Working together to achieve change
Sep 23, 2020
Speaking at the virtual event Energy Visions, Huibert Vigeveno, Shell’s Director of Downstream, outlines the importance of working across sectors to achieve lasting change.
Thank you for the introduction Aitor, and thank you all for joining this event… Whether it is virtually, or in person at the studio… Whether you are watching right now, or perhaps a little later. In fact, those different ways show me how ingenious, determined and versatile society can be when there is so much at stake. Whether we face challenges as serious as Covid-19 or climate change… we know we have to keep talking to each other, working together and finding the best ways to take action.
The European Union’s Green Deal is an excellent example of the kind of action the world needs to tackle climate change. Shell supports its target of achieving climate neutrality by 2050. This target means finding ways to stop adding to the stock of greenhouse gases in the atmosphere in just a few decades – in other words, achieving net zero emissions... and doing it very, very fast.
Last week, President von der Leyen announced the increase of the EU’s 2030 climate target to a 55% reduction of greenhouse gas emissions. This is a huge challenge... But it is one that Shell supports. The 55% target would put the EU on a clear path towards climate neutrality. It would also provide the long-term certainty that business needs to invest in lower-carbon projects.
In practice, this goal requires decisive policy action… Action to cut emissions at a faster rate across all sectors at the same time… and to support the industrial competitiveness of the EU. And it is here that the Economic Recovery Instrument has a key role to play. The EU’s Emissions Trading System would also need reform. Industry in the EU must be kept competitive in relation to carbon costs. As for carbon sinks… There must be a massive speeding up and increase in their role.
And finally, a sectoral approach will be crucial to success and should be at the heart of the Green Deal. This approach is about identifying a path to net zero for each sector – and I will explain how later. The challenge may be great... but the Green Deal is one way to turn ambitious plans into urgent action.
And we all need to take urgent action. Shell’s own ambition is to be a net-zero emissions energy business by 2050 or sooner, in step with society and our customers. We will work towards this in three ways. First, we aim to be net-zero emissions from making our products. Second, 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 with sectors that use energy... like aviation, heavy freight and shipping. We will help them find their own path to net zero. And this is the sectoral approach that I will outline.
Our ambition will mean working with others in a way and at a scale we have not seen before. And the business plans we have today… will not make Shell’s ambition a reality. Over time, those plans will have to change, as society and our customers also change.
So, demand is key… and this is where policy is key. For instance, in Germany, at our Rhineland refinery, Shell is working with partners to build the world’s largest PEM-electrolyser to produce hydrogen using renewable energy. This production of so-called “green hydrogen” is a significant step in testing the feasibility of a hydrogen network on a large, industrial scale. The hydrogen would be used not only in the chemical processing at the site... but in future, it could also supply cars and lorries at retail sites. We have the infrastructure, the system and the people to do it… but we need the right policies to encourage demand.
These complex dynamics are why Shell is focusing on a sectoral approach. In brief, this approach means working with others to synchronise the demand for lower-carbon energy in key sectors… with the investment in infrastructure and supply. Balancing supply and demand. And this is especially important in the sectors where change is hardest to achieve. Sectors like road freight and industry, both represented here today, or aviation… or shipping.
Fru Guteland the work you have sponsored on a sectoral approach is very encouraging. I hope it can become a guiding principle for the implementation of the Green Deal… because it would ensure that each key economic sector has a clear route to net zero.
And while the action needed in each sector will vary… I believe that they all share the same three ways to make progress. First, improve energy efficiency. Second, turn to lower-carbon energy products. Third, offset or store away emissions that cannot be avoided.
The businesses that make up each sector must come together and work out how to take action in each area that leads to net zero. They need to get to a point where they can say: “This is the path to net zero. These are the things that could block it. And this is what we need to succeed.” And… to complete the picture… that is when sectors need policy-makers to step in. To remove those blocks. To clear the way for success.
I believe that this is how to turn ambitious plans into urgent action. It is how we can work together to achieve real and lasting change. And it will be essential if the EU wants to achieve its bold targets.
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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.