Shell said today that greenhouse gas (GHG) emissions resulting from its own operations — scope 1 and 2 emissions — decreased by 15pc year on year to 58mn t of CO2 equivalent (CO2e) in 2022. It said that calls to set targets to reduce scope 3 emissions, made through use of its production, would mean cutting its oil products and gas sales, and shareholders' returns.
Shell said it reduced its scope 1 and 2 emissions — what it calls its absolute emissions — by 30pc in 2022 compared with 2016, which is its base year. It has a goal to reduce its absolute emissions by 50pc by 2030, compared with 2016, and plans to be a net zero emissions company by 2050.
The firm's direct emissions — scope 1 — fell to 51mn t CO2e in 2022, from 60mn t CO2e in 2021 and 72mn t CO2e in 2016. Shell said cuts in absolute emissions were a result of divestments, including the sale of the 340,000 b/d Deer Park and 145,000 b/d Puget refineries in the US, the loss of its in OML 11 licence in Nigeria, and the shutdown or conversion of existing assets. It cited the shutdown of some units in Singapore, where it is rebranding its Pulau Bukom manufacturing site as an energy and chemicals park offering renewable products.
It said abatement projects and the purchase of electricity played a role in reducing emissions, but that the commissioning of its polymer facility in Monaca, US, partly offset the decreases. The firm said it did not use carbon credits to achieve scope 1 and 2 reductions in 2022.
Shell reported progress on methane emissions, which it includes in its scope 1 and 2 reporting. It reduced methane emissions from its operations by 27pc on the year to 40,000t, resulting in a slightly lower methane emission intensity, at 0.05pc compared with 0.06pc in 2021. It has a target to keep its methane emissions intensity for operated oil and gas assets — including LNG — below 0.2pc by 2025. Routine hydrocarbons flaring was reduced to 0.1mn t, from 0.2mn t in 2021, with around 50pc of flaring in its upstream and integrated gas facilities occurring in assets owned by the firm in Nigeria, Shell said.
Scope 3 commitment
Shell's emissions target covers scope 1 emissions, resulting from Shell's operations, and scope 2, coming from the energy needed to run its operations, but does not include scope 3 emissions generated through the consumption of the firm's production. They accounted for 95pc of the company's total in 2022. Shell's scope 3 emissions decreased by 10pc on the year to 1.174bn t CO2e, and by 24pc compared with 2016. The year on year decrease is largely the result of a reduction in oil product and gas sales, and a decrease in the intensity of power sold, Shell said.
Shareholder activist group Follow This is urging other shareholders at Shell, BP, ExxonMobil and Chevron to align their 2030 emissions reduction targets with the Paris climate agreement, which calls for global warming to stay "well below" a 2°C rise in pre-industrial temperatures and ideally limit it to a 1.5°C rise.
"The focus on Scope 3 by 2030 leaves the oil majors no wiggle room for smokescreens about ‘net zero emissions by 2050' or reduction targets for operational emissions — scope 1 and 2, around 5pc of emissions," Follow This said.
But Shell warned against calls to introduce medium-term targets to reduce absolute scope 3 emissions, ahead of its annual general meeting (AGM) on 24 May. It said it would have to cut its sales of oil products and gas to reduce its scope 3 emissions in line with the Follow This resolution.
"Doing so, without changing demand and the way our customers use energy, would effectively mean handing over customers to competitors, "the firm said, adding it would affect Shell's financial strength "materially" and "limits its ability to generate value for shareholders."
