by 50% or more by 2050. The good news is that SAF is available now, and production can be ramped up with current production methods, so long as we do not restrict the use of the various available sustainable feedstocks. Demand for SAF is growing, with corporate and other end customers now showing willingness to pay the incremental cost to deliver real in-sector reductions in greenhouse gas emissions on their aviation travel and air freight.

Cautionary note

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this announcement “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. “Subsidiaries”, “Shell subsidiaries” and “Shell companies” as used in this announcement refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.

This announcement contains the following forward-looking Non-GAAP measure: Adjusted Earnings. We are unable to provide a reconciliation of these forward-looking Non-GAAP measures to the most comparable GAAP financial measures because certain information needed to reconcile the above Non-GAAP measure to the most comparable GAAP financial measure is dependent on future events some which are outside the control of the company, such as oil and gas prices, interest rates and exchange rates. Moreover, estimating such GAAP measures with the required precision necessary to provide a meaningful reconciliation is extremely difficult and could not be accomplished without unreasonable effort. Non-GAAP measures in respect of future periods which cannot be reconciled to the most comparable GAAP financial measure are calculated in a manner which is consistent with the accounting policies applied in Royal Dutch Shell plc’s consolidated financial statements.

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, Shell’s operating plans, outlooks, budgets and pricing assumptions do not reflect our net-zero emissions target. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans, outlooks, budgets and pricing assumptions to reflect this movement.

This announcement contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, “anticipate”, “believe”, “could”, “estimate”, “expect”, “goals”, “intend”, “may”, “objectives”, “outlook”, “plan”, “probably”, “project”, “risks”, “schedule”, “seek”, “should”, “target”, “will” and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this announcement, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this announcement are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2020 (available at www.shell.com/investors and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement, September 20, 2021. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this announcement.

LEI number of Royal Dutch Shell plc: 21380068P1DRHMJ8KU70

_{¹ Source: World Economic Forum.}

_{² Source: International Air Transport Association.}