What is Shell's Net Carbon Footprint ambition?
Shell is a big company that supplies around 3% of the energy the world uses. We want to play our part and contribute to the global effort to tackle climate change and meet the goal of the Paris Agreement. Working towards our Net Carbon Footprint ambition is how we plan to do this.
Watch: Shell’s Net Carbon Footprint explained
Title: 0226_RadleyYeldar_Shell_NCF_13 (1)
Duration: 1:54 minutes
This video gives a brief introduction to Shell’s net carbon footprint ambition and commitment to adapting technologies for reducing global emissions.
0226_RadleyYeldar_Shell_NCF_13 (1) Transcript
[Background music plays]
The Sound of Shell adaptation.
Shell’s purpose is to provide more and cleaner energy as the world’s demand continues to grow.
Whoosh sound effects.
Fade in from white, a sea horizon appears from centre-screen, rapidly expanding. Travelling towards, then between, two rows of wind turbines either side of an offshore oil rig in the centre. All features are shades of white or grey, except for the sea and sky, which are shades of blue. Passing close over the top of the rig, slowing down over the towers and silos, then moving on towards an urban shoreline where we pass over grey, featureless buildings and then between the illuminated skyscrapers of a city skyline.
At the same time, society is moving towards a lower carbon energy system to tackle climate change and meet the goal of The Paris Agreement.
The Paris Agreement Keeping the increase in global temperature to well-below 2°C
Speeding up once more, leaving the city behind, travelling along a road flanked on either side by blue photovoltaic cells, following a red car driving towards Paris. Accelerating over the top of the car, the road now flanked by green and grey-shaded trees, and passing over the top of the city, slowing to zoom in on the Eiffel Tower. The city is white, except for green and blue areas indicating vegetation and water.
Today’s energy system includes increasing amounts of renewables, but it still largely relies on fuels that release greenhouse gases. This reliance needs to change.
Global energy system
Wind Nuclear Solar
Coal Natural Gas Oil
The Paris city scene exits at lower frame, and text transitions in to display against a white background. Below the title, six icons expand into frame, to display in two rows with descriptive text below each icon, all slowly rotating or pulsing animatedly. Larger icons displaying in the top row are a wind turbine, an atom and a photovoltaic solar panel, indicating wind, nuclear and solar. Smaller icons displaying in the lower row are a lump of coal, a blue flame and an orange drop, indicating coal, natural gas and oil. Next, the top row of icons reduce in size, and the animated green circles around the wind and solar icons fade out; the lower row of icons expand in size and are encircled by animated red and orange rings.
Shell is a large company, providing some 3% of the world’s energy, we want to play our part.
3% of the world’s energy
The previous text and icons sequence reduces and exits at centre frame, while at the same time, an earth globe graphic contracts to fill centre frame, land indicated by green shading, and water by blue, with white lines of latitude and longitude intermittently traversing the globe. Text displays above the slowly rotating globe graphic, which is set against a grey grid-lined background.
This is what’s behind our net carbon footprint ambition to reduce the carbon intensity of our energy products, in step with society’s progress towards meeting the goal of the Paris Agreement.
Net Carbon Footprint Ambition
Around 20% by 2035 to around 50% by 2050
The globe graphic with text exits at top of frame, and an animated sequence slides up into frame. We slowly pan sideways over a bank of photovoltaic solar panels in the foreground, while in the background we see the white and grey outlines of an industrial power plant, and numerous wind turbines reaching up into a blue sky. Text displays at centre frame. In lower frame, while continuing to pan over the bank of solar panels, five white circles successively appear in a row, all encircled in red.
Our net carbon footprint includes the emissions associated with the energy products we sell.
Net Carbon Footprint
Production Transport Refining Distribution End-use
Use of carbon sinks
We speed up while panning over the solar panels, and as this scene exits at frame-left and the text exits at top of frame, the five circles expand to fill centre-frame in a staggered way, forming two rows of two and three circles respectively, and icons expand to fill each circle, while descriptive text displays below each circle. The icons are an oil platform, a vessel, a refinery, a fuel tanker and a blue and orange flame. Lines with animated arrows indicating flow direction connect each circle to the next one, forming a flow diagram. Title text displays at top of frame, and a ribbon of text moves across lower frame, then exiting at frame-right.
Around 15% of those emissions are caused by getting our products to customers, including during production, manufacture and transportation.
15% of emissions
Production Transport Refining Distribution
New title text at top of frame replaces the prior title. The fifth circle from the previous scene exits at frame-right, and the remaining four circles expand to fill the space. Again, the grey-shaded icons within the circles are of the oil platform, vessel, refinery and fuel tanker. The lines linking each circle to the next continue to indicate flow direction with animated arrows moving along the lines.
