Ladies and gentlemen, my name is Carlos Maurer and I lead Shell’s Global Commercial business, the B2B arm of Shell that markets a range of products – from motor oils and machine lubricants, to jet fuel and bitumen – we do so to more than 1 million business customers in 150 markets.

I’m also a surfer.

When you first start surfing – you fall over a lot. It is tough. But if you keep trying, eventually you get up on that board and you have some real fun. It takes some skill, some imagination, and a lot of determination.

You are probably wondering what that has to do with decarbonisation.

Overcoming the global decarbonisation challenge that we all face today will also take skill, determination and imagination.

The challenge is huge but together we can do it. Today many of the energy sources needed for a low-carbon future already exist. Hydrogen, waste-to-energy and, of course, renewables like solar and wind… this summit has already focused on many of them. But the key to unlocking such sources is how to best apply and scale them to drive sector decarbonisation.

Uncertainties ahead

Before we begin, a word from our legal team. Today I am going to gaze into my crystal ball and talk about the future. With that comes a lot of uncertainties. And I am obliged to share the following disclaimer notes with you. Please visit shell.com for more information.

The challenge for hard-to-abate sectors

Over the next 15 minutes I want to focus on three transport sectors – Shipping, Aviation and Road Freight. Shell has been associated with these three sectors for generations and all three are central to the economies in the Middle East.

As we have all experienced, the COVID-19 pandemic has created major disruptions in travel, trade and economic activity, and the impact has been far-reaching human and economic terms.

While the ongoing spread of COVID-19 will result in an estimated 8%1 decline in global CO2 emissions by the end of 2020, emissions levels will rebound as the global economic recover. It is crucial we work together now to tackle the impact of climate change in the process.

Before the pandemic hit, shipping, aviation and road freight accounted for nearly 14% of global CO2 emissions. They also play a vital role in global trade, so all of these sectors will be at the heart of any economic recovery.

Shell’s commitment

Shell aims to become a net-zero emissions energy business by 2050, or sooner, in step with society and our customers. And we will work towards this ambition in three ways:

First, we aim to be net-zero emissions from making our products.

Secondly, we seek to reduce the carbon intensity of the products we sell. This will mean selling more hydrogen, more biofuels, more renewable electricity.

Finally, we as a business that supplies energy will work sectors which use energy, like aviation, heavy freight and shipping. We will help them find their own path to net-zero emissions.

Shell advocates a three-tiered carbon-management approach to emissions: Avoid, Reduce, and Offset.

Shell’s aim is to lead and thrive through the transition and become an integral part of a net-zero emissions future.

And our business plans will have to evolve over time, in step with the evolving needs and preferences of society and our customers.

Hard-to-abate sectors and their pathways to decarbonisation

How can hard-to-abate sectors come together to develop a low-carbon future?

We believe sectors seeking to unlock decarbonisation solutions should start by exploring three key questions:

The first question is “why should a sector change?” The two main factors that need to be considered are customer demand and regulatory incentives.

The second is “What is the sector’s potential to change?” This requires alignment on technology solutions as well as clarity on the roles of different players within the sector’s ecosystem.

The final question is “How fast can it change?” How easy will it be to replace or upgrade assets and infrastructure?

The priorities and readiness to change vary by geography and by sector.

Ultimately, a lower carbon future requires close collaboration. Collaboration within sectors… and collaboration across sectors.

Take hydrogen. Shipping, aviation and road freight are looking at the viability of hydrogen as a reliable and low-carbon fuel for the future. Other hard-to-abate sectors like steel are also interested.

Sectors cannot decarbonise in a vacuum. We need to get to scale… to deliver economies of scale.

  • More demand will lead to better supply…
  • Better supply will lead to better infrastructure….
  • And this heightened demand across multiple sectors will help drive innovation…
  • All vital to de-risk investments.

In the Netherlands, Shell is looking to put this into practice… by building green hydrogen electrolysers that take the power from our offshore wind farms to produce green hydrogen.

This green hydrogen can then be used at our refinery, in other industries or in transport. It is all about finding where there is demand and creating the infrastructure to meet it.

Likewise, the Middle East offers potential for green hydrogen development. The region has seen some of the lowest solar power prices in the world, a trend that could help to form the basis of a future hydrogen industry.

But how do we make the fuels of the future the fuels of today? What will help drive change within these sectors?

I have already mentioned collaboration. Regulation is another key driver. Right now we are operating in the extremely challenging environment of COVID-19. And yet… around the world, many governments are incorporating green initiatives into their recovery plans to assist their economies overcome the impact of COVID-19. These are important signals for change.

Over time, society wants change. Inevitably, large companies will respond to the demands of their customers. Publicly listed companies need to listen to their investors. And governments and state-owned businesses will be held to account by voters.

And finally, we need multiple pilot projects… in multiple geographies… to take change forward.

Shipping

Let me turn first to shipping. The Middle East is home to the Jebel Ali port in Dubai, one of the ten largest container ports in the world.

Shell recently published a report with Deloitte called “Decarbonising Shipping: All Hands on Deck”. It draw conclusions from interviews and surveys with 80 senior level executives from across the global shipping eco-system.

We heard real concerns on the current decarbonisation deadlock, we also sensed considerable optimism that both the will and the right conditions are emerging for fundamental change.

Like many other sectors, what is abundantly clear is that the time to act is now. Of the twelve solutions to unlock decarbonisation identified by these leaders, the report concluded that five of them need to be prioritised in the next two to three years. Whether building demand for green shipping, building global regulatory alignment, funding research and development into new fuels, scaling up pilot projects or industry coordination… we cannot sit back and wait.

Our conclusion from reviewing this industry roadmap is that the shipping sector must find fuels for the long-term future, but also act today.

At Shell we are trying to practice this, energy supply for bunkering is expected to grow significantly and could reach 50 million tonnes per annum by 2040. To meet this demand, we’re working to establish global LNG bunkering company in the region.

Aviation

Another vital sector in the Middle East is aviation. Today Qatar airways, Emirates and Etihad are household names.

Our daily news feeds have been dominated by COVID-19’s impact on airlines and airports. Globally, the number of passengers travelling has decreased 69% from January to August, compared to the same numbers last year…. That corresponds to some 1.8 billion fewer passengers…

As the industry emerges from COVID-19, we believe there will be a renewed ambition to reduce emissions across the sector. The solutions are complex but with urgent action and collaboration across the value chain, significant reductions in emissions are possible.

In spite of the current challenges, we have seen many positive signs and developments.

A few weeks ago The Clean Skies for Tomorrow initiative – which was formed by airlines and other corporations in the industry – called for a package of European policies focused on supporting the growth and use of sustainable aviation fuel.

The use of sustainable aviation fuel can help to reduce carbon emissions by up to 80%

And in the last few months Shell has signed a number of deals to develop a scalable supply..

It is also rewarding to collaborate with cargo carriers. This July we announced that we will be supplying up to six million gallons of blended sustainable aviation fuel to Amazon Air.

Road freight

And finally… road freight. The vans and trucks that deliver goods to shops and homes all over the world. Today, the sector consumes approximately 50% more energy than aviation and shipping combined and it continues to grow quickly.

We are working with Deloitte and global freight leaders to better understand the barriers to decarbonisation, potential solutions and a plausible decarbonisation roadmap. Look out for our report in mid-January.

But I can assure you that we already see plentiful demand for change from our road freight customers.

For example, Shell is working with a US truck company to build and test a hyper-efficient concept truck using a range of lightweight and energy-efficient materials and technologies. Fitted with solar panels and using specially formulated lubricants, the Starship truck pushed the boundaries and recorded a near 250% improvement in freight tonne efficiency compared with the average North American truck.

Last month, we introduced our specialised range of E-Fluids to our truck and bus manufacturer customers. It is designed to meet the technology demands of battery electric and hydrogen commercial vehicles.

And in California, as part of a consortium, we are piloting three new refuelling stations for heavy-duty hydrogen trucks. They are located along a heavily polluted road that connects the Port of Los Angeles with a major warehouse district.

Now is the time for action

The world is changing as demographics shift, transport and digital technology improve and living standards rise.

Society is seeking ways to move to a lower-carbon energy system at the same time as its long-term energy demand increases.

We must take heart from the fact that a 1,000 companies and more than 120 countries have committed to be net-zero by 2050.

We are at a pivotal moment… Urgency, innovation and collaboration are key if we are to achieve this ambition.

We need to move from commitment and ambition to ACTION, and we need to do so together.

Thank you.

1 https://www.iea.org/articles/the-impact-of-the-covid-19-crisis-on-clean-energy-progress

WARNING: uncertainties ahead

This presentation contains data and analysis from Shell’s Sky scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky scenario is based on the assumption that society reaches the Paris Agreement’s goal of holding the rise in global average temperatures this century to well below two degrees Celsius (2°C) above pre-industrial levels. Unlike Shell’s Mountains and Oceans scenarios, which unfolded in an open-ended way based upon plausible assumptions and quantifications, the Sky scenario was specifically designed to reach the Paris Agreement’s goal in a technically possible manner. These scenarios are a part of an ongoing process used in Shell for over 40 years to challenge executives’ perspectives on the future business environment. They are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes.

Additionally, it is important to note that as of 6 November 2020, Shell’s operating plans and budgets do not reflect Shell’s net-zero emissions ambition. Shell’s aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new net-zero emissions ambition. However, these plans and budgets need to be in step with the movement towards a net-zero emissions economy within society and among Shell’s customers.

Also, in this presentation we may refer to “Shell’s Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions but, to support society in achieving the Paris Agreement goals, we aim to help and influence such suppliers and consumers to likewise lower their emissions. The use of the terminology “Shell’s Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.

The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell group” and “Royal Dutch Shell” 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 presentation 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 presentation 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 presentation, 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 presentation 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, 2019 (available at www.shell.com/investor and www.sec.gov ). These risk factors also expressly qualify all forward-looking statements contained in this presentation and should be considered by the reader. Each forward-looking statement speaks only as of the date of this presentation, 6 November 2020. 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 presentation.

We may have used certain terms, such as resources, in this presentation that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.