Greenhouse gas emissions

Greenhouse gas emissions (GHGs)

The direct greenhouse gas (GHG) emissions from facilities we operate (Scope 1) were 63 million tonnes on a CO2-equivalent basis in 2020, down from 70 million tonnes of CO2 equivalent in 2019.

The main reasons for this decrease were divestments (for example, in Canada and the USA) and the number of our facilities operating at reduced capacity due to lower demand driven by the COVID-19 pandemic. In addition, our Prelude floating liquefied natural gas installation in Australia did not run at full capacity in 2020. Overall flaring in our Upstream and Integrated Gas businesses decreased to 3.8 million tonnes of carbon dioxide equivalent in 2020 from 5.9 million tonnes of carbon dioxide equivalent in 2019.

The indirect GHG emissions from the energy we purchased (electricity, heat and steam) (Scope 2) were 9 million tonnes on a CO2-equivalent basis in 2020, down from 10 million tonnes of COequivalent in 2019. These emissions were calculated using the market-based method, as defined by the World Resources Institute GHG Protocol.

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

The equity share direct GHG emissions (Scope 1) were 98 million tonnes on a CO2-equivalent basis in 2020, down from 105 million tonnes of CO2 equivalent in 2019. The decrease was mainly due to due to divestments (e.g. in Canada and the USA) and the number of facilities operating at reduced capacity due to lower demand driven by the COVID-19 pandemic.

The equity share indirect GHG emissions from imported energy (Scope 2) were 9 million tonnes on a CO2 equivalent basis in 2020 (using the market-based method), down from 11 million in 2019.  These emissions were calculated using the market-based method, as defined by the World Resources Institute GHG Protocol.

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

We have achieved external verification of our 2020 direct (Scope 1) and energy indirect (Scope 2) GHG data under operational control and equity boundaries.

See our GHG Assurance tab for more details.

GHG Reporting

Visit our online Sustainability Report to read about our climate target and our Net Carbon Footprint 

Visit the performance data section in our online Sustainability Report 

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 2020 CDP

Visit the CDP website

GHG breakdown

GHG breakdown

Emissions by boundary and scope

Below we report emissions on an operational control (100% of emissions 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 - 2019
Operational
Control - 2020
Equity - 2019 Equity - 2020
Scope 1 70 63 105 98
Scope 2 (market-based method) 10 9 11 9
Scope 2 (location-based method) 11 11 12 10


The table below shows estimated Scope 3 emissions included in our Net Carbon Footprint.

Scope 3 (million tonnes CO2 equivalent)[A][B] 2019 2020
Purchased Goods and Services (Category 1)
Third-party products [C] 178 147
Fuel and energy-related activities (not included in Scope 1 or Scope 2) (Category 3)
Third-power power [D] 102 103
Use of sold products (Category 11)
Use of sold products [E][F] 1,271 1,054
Own production [G] 564 452
Third-party products [H] 708 602

[A] Emissions from retail sales volumes from markets where Shell operates under trademark licensing agreements are excluded.

[B] Estimated emissions from other Scope 3 categories are provided below.

[C] This category includes estimated well-to-tank emissions from purchased third-party refined oil products, natural gas, LNG, crude oil and biofuels.

[D] This category includes estimated well-to-tank emissions from generation of purchased power included in our Net Carbon Footprint.

[E] This category reflects estimated emissions from use-phase of our products.

[F] This category includes estimated emissions from sales volumes of oil products, natural gas, LNG, GTL and biofuels.

[G] This category includes estimated emissions from our refinery production, natural gas, LNG and GTL products.

[H] Estimated as the difference between own production and total sold products.

See a more detailed breakdown of our 2019 Scope 3 (other indirect) emissions.

Emissions by business sector

Here we report the breakdown of emissions by business sector. These are the Scope 1 and Scope 2 emissions on both an operational control and equity basis reported in million tonnes CO2 equivalent.

Direct (Scope 1)

Sector

Operational
Control - 2019

Operational
Control - 2020

Equity - 2019

Equity - 2020
Downstream (including shipping and oil sands) 40.3 35.7 57.3 53.2
Upstream 12.9 12.8 21.7 20.1
Integrated Gas & Renewables and Energy Solutions 16.3 14.1 25.9 24.2
Other 0.2 0.2 0.2 0.2

Energy Indirect (Scope 2) (market-based method)

Sector

Operational
Control - 2019

Operational
Control - 2020
Equity - 2019 Equity - 2020
Downstream (including shipping and oil sands) 7.3 7.0 8.0 7.1
Upstream 1.1 0.6 1.2 0.7
Integrated Gas & Renewables and Energy Solutions 1.6 1.5 1.1 1.0
Other 0.2 0.1 0.2 0.1

Emissions intensity

Below we report GHG emission intensities for Upstream and Integrated Gas, refining and chemical facilities under our operational control (100% of direct (Scope 1) and energy indirect (Scope 2) GHG emissions normalised by an appropriate production value).

