* Shell sets ambition for net zero emissions by 2050
* Includes its customers' behaviour getting greener
* Sets 3%-4% emissions reduction target by 2022
* FACTBOX-Big Oil's varied climate targets
* GRAPHICS on Big Oil's climate targets
(Adds Shell CEO comments from conference call, graphic, analyst
and Greenpeace comment)
By Ron Bousso and Shadia Nasralla
LONDON, April 16 (Reuters) - Royal Dutch Shell on
Thursday laid out the oil and gas sector's most extensive
strategy yet to reduce greenhouse gas emissions to net zero by
2050, stating its plans depended on its customers also
mitigating emissions.
Oil and gas producers have announced deep spending cuts as
oil prices have touched 18-year lows and drastic
restrictions on movement to slow the spread of the new
coronavirus have destroyed demand.
Chief Executive Ben van Beurden told investors the crisis
would not distract it from the company's shift to low-carbon
energy as it braces for "a complete overhaul" over the next 30
years.
The raised ambitions put the Anglo-Dutch company - at least
on paper - ahead of the most progressive of its rivals,
including BP and Italy's Eni.
"We aim to be a net-zero emissions energy business by 2050
or sooner," van Beurden said.
The Anglo-Dutch company previously had long-term intensity
based targets, rather than goals based on absolute emissions
reductions.
It said on Thursday it planned to fully offset carbon
emissions from its own oil and gas production and the energy it
uses by 2050, in what are known as Scope 1 and Scope 2
emissions.
Those emissions do not include the much larger category of
greenhouse gases emitted from fuels and products it sells to
customers, such as jet fuel and gasoline, known as Scope 3.
The company however said it will "pivot towards serving
businesses and sectors that by 2050 are also net-zero
emissions," which it said means its absolute emissions,
including Scope 3, should be fully offset.
SCOPE 3
Energy companies' carbon emission reduction targets vary
greatly in scope and definition.
BP aims to bring net emissions from the barrels from its own
operations throughout their life cycle to zero by 2050,
including a 50% reduction of the carbon intensity of all the
products it sells, which include products from oil made by other
companies.
Shell also expanded its aim to cut the carbon emission
footprint from the energy products its sells, an intensity-based
measure, by around 65% by 2050, and by around 30% by 2035.
To get to overall net-zero emissions, including Scope 3, van
Beurden told a conference call that "our customers can and will
themselves take action on the emissions created by their use of
our energy products."
"As we get closer to 2050, we will work ever more intensely
with customers who still have emissions that they have not fully
mitigated...to find ways to help them do so. That might be
through actions they take themselves or we may agree to mitigate
those emissions on (their) behalf," he added.
Mitigation would rely on offsetting emissions, for example
by planting trees, or carbon capture technology, which is not
currently used at commercial scale.
Last year Shell spent roughly 8% of its $24 billion budget
on low-carbon energy. Barclays analysts said it was likely that
spending on oil and gas exploration would fall.
Shell also set binding targets to reduce its net carbon
footprint in the three years to 2022 by 3% to 4% from a 2016
baseline.
IN LINE WITH PARIS?
Investors welcomed the announcement, but differed on whether
it was in line with the 2015 Paris climate agreement to limit
global warming to well below 2 degrees Celsius by the end of the
century.
"This package of enhanced steps, set against the current
other commitments in the