Greenhouse gas emissions GHGs

Greenhouse gas emissions (GHGs)

The direct greenhouse gas (GHG) emissions from facilities we operate were 71 million tonnes on a CO2-equivalent basis in 2018, down from 73 million tonnes of CO2 equivalent in 2017.

The main contributors to this decrease were divestments (for example, in Argentina, Canada, Gabon, Iraq, Malaysia and the UK). The level of flaring in our Upstream and Integrated Gas businesses combined decreased by more than 35%, compared to 2017, primarily as a result of the Majnoon divestment in Iraq. These decreases were partly offset by inclusion of the facilities previously operated by the Motiva Enterprises LLC joint venture in our data for the full year in 2018, increased production at our Pearl gas-to-liquids (GTL) plant in Qatar, and the start-up of our Prelude floating liquefied natural gas (FLNG) facility in Australia.

The indirect GHG emissions from the energy we purchased (electricity, heat and steam) were 11 million tonnes on a CO2-equivalent basis in 2018, down from 12 million tonnes of COequivalent in 2017. These emissions were calculated using a market-based method, as defined by the World Resources Institute GHG Protocol.

We expect that maintaining the energy efficiency levels of recent years will be more difficult in the future as existing fields age and new production comes from more energy-intensive sources. This could result in an associated increase in direct GHG emissions from our upstream facilities over time.

We use global warming potentials (GWP) from the Fourth Assessment Report of the Intergovernmental Panel on Climate Change on a 100 years time horizon for calculating GHG emissions since 2015. GWP compares the impact of emissions from GHGs with the impact of emissions from the equivalent amount of CO2.

For information on the limitations of our GHG data see the GHG Assurance tab.

We have achieved external verification of our 2018 direct and energy indirect GHG data from facilities we operate.

See our GHG Assurance tab for more details.

Download the Petroleum Industry Guidelines for Reporting Greenhouse Gas Emissions

Footnote: This edition of the Petroleum Industry Guidelines of May 2011 (API, IPIECA, OGP) has revised chapters on organizational boundaries, references to scope 1, 2 and 3 emissions and uncertainty.

GHG Reporting

Visit our online sustainability report to read about our GHG emissions

Download our response to shareholder resolution on climate change

Find out more about our climate change public policy positions

Find out more about our portfolio resilience

Visit our performance data section on the Online Sustainability Report 2017

Shell and the CDP (formerly the Carbon Disclosure Project)

Read more about our approach to climate change in our public response to the Carbon Disclosure Project.

Download our response to the 2018 CDP Climate Change Information Request

Visit the CDP website

GHG breakdown

GHG breakdown

Emissions by boundary and scope

Below we report emissions on an operational control (100% of emission from companies and joint ventures where we are the operator) and equity basis (equity share of emissions from companies and joint ventures).

The direct (Scope 1) emissions come from the facilities under the operational control or the equity boundary. The energy indirect (scope 2) emissions come from the facilities of others that provide electricity or heat and steam to our operations.

Scope
(million tonne CO2 equivalent)
Operational
Control - 2017
Operational
Control - 2018
Equity - 2017 Equity – 2018
Direct (Scope 1) 73 71 97 95
Energy indirect (Scope 2) 12 11 13 11


Scope 3 emissions are those emissions that we estimate come from the use of our refinery and natural gas products as reported in the Annual Report.

Scope Annual Report boundary Annual Report boundary
million tonne CO2 2017 2018
Use of our refinery and natural gas products (Scope 3) 579 599

See a more detailed breakdown of our 2017 scope 3 (other indirect) emissions.

Emissions by business sector

Here we report the breakdown of emissions by business sector. These are the direct and energy indirect emissions on both an operational control and equity basis reported in million tonnes CO2 equivalent.

Direct (Scope 1)

Sector

Operational
Control - 2017

Operational
Control - 2018

Equity - 2017

Equity – 2018
Downstream (including shipping and oil sands) 41.1 42.2 47.1 47.1
Upstream 19.6 14.8 25.4 22.2
Integrated Gas & New Technologies 12.0 13.0 24.1 25.3

Energy Indirect (Scope 2)

Sector

Operational
Control - 2017

Operational
Control - 2018

Equity - 2017

Equity – 2018
Downstream (including shipping and oil sands) 7.5 6.8 9.2 7.9
Upstream 1.4 1.4 1.3 1.3
Integrated Gas & New Technologies 2.4 2.4 2.0 1.9

Emissions intensity

Below we report emission intensities for Upstream and Integrated Gas, refining and chemical facilities under our operational control (100% of direct and energy indirect GHG emissions normalised by an appropriate production value).

 

Emissions Intensity  Units of measure 2017 2018
Upstream and Integrated Gas  [A] Tonne CO2 equivalent / tonne of hydrocarbon production available for sale 0.166 0.158
Chemicals [B] Tonne CO2 equivalent / tonne of steam cracker high value chemicals produced 0.95 0.96
Refineries [C] Tonne CO2 equivalent / UEDCTM 1.14 1.05

[A]  In tonnes of total direct and energy indirect GHG emissions per tonne of oil and gas available for sale, liquefied natural gas and gas-to-liquids production in Integrated Gas and Upstream.

[B] High value chemicals include olefin products (ethylene and propylene) plus the contained butadiene, benzene, acetylene, and high purity hydrogen production.

[C] UEDCTM (Utilised Equivalent Distillation Capacity) is a proprietary metric of Solomon Associates. It is a complexity-weighted normalisation parameter that reflects the operating cost intensity of a refinery based on size and configuration of its particular mix of process and non-process facilities.