Emissions Intensity  Units of measure 2019 2020
Upstream and Integrated Gas [A] Tonne CO2 equivalent / tonne of hydrocarbon production available for sale 0.168 0.159
Chemicals [B] Tonne CO2 equivalent / tonne of steam cracker high value chemicals produced 1.04 0.98
Refineries [C] Tonne CO2 equivalent / UEDCTM 1.06 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

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 2020 direct and energy indirect data under operational control

2. Limited assurance of the 2020 Scope 3 emissions included in Net Carbon Footprint

3. Limited assurance of the 2020 direct and energy indirect data on an equity basis

In addition, we undertake external verification to a level of reasonable assurance at the majority of the major installations where we have operational control. The reasonable assurance audits at the major installations 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 2020 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

Shell’s carbon intensity is measured using the Net Carbon Footprint (NCF) metric and methodology. The intensity is determined by first estimating the individual emissions intensities 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. 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 with the assurance statements becoming 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
  4. Limited assurance of the 2019 Net Carbon Footprint
  5. Limited assurance of the 2020 Net Carbon Footprint

Shell also submits the individual supply chain intensities for external assurance and the disaggregated NCF Assurance certificates below show the carbon intensity of our energy products from 2016 to 2020.

  1. Disaggregated NCF Assurance Statements 2016
  2. Disaggregated NCF Assurance Statements 2017
  3. Disaggregated NCF Assurance Statements 2018
  4. Disaggregated NCF Assurance Statements 2019
  5. Disaggregated NCF Assurance Statements 2020

Further information on Shell’s NCF methodology is available in the following report.

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 opportunities.

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

Annual Report:
(pages 96/97) “Our governance of climate change”, (pages 143/144) “Governance – Safety, Environment and Sustainability Committee”, and (pages 186/187) “Risk management and controls”

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

Annual Report: (page 96/97) “Our governance of climate change”

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: (pages 18-21) “Strategy and outlook”, “Powering Progress”

Annual Report: (pages 98) “Climate related risks and opportunities”

CDP 2020 Climate Change submission: sections C2.2/2.3/2.4 Risks and Opportunities

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

Annual Report: (pages 98/99) “Impact of climate related risks and opportunities on strategy, planning and business”

Annual Report: (pages 94/95) introduction of “Climate change and energy transition”, “Shell´s absolute emissions and carbon intensity targets”, “How we plan to deliver”, and “Transparency and collaboration”

CDP 2020 Climate Change submission: section C3 Business Strategy

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

Annual Report: (pages 98/99) “Impact of climate related risks and opportunities on strategy, planning and business”

Annual Report: (page 99) “Our climate target”

Scenarios: How are Shell scenarios used?

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: (page 97) “Climate change risk management process”, (page 101) “Impact of physical risks and adaptation measures”

Sustainability Report: (page 17): “About this report”

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

Annual Report: (page 96/97) “Our governance of climate change”, “Reorganisation in line with updated strategy”

Annual Report: (page 98) “Climate change risk management at project level”

Annual Report: (pages 101-105) “Our portfolio and climate change”, “Natural gas”, “Methane emissions”, “Methane initiatives and collaborations”, “Renewables and energy solutions”, “Power”, “Low-carbon fuels”, “Carbon capture and storage”, “Nature-based solutions”

Sustainability Report: (pages 36-60) “Achieving net-zero emissions”

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

Annual Report: (pages 186/187) “Risk management and controls”

Sustainability Report: (page 7/8): “Our approach to sustainability”

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: (page 98-103): “Greenhouse gas and energy data”

Annual Report: (page 100) “Our net carbon intensity targets", (page 164/165) "Annual Report on Remuneration"

Sustainability Report: (page 13/14) “Executive remuneration”

b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks.

Corporate webpagePerformance data on Scope 1, 2, and 3

Annual Report: (page 29) “Risk Factors”

c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

Annual Report: (page 99) “Shell´s absolute emissions and carbon intensity targets”, (page 105-107) “Our performance”

Annual Report: (page 45) “Performance indicators: safety and environment”

Sustainability Report: (page 10/11) “Performance highlights”; (page 36-60) “Achieving net-zero emissions” (page 95/96) “Our Powering Progress targets”

Annual Report: (page 156) “Evolving remuneration in line with strategy”

Corporate webpage: Our climate target: frequently asked questions

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