Greenhouse gas emissions

Greenhouse gas emissions (GHGs)

The direct greenhouse gas (GHG) emissions from facilities we operate (Scope 1) were 60 million tonnes on a CO2-equivalent basis in 2021, down from 63 million tonnes of CO2 equivalent in 2020.

This decrease was in part driven by the shutdown of the Shell Convent Refinery (USA) in late 2020, lower production at the Shell Norco Manufacturing Complex (USA) due to Hurricane Ida, and divestments in 2020 and 2021, which included the Martinez and Puget Sound refineries in the USA and the Fredericia refinery in Denmark. These decreases were partly offset by higher emissions due to the restart of the Prelude floating liquefied natural gas (FLNG) facility in Australia (which was shut down for most of 2020) and increased flaring at Shell Nigeria Exploration and Production Company Limited (SNEPCo) in Nigeria.

The indirect GHG emissions from the energy we purchased (electricity, heat and steam) (Scope 2) were 8 million tonnes on a CO2-equivalent basis in 2021, compared with 8 million tonnes of COequivalent in 2020. 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 91 million tonnes on a CO2-equivalent basis in 2021, down from 98 million tonnes of CO2 equivalent in 2020. The decrease was mainly driven by the shutdown of the Shell Convent Refinery (USA) in late 2020, lower production at the Shell Norco Manufacturing Complex (USA) due to Hurricane Ida, and divestments in 2020 and 2021 (e.g. in the USA).

The equity share indirect GHG emissions from imported energy (Scope 2) were 9 million tonnes on a CO2 equivalent basis in 2021, compared with 9 million in 2020. 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 2021 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 Annual Report to read about our climate target, our Net Carbon Footprint methodology and our net carbon intensity.

Visit the performance data section in our online Sustainability Report - Greenhouse gas and energy data - Shell Sustainability Report 2021

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 2022 CDP Climate Change response

Visit the CDP website

Shell and the Transition Pathway Initiative (TPI)

We are working with standard-setting bodies including TPI to help develop a standard for our industry, with which we intend to align our climate targets.

Read about how we are working to present our climate target in an industry-aligned way

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 - 2020
Operational
Control - 2021
Equity - 2020 Equity - 2021
Scope 1 63 60 98 91
Scope 2 (market-based method) 8 8 9 9
Scope 2 (location-based method) 10 9 10 10

The table below shows estimated Scope 3 emissions included in our net carbon intensity.
 

Scope 3 (million tonnes CO2 equivalent)[A][B] 2020 2021
Purchased Goods and Services (Category 1)
Third-party products [C] 147 147
Fuel and energy-related activities (not included in Scope 1 or Scope 2)
Third-power power [D] 103 136
Downstream Transportation and Distribution (Category 9)
Sold own energy products [E] 6
Use of sold products (Category 11)
Use of sold products [F] 1,054 1,010
Own production [G] 452 380
Third-party products [H] 602 630

[A] The values in this table reflect estimated Scope 3 emissions included in our net carbon intensity. This excludes certain contracts held for trading purposes and reported net rather than gross. Business-specific methodologies to net volumes have been applied in oil products and pipeline gas and power. Paper trades that do not result in physical product delivery are excluded. Retail sales volumes from markets where Shell operates under trademark licensing agreements are also excluded from the scope of Shell’s carbon intensity metric.

[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-wire emissions from generation of purchased power included in our net carbon intensity.

[E] Estimated emissions from transportation and distribution of sold own oil products, LNG, GTL, natural gas, and biofuels.

[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 2020 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 - 2020
Operational
Control - 2021
Equity - 2020 Equity – 2021
Downstream (including shipping and oil sands) 35.8 32.6 53.2 47.6
Upstream 12.8 11.7 20.1 18.5
Integrated Gas & New Energies 14.1 15.5 24.2 24.5
Other 0.2 0.2 0.2 0.2

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

Sector

Operational
Control - 2020

Operational
Control - 2021
Equity - 2020 Equity - 2021
Downstream (including shipping and oil sands) 6.0 5.6 7.1 6.7
Upstream 0.6 0.6 0.7 0.7
Integrated Gas & New Energies 1.5 1.4 1.0 1.1
Other 0.1 0.1 0.1 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 2020 2021
Upstream and Integrated Gas [A] Tonne CO2 equivalent / tonne of hydrocarbon production available for sale 0.159 0.172
Chemicals [B] Tonne CO2 equivalent / tonne of steam cracker high value chemicals produced 0.98 0.95
Refineries [C] Tonne CO2 equivalent / UEDCTM 1.05 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 2021 direct (Scope 1) and energy indirect (Scope 2) emissions under operational control

