17.3 C
Wednesday, June 16, 2021
Home General Shell Agrees to Speed Up Emissions Cuts After Dutch Court Ruling

Shell Agrees to Speed Up Emissions Cuts After Dutch Court Ruling

- Advertisement -

By Laura Hurst (Bloomberg) —

Royal Dutch Shell Plc will accelerate its carbonemission cuts following a Dutch court ruling last month that said the company’s climate plans weren’t sufficient.

The oil and gas giant still expects to appeal the verdict and believes it has been unjustly singled out, Chief Executive Officer Ben van Beurden said Wednesday. However, the company also feels “determination to rise to the challenge” posed by the ruling, he said.

A court in The Hague on May 26 ordered Shell to slash its emissions harder and quicker than planned, after determining that the company’s strategy didn’t go far enough. The verdict could have farreaching consequences for the rest of the global fossil fuel industry.

“We will seek ways to reduce emissions even further in a way that remains purposeful and profitable,” Van Beurden said in a statement posted on LinkedIn. “That is likely to mean taking some bold but measured steps over the coming years.”

Also see: Shell Only Has Hard Options to Meet Dutch Court’s Climate Order

Oil majors have come under intense pressure to curtail greenhouse gases and ramp up investments into cleaner sources of energy. On the same day that Shell was ordered to do more on emissions, investors ousted two Exxon Mobil Corp. board members and Chevron Corp. shareholders voted in favor of a proposal to reduce pollution from its own customers.

Shell’s own plan involves cutting the intensity of its emissions — a measure of the energy needed to produce a unit of oil or gas, for example — by 20% by 2030. That compares with the judge’s order to reduce its absolute emissions by 45%, after the Dutch arm of Friends of the Earth sued Shell for violating human rights.

No Easy Options

Van Beurden, 63, didn’t say how the company will accelerate its transition plan and there are no easy options. The oil major could increase the $3 billionayear ceiling it has earmarked for renewables and lowcarbon technologies, but these businesses remain less profitable than its core hydrocarbons segment. Carbon sequestration and hydrogen production — key to Shell’s plans — are still in their infancy and rely on government subsidies.

The principal way Shell has removed emissions from its ledgers so far is the sale of assets. But of course those greenhouse gases aren’t eliminated; they’re simply transferred onto the books of whoever is buying the oil and gas fields. Such divestments can even result in higher emissions under new operators.

Shell plans to shrink its oil production by as much as 2% annually. But Van Beurden on Wednesday cautioned against focusing on reducing supply. The company could lessen its carbon footprint by selling no more gasoline and diesel, but demand for those fuels wouldn’t change, he said. “People would fill up their cars and delivery trucks at other service stations.”

Mixed Support

Shell’s own shareholders have given a mixed reaction to its transition plans. At its annual general meeting in May, the company received 89% support for its climate strategy — something that the court didn’t take into consideration — Van Beurden said. Still, 30% of investors also voted in favor of a competing proposal asking the major to set more stringent emissions targets.

The AngloDutch company is boosting investments in cleaner sources of energy, but it expects to continue pumping and selling oil and gas “for a long time to come,” to “maintain a financially strong company,” according to Van Beurden.

The strategy is not dissimilar to its European peer BP Plc’s which, despite targeting a 40% cut in output this decade, referred to oil and gas as the “engine room” of the company that will fund its transition away from hydrocarbons. BP and Shell have labored to convince its investors that they can boost renewables returns, which historically are around 5% to 6%, thanks to their extensive trading organizations among other factors.

Shell’s B shares were up 0.9% trading at 1,329 pence at 2:31pm in London, compared with the Stoxx Europe 600 Oil & Gas index which was flat on the day.

Ultimately, just forcing Shell to cut its emissions won’t solve the problem, Van Beurden said. “The energy transition is far too big a challenge for one company to tackle.”

© 2021 Bloomberg L.P.

#Shell #Agrees #Speed #Emissions #Cuts #Dutch #Court #Ruling


Cocaine Smuggled Aboard Cruise Ship Seized at Port Everglades

Cruise ship operations are poised to resume in the United States, which will be welcomed by cruise lines...

Thai bulkers in Q1 and optimism

Precious Shipping Plc Q1Precious Shipping Plc. (PSL) boasted a first quarter profit of $12.3m, from a loss...

Judge Orders Offshore Drilling Leasing to Resume in Setback for Biden

By Nichola Groom June 15 (Reuters) – A federal judge in Louisiana on Tuesday blocked the Biden administration’s pause on oil and gas leasing on...


Please enter your comment!
Please enter your name here

- Advertisment -

Most Popular

Nigeria to release tanker named San Padre Pio

It was learned that Nigeria would release a tanker named San Padre Pio with the Swiss flag, which he seized and seized while transferring...

Kuzey Star Shipyard will complete the floating port construction in 29 months

FSUE Atomflot, operating under the Russian State Atomic Energy Agency Rosatom, and the Turkish Kuzey Star Shipyard signed the agreement for the construction of...

Russia begins Agile Dagger 2021 Exercise in the Pacific Ocean

The Russian Ministry of Defense announced that the Pacific Ocean Fleet has started the largest exercise in the Pacific Ocean since the USSR era,...

Swimmer Alper Sunaçoğlu will swim from Anamur to Girne

Record-breaking swimmer Alper Sunaçoğlu will swim from Anamur to Girne on the anniversary of the 20 July Cyprus Peace Operation.Record-breaking swimmer Alper Sunaçoğlu aims...

Recent Comments