The energy company Shell has watered down a key green target as it prepares to defy climate experts by growing its liquified natural gas business and holding its oil production steady until 2030.
The company signalled that it may slow the pace of its emissions reductions for this decade by setting a new plan to reduce the carbon emissions intensity of the energy it sells by 15-20% by the end of the decade, compared with its previous target of 20%.
The weakened target, which was set out in its latest energy transition strategy, will enable Shell to slow the pace of its emissions reductions in a decade that climatologists have warned is crucial in averting a climate catastrophe.
Agathe Masson of the campaign group Reclaim Finance said the “retrograde step” showed once again that Shell had “no interest in acting for the climate”.
Climate experts have called on all fossil fuel companies to reduce the emissions from the energy they sell, known as “scope 3 emissions”, by cutting their production of oil and gas. Shell’s targets refer to the carbon intensity of their products, rather than the absolute emissions. This means it could produce more gas at a lower emissions intensity but still raise its total emissions overall as it ramps up production.
The strategy update includes a new target to reduce the scope 3 emissions from its oil business by between 15-20% by 2030, compared with 2021 levels. It has not set a scope 3 emissions target for its gas business, which is expected to grow by 50% by 2040.
The weaker climate targets were set out alongside Shell’s annual report, which shows its chief executive, Wael Sawan, will take home a pay packet worth almost $10m (£7.94m). His predecessor Ben van Beurden was paid £9.7m in 2022.
Jonathan Noronha-Gant, a senior fossil fuels campaigner at the NGO Global Witness, said: “Shell’s CEO £8m pay packet is a bitter pill to swallow for the millions of workers living with the high costs of energy. Our reliance on Shell’s dirty oil and gas make them rich whilst the rest of us get poorer.”
Last month, Shell revealed an annual profit of more than $28bn for 2023, one of its most profitable years on record, as green activists staged a protest outside the company’s London headquarters.
Sawan angered green groups last June, when the company appeared to reverse a plan to reduce Shell’s oil and gas production by 1-2% a year, in pursuit of higher profits.
Shell hpromised in 2021 it would reduce its oil output every year for the rest of the decade, from a 2019 peak of 1.9m barrels a day. It claimed it had in fact achieved this target in 2021 after the $9.5bn sale of its stake in a large project in the Permian basin in the US. The sale has helped to reduce its oil production to 1.5m barrels a day. Shell said that was the equivalent of 200,000 barrels of oil and gas production last year.
The company plans to start enough fossil fuel projects to add 500,000 barrels a day to its oil and gas production by 2025.
The decision to continue investing in fossil fuels goes against advice from climate experts who have said there can be no new oil or gas developments if the world hopes to avoid a climate crisis.
The new oil and gas projects would enable Shell to “continue providing the energy security that the world needs while delivering cashflow longevity into the future”, according to Sawan.