  Greenhouse gas emissions inventory report – Shell Group (covering Scope 1 and Scope 2 emissions under operational control)

2. Limited assurance of the 2021 Scope 3 emissions included in net carbon intensity

3. Limited assurance of the 2021 direct (Scope 1) and energy indirect (Scope 2) emissions on an equity basis

   Greenhouse gas emissions equity inventory report – Shell Group (covering Scope 1 and Scope 2 emissions using equity boundary)

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 2021 direct (Scope 1) and energy indirect (Scope 2) emissions 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 net carbon intensity is tracked, measured and reported using the Net Carbon Footprint (NCF) 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.

A weighted average of the individual energy product intensities is then calculated, 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 intensity as the grams of CO2 equivalent per megajoule (gCO2e/MJ) of energy sold by Shell.

We undertake external verification of our net carbon intensity values to a level of limited assurance at the Shell Group level. This external verification takes place in February with the assurance statements becoming available in March.

Shell also submits the individual energy product intensities for external assurance. The disaggregated NCF assurance statements below show the net carbon intensity of our energy products from 2016 to 2020. From 2021, the disaggregated intensity data have been integrated into a single assurance statement.

Further information on Shell’s NCF methodology is available in the following document:

 

TCFD

Shell welcomes the recommendations of the Task Force on Climate-related Financial Disclosures (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, and targets and metrics. This table shows where to find Shell disclosures that are related to recommendations by the TCFD in Shell’s Annual Report and Accounts 2021.

TCFD Recommendation Shell 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 and Accounts 2021:
(pages 76-78) “Governance of climate-related risks and opportunities”
(page 135/136) Governance framework – Board Committees,
(page 151/152) “Governance – Safety, Environment and Sustainability Committee”
(pages 202-204) “Risk management - Control framework”
 

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

Annual Report and Accounts 2021:
(pages 76-78) “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 and Accounts 2021:
(page 9) “How we create value”,
(pages 12-15) “Our strategy”“Business pillars”"Outlook for 2022 and beyond",
(pages 79-82) “Climate-related risks and opportunities identified by Shell over the short, medium and long term

 

 

b) Describe the impact of climate-related risks and opportunities on the organization’s businesses, strategy, and financial planning. Annual Report and Accounts 2021:
(page 82/83) “Impact of climate related risks and opportunities on Shell's businesses, strategy, and financial planning”
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 and Accounts 2021:
(pages 83-85) “Resilience of Shell's strategy, taking into consideration different climate-related scenarios, including a two degrees Celsius or lower scenario”
(page 89) “Climate-related targets summary”

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 and Accounts 2021:
(page 86/87) “Shell's process for identifying and assessing climate-related risks; assessing climate-related risks; classification of risks"
b) Describe the organization’s processes for managing climate-related risks. Annual Report and Accounts 2021:
(page 87/88) “Shell's process for managing climate-related risks; integration of the climate-related risk management process into Shell's overall risk management”
c) Describe how processes for identifying, assessing, and managing climate-related risks are integrated into the organization’s overall risk management. Annual Report and Accounts 2021:
(pages 86-88) “Shell's process for managing climate-related risks; integration of the climate-related risk management process into Shell's overall risk management”

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. Annual Report and Accounts 2021:
(pages 89-91) “Metrics used by Shell to assess climate-related risks and opportunities in line with its strategy and risk management process",(pages 166, 172, 174-176) "Directors' Remuneration Report - Annual Report on Remuneration"
b) Disclose Scope 1, Scope 2, and, if appropriate, Scope 3 greenhouse gas (GHG) emissions, and the related risks. Annual Report and Accounts 2021:
(pages 91-93) "Scope 1, Scope 2, and Scope 3 greenhouse gas emissions, and the related risks"
c) Describe the targets used by the organization to manage climate-related risks and opportunities and performance against targets.

Annual Report and Accounts 2021:
(pages 89, 93-96) “Targets used by Shell to manage climate-related risks and opportunities and performance against targets”

 

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