The remaining 85% of emissions are generated by our customers when they use our energy products.
85% of emissions
Car engine starting.
The previous sequence exits at frame-left, and a graphic slides over into frame-left, shaded predominantly in white and grey. The graphic is a close-up of a steering wheel, dashboard and ignition with blue key inserted. Text displays against a yellow background at frame-right, while the remaining background in upper and lower frame-right is shaded in blue. A hand appears in frame, stretching towards the ignition to turn the key. We see the red needles on the dashboard dials change position as the vehicle starts.
So our ambition includes those emissions too.
The previous sequence exits at frame-left, revealing a high angle view of cars on a road, flanked this time by intermittent petrol pumps, leading towards a city on the horizon. The graphics are again predominantly white and grey shaded, and the sky above indicated in blue. We pass over the tops of the two lanes of vehicles, the angle on the scene lowering to a street view.
Achieving our net carbon footprint ambition will mean making our operations more efficient. It will also mean changing the mix of what we sell.
The previous sequence exits lower frame, and another sequence enters upper frame, with consistent shading. This time, we see a panning bird’s eye view of an industrial plant, with red clouds rising from the plant into the blue sky, each labelled “CO2”. We pull back on the bird’s eye view of the plant, revealing the shoreline once more, and as we pull back over the ocean, we pass over the top of the storage tanks of a carrier vessel out in the ocean until we have a wide side view of the vessel in the ocean.
More cleaner burning, lower carbon natural gas.
We continue to pull back on an ever wider view of the carrier vessel in the ocean.
More renewable energy and more biofuels.
The previous sequence exits at frame-left, and another enters at frame-right, depicting a car parked at a Shell Recharge station, the charging plug stretching across and plugging into the car’s fuel port.
We will also store away more emissions underground.
Carbon capture storage
2000m CO2 Storage
The previous sequence exits lower frame, and another enters upper frame, while title text displays in upper frame-left. The sequence depicts a bird’s eye view of a power plant with a cutaway of the ground beneath, revealing substrata represented by different colours. Beneath the top layer, we have a light pink, a yellow and a grey-shaded layer. The middle yellow layer is dotted with red, and a red line and text indicate that the layer extends to over 200 metres below the surface. Three vertical channels run from the power plant on the surface through each successive layer and into the grey-shaded layer, labelled as “Storage”. Dotted lines indicate direction of flow from the surface, down the channels and through the substrata, into the lower layer, while text beside each channel labels this as “CO2” flow. One of the dotted lines shows the CO2 flow as moving down through the channel, along the storage layer, and then exiting at lower frame as it moves even deeper.
And invest in forests and wetlands which absorb carbon dioxide from the atmosphere.
We pull back on the previous animated sequence, and it recedes into the distance and disappears as we speed through and over a vast expanse of green trees and green-shaded vegetation, past rotating wind turbines and banks of photovoltaic solar panels flanked by buildings.
Our net carbon footprint ambition will mean changing what we sell over time. And the Shell of the future could be a radically different company as a result.
We continue to pull back over the banks of photovoltaic solar panels flanked by buildings, and we now see the green trees and vegetation at the horizon. We pull further back over a forested, mountainous area, and then out over the ocean, where we see a bird’s eye view of a carrier vessel in the ocean, before contracting and transitioning to a white background.
Shell brand mnemonic plays on keys.
Shell Pecten centred on a white background.
The world needs to take urgent action to tackle climate change. The Paris Agreement set a goal of keeping the rise in the global temperature well below 2° Celsius, and Shell strongly supports it. Our ambition is to make sure the energy we sell is in tune with society as it moves towards that goal.
To achieve the goal of the Paris Agreement, Shell believes the world is likely to have to stop adding to the stock of greenhouse gases in the atmosphere by 2070. This is a state known as net zero emissions.
But by 2070, the number of people on the planet will have risen by around a third from today to more than 10 billion, and people's living standards will have improved.
Together, these trends mean the world will use more and more energy.
Even with a huge improvement in energy efficiency, the world is likely to be using 50% more energy by 2070, compared to today.
Changing world: moving to a lower carbon energy system
2017 to 2050: The move to a lower carbon energy system
The need for change
The energy system the world has now cannot supply more energy and, at the same time, reduce greenhouse gas emissions like carbon dioxide. To achieve this, the system must change.
Today's energy system is largely tied to fuels that release greenhouse gases into the atmosphere when used.
In the future, that system must be made of products which, on average, release much lower levels of greenhouse gases for each unit of energy used.
In other words, they must have a lower carbon intensity, which Shell calls a carbon footprint. The products in the new energy system will include renewable electricity, biofuels and hydrogen, alongside oil and gas.