GHG Assurance

We undertake external verification of our operational control and equity GHG data to a level of limited assurance at the Shell Group and business level. The operational control verification for the previous year’s data is undertaken in February and the equity work is undertaken in May. The assurance statements become available in March and June respectively.

1. Limited assurance of the 2018 direct and energy indirect data under operational control

2. Limited assurance of the 2018 scope 3 emissions from the use of refinery products and natural gas

3. Limited assurance of the 2018 direct and energy indirect data on an equity basis

In addition, we undertake external verification to a level of reasonable assurance at the major installations where we have operational control. These audits are conducted under the local regulated scheme or, in the absence of regulation, under Shell’s own program which uses external auditors from a variety of organisations.

Reasonable assurance of the 2018 direct and energy indirect data under operational control

Challenges with equity data

Approximately one quarter of the equity data comes from sources outside our data systems and carries potentially greater uncertainty. The quantification and hence verification of equity emissions takes longer than operational control emissions as we are dependent on receiving data from other parties and reporting timelines vary.

Net Carbon Footprint Assurance

NCF assurance

The Net Carbon Footprint (NCF) is determined by first estimating the emissions intensity for each of the energy product supply chains in Shell’s portfolio; this is done using established lifecycle analysis principles and includes both the emissions associated with the production and processing of energy products and the emissions associated with their use. The individual intensities are then aggregated into a single value, with the weighting for each product determined by its sales volume, emissions captured in sinks are deducted to give the final net value.

Shell’s Net Carbon Footprint values for 2016, 2017 and 2018 are shown in the assurance statements below. We express our Net Carbon Footprint as the grams of CO2 equivalent per megajoule (gCO2e/MJ) produced for each unit of energy delivered to, and used by, a consumer.

We undertake external verification of our Net Carbon Footprint values to a level of limited assurance at the Shell Group level. This external verification takes place around February. The assurance statements become available in March.

1. Limited assurance of the 2016 Net Carbon Footprint
2. Limited assurance of the 2017 Net Carbon Footprint
3. Limited assurance of the 2018 Net Carbon Footprint

TCFD

Shell welcomes the recommendations of the Task Force on Climate-related Financial Disclosures (TCFD)

The TCFD is a global initiative to get companies across all sectors to assess climate-related risks and opportunities. It recommends that companies disclose information in four areas: Governance, Strategy, Risk Management, Targets and Metrics. Shell supports the work and objectives of the TCFD. 

Shell discloses TCFD-relevant information through different channels:

  • The Shell Annual Report/20-F provides information on our governance and risk management of climate change.
  • Our Shell Energy Transitions Report describes our strategy to remain resilient and thrive through climate-related risks and opportunities.
  • The annual Shell Sustainability Report publishes relevant climate-related emissions performance data.
  • Periodic Shell scenario publications share our analysis and understanding of the ways the energy system could evolve over the long term.
  • Our company website contains further relevant information such as equity emissions performance data, executive speeches, feature articles and news items. 

This table shows where to find Shell disclosures that are related to recommendations by the TCFD in Shell reports, publications and websites: 

TCFD Recommendation Disclosure

Governance: Disclose the organization’s governance around climate-related risks and opporDisclose the organization’s governance around climate-related risks and opportunities.

a) Describe the Board’s oversight of climate-related risks and opportunities.

Annual Report (page 71-73): “Our governance and management of climate change risks and opportunities” section, including references to the Reports’ sections “Corporate governance” (page 95) and ”Directors’ Remuneration Report” (page 119)

b) Describe management’s role in assessing and managing climate-related risks and opportunities.

Annual Report (page 71-73): “Our governance and management of climate change risks and opportunities”

Strategy: Disclose the actual and potential impacts of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning where such information is material. 

a) Describe the climate-related risks and opportunities the organization has identified over the short, medium, and long term.

Annual Report (page 75-77): “Our strategy on climate change”

CDP submission: Describes detailed examples

b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning.

Annual Report (pages 75-77): “Our strategy on climate change”

Shell Energy Transitions Report (page 24):  “Our resilience in the medium term, to 2030”

c) Describe the resilience of the organization’s strategy, taking into consideration different climate-related scenarios, including a 2°C or lower scenario.

Shell Energy Transitions Report (page 50): “Changing our portfolio in the long term, after 2030”

Sky Scenario: Describes our scenarios approach 

Risk management: Disclose how the organization identifies, assesses, and manages climate-related risks.

a) Describe the organization’s processes for identifying and assessing climate-related risks.

Annual Report (pages 71-73): “Our governance and management of climate change risks and opportunities”

Sustainability Report section(page 6): “About this report”

b) Describe the organization’s processes for managing climate-related risks.

Annual Report (pages 71-73): “Our governance and management of climate change risks and opportunities” and “Our portfolio and climate change”

Sustainability Report sections (pages 46/47 and 13): “Climate change and energy transition" and “Embedding sustainability into projects”

c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management.

Annual Report (page 103/104): “Controls and procedures”

Sustainability Report (page 12): “Sustainability at Shell”

Metrics and targets:  Disclose the metrics and targets used to assess and manage relevant climate-related risks and opportunities where such information is material.

a) Disclose the metrics used by the organization to assess climate-related risks and opportunities in line with its strategy and risk management process. Sustainability Report (pages 83, 49-54 and 20): “Environment data”, “Managing greenhouse gas emissions” and “Our Executive scorecard”
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

Greenhouse gas webpage: www.shell.com/ghg: provides our performance data on Scope 1,2,3

Shell Energy Transitions Report (page 24): “Our resilience in the medium term, to 2030”

c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets. Annual Report (pages 75-77): “Our strategy on climate change”

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