Climate change and energy transitions

Shell supports the establishment of government-led carbon “pricing” mechanisms that deliver a meaningful cost on CO2 emissions, necessary to create a shift to a lower-carbon power and fuel options.

A carbon “pricing” mechanism is an effective way to stimulate investment in the development of low-carbon technologies and to create new energy choices. Government carbon “pricing” policies are designed to change the cost of goods and services, to favour those that result in lower emissions.

Both CO2 taxes and emissions trading systems could generate new revenue for governments and ensure that consumers are not affected by higher energy costs. Ideally this could create a virtuous circle in which emissions fall, while living standards continue to rise.

Read about the World Bank initiative on carbon pricing

We believe that a wide range of low-carbon transport options is needed. For example, greater use of electric vehicles in cities could help to reduce pollution, while hydrogen could become a viable and affordable transport fuel for electric vehicles.

Meanwhile, biofuels, liquefied natural gas (LNG) and other liquid hydrocarbons will continue to play a significant role in road, sea and air transport.

In addition to pilot projects bringing LNG to shipping and trucking customers, in 2017 we announced the opening of Shell’s first UK hydrogen filling station, following the success of sites in Germany where Shell is part of a joint venture with an ambition to open a network of up to 400 hydrogen sites by 2023. We are also under consideration for the installation of seven hydrogen refuelling stations in the US state of California.

Read about Shell and the future of transport

Media release: Shell to install nationwide network of hydrogen vehicle fuelling pumps in Germany

Greater use of low-carbon electricity to power our lives and economies is key to creating a lower-carbon future. Electricity’s share of the global energy total could grow significantly, spurred by greater use in heating and transport.

This increased use of electricity will need to come from lower-carbon sources, including renewables and natural gas if the world is to meet its energy needs and address climate change.

Just Transition is referenced in the Paris Agreement, as an acknowledgment that governments need to take into account the imperatives of a transitioning workforce during the shift to a low-carbon economy. The transition to a low-carbon energy future is necessary to manage climate change and it also needs to extend the economic and social benefits of sustainable energy to everyone on the planet. Shell endeavours to work with society in its move towards a low-carbon world while supporting workers and communities in a manner that is just, fair and inclusive. We recognise that the nature and pace of change will vary between countries and regions, reflecting different types of economies and development priorities.

We also support the ambitions of the UN Sustainable Development Goals and we feel that we can make the greatest contribution to Goals 7, 8 and 13. Building on our ambitions and to support a just transition, we seek opportunities to collaborate with a broad array of external stakeholders including governments, local communities, customers, employees and employee representative bodies, suppliers, industry and educational institutions to be a part of energy development plans, prepare for a low-carbon economy, and develop skills for the future. We are working in various countries to explore viable pathways towards a prosperous, low-carbon future tailored to individual country context.

As part of this process, we will continue to respect human rights in line with the legitimate role of business. We will also continue to respect and seek to implement workers’ rights, consistent with the ILO’s 1998 Declaration of the Fundamental Principles of Rights at Work, ILO occupational health and safety standards and seek to comply with applicable law and practice. We seek to work with contractors and suppliers who contribute to sustainable development and are economically, environmentally and socially responsible.

As our portfolio changes and impacts our assets, we seek to engage with and support employee representative bodies at a local level in each country. We do this with the aim to support employability of employees and the development of skills. 

We assess and engage on the impacts of our transitioning business activities with the aim to manage and reduce effects they may have on the lives of our workers, local communities and on the environment. We seek to foster the prosperity in the communities around us, contributing to local economic growth.