The three-part answer
Lowering the carbon intensity of the energy products in the energy system is one part of the answer. The second part of the answer is how those energy products are used: how much is consumed and how efficiently.
The third part of the answer is dealing with the carbon dioxide emissions that cannot be avoided. These will need to be removed and stored through natural processes like reforestation or by using technology.
Shell is a big company and we supply around 3% of the energy the world uses. We want to play our part and contribute to the global effort to tackle climate change as we provide energy the world needs.
We must also have a sustainable business model that is in tune with our customers. Shell cannot continue to be financially successful if it does not have this. To that end, Shell decided to set itself a challenging ambition.
We intend to cut the carbon intensity of the energy products we sell, in step with society as it moves towards the goal of the Paris Agreement.
That means fewer greenhouse gases emitted on average with each unit of energy we sell – by around 20% by 2035 and by around half by 2050.
And that includes all the emissions from the life cycle of each of our energy products: from production to processing, to transportation and through to final use. This is what we call our Net Carbon Footprint ambition.
The Paris Agreement: taking immediate action
While our ambition is long term, we believe we must act today. So beginning in 2019, we have set an unconditional three-year target to reduce our Net Carbon Footprint by 2% to 3% compared to 2016.
This target setting will then be done annually, with each year’s target covering either a three or five-year period. Our executives' pay is now linked, in part, to this target.
To ensure our Net Carbon Footprint ambition is consistent with the Paris Agreement, we looked into how the world could achieve its goal. We published the results of this work as our Sky scenario.
Using Sky, alongside work done by the International Energy Agency, we laid out a possible path that society could take towards Paris while also allowing enough energy use to enable living standards to rise. Our Net Carbon Footprint ambition is consistent with that path.
Governments, regulators and consumers also have a major role to play if the world is to achieve the goal of the Paris Agreement. The world must change the way it uses energy and the types of energy it demands. And if Shell is to meet our ambition we will have to be a part of this effort by changing what we sell.
Shell only controls its own emissions but by changing the mix of energy products we supply, we aim to help and influence others to lower their emissions.
Both energy demand and energy supply must evolve together. This is because no business can survive unless it sells things that people need and buy.
That is why we must remain in tune with society as it moves towards the goal of the Paris Agreement. If society changes its energy demands more quickly, we intend to aid that acceleration. If it changes more slowly, we will not be able to move as quickly as we would like. We will, however, have to move faster than society to make the same progress.
The energy product mix Shell sells today comes with a higher intensity of greenhouse gases than the average in today's global energy system.
One reason is that Shell's product mix includes only a relatively small amount of renewables. This means that we are behind. Our ambition means catching up.
The full range of emissions
This starts with ensuring our operations use energy as efficiently as possible. But this covers less than 15% of the greenhouse gases associated with our energy products. The rest are caused by customers when using our products: by driving their cars, for example.
So our Net Carbon Footprint ambition includes not only Shell's greenhouse gas emissions but also our customers' greenhouse gas emissions from their use of the energy products we sell to them.
That means that, while we will address the greenhouse gases created as we make our energy products, the Net Carbon Footprint ambition means far more for us. Over time, we must change the mix of the products we sell.
Meeting the ambition: how Shell could change
An infographic showing how Shell could change in the future
Instead of solely focusing on our operational emissions, we will seek to reduce our Net Carbon Footprint mainly by increasing the proportion of lower-carbon products in the mix we sell to our customers.
That means fewer products that come with higher levels of greenhouse gas emissions, and more and more products with lower-or-no emissions.
We will also sell more natural gas. This is because it is a flexible partner to renewable energy sources and can be used to generate electricity with around half the greenhouse gases of coal.
A further example is electricity produced using wind turbines or solar panels. Others are low-carbon biofuels and hydrogen.
Options for change
Lower-carbon options will take time to spread across the planet. Products that can be quickly adopted in one country or region will take longer to take hold in others due to existing infrastructure, wealth and other factors.
This holds true even for rapidly growing innovations like electric cars.
For some uses like planes, ships and heavy trucks, the lower-carbon answers are especially challenging and so oil will still be needed for decades to come. But we want to bring down our Net Carbon Footprint, even as we continue to sell fuels for these uses.
To do this, we will find ways to help nature act as a sponge to soak up excess emissions. Planting forests is an example. We will also use technology, for example by capturing greenhouse gases and storing them underground.
If we achieve our Net Carbon Footprint ambition, Shell will be a radically different company by 2050. What we sell will have changed. And that change will continue.
Here you can find more details on Shell’s Net Carbon Footprint ambition and how we plan to meet it.
How are we driving our business strategy in the context of climate-related risks and opportunities?
The Sky scenario illustrates a technically possible, but challenging pathway for society to achieve the goals of the Paris Agreement.
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