Having announced the target to become a net zero carbon emitting company by 2050 in 2020, global oil giant Royal Dutch Shell has now provided a strategy update elaborating how it plans to get there. These measures, as CEO Ben van Beurden explained, will drive down carbon emissions and enable it to build a competitive portfolio to transition towards achieving the overarching goal by 2050.
Yet, oil gets to grab the largest share of its planned investments as it plans to turn into a net zero carbon emitter.
The measures are outlined in its strategy document called Powering Progress showing its future focus on the 3 business pillars of growth, transition and upstream with planned investments to come in as the following:
Growth: Of the total $5 billion to $6 billion to be invested annually, $3 billion will go for marketing, $2 billion to $3 billion for renewables and energy solutions. For renewables, Shell will aim to sell some 560 TWh hours of integrated power annually by 2030, twice as much electricity as it sells today. It aims to provide clean power-as-a-service to more than 15 million retail and business customers globally. "We will make our investments go further by partnering with others with the emphasis for Shell being on managing clean electrons," it added. Hydrogen is also part of its strategy going forward as it plans to develop integrated hydrogen hubs and achieve double-digit share of global clean hydrogen sales.
Transition: Investment of $8 billion to $9 billion will be distributed as $4 billion for integrated gas, $4 billion to $5 billion in chemicals and products.
Upstream: With $8 billion, oil will grab the lion's share, though the company promised it will aim for gradual reduction in oil production of around 1% to 2% annually, including disinvestments and natural decline. This segment will continue to provide material cash flow into the 2030s.
While Shell continues to invest in oil and gas in the future, it has been making advances in the renewables space, especially solar & battery storage of late. In February 2019, Shell took a 100% stake of German battery storage company sonnen (see Shell Takes Over 100% Of Sonnen). It also holds stake in a Singapore based solar power company Sunseap (see Shell Invests In Singapore PV Firm). Earlier this year, Shell Energy Europe said it will purchase 570 GWh solar power annually for 10 years from 300 MW Spanish solar power capacity of Solaria Energia as part of the company's drive to sell clean energy for its end consumers (see Shell Contracts 300 MW Solar Power In Spain).