* Heavy industries and transport need carbon to operate
* Van Beurden urges governments to introduce carbon pricing
By Ron Bousso
LONDON, Oct 6 (Reuters) - Clean renewable energy willstruggle to replace fossil fuels as heavy industries will onlygradually wean themselves off coal, oil and gas, Royal DutchShell Chief Executive Officer Ben van Beurden is set to say onTuesday.
In a speech he will make to the annual Oil and Moneyconference in London, van Beurden will again urge governments toplace a price on carbon emissions in order to reduce coalconsumption in favour of the less polluting natural gas.
"I know that some people would like fossil fuels to bereplaced by renewables as we speak. But for technical andeconomic reasons, this can only happen step by step. And it willnot happen across the board," van Beurden is set to say.
Heavy industry, heavy duty transport and chemicalmanufacturers will continue to require hydrocarbons to operate,he added.
Van Beurden said that an effective carbon pricing systemwould also boost the economic incentives for cleanertechnologies such as carbon capture and storage (CCS).
"In my view, the issue is essentially about finding economicways to invest in an energy transition. This is why governmentsshould take the opportunity to put a price on carbon," he is tosay.
"By taking the costs of tackling climate change and airpollution into account, carbon pricing systems will drive theright behaviour of consumers and producers."
Shell was among six of Europe's largest oil and gascompanies to urge governments around the world to introduce aprice on carbon emissions at the United Nations Paris climateconference in December, where governments will try to agree on away to limit global warming.
Setting a price for each tonne of carbon that emittersproduce is meant to encourage companies to adopt cleanertechnologies and shift away from using fossil fuels, primarilycoal.
The Shell chief executive is also set to outline theAnglo-Dutch firm's plans to live through an extended period oflow oil prices following their halving since June 2014, whichhas damaged oil companies revenues.
Shell has reduced its operating costs by $4 billion oraround 10 percent in the first half of 2015 as costs return tolevels last seen in 2011, he will say.
The company, which is hoping to complete its proposed $70billion bid to buy smaller rival BG Group in early 2016,also expected to cut 2015 capital spending by 20 percent fromlast year to around $30 billion. (Editing by William Hardy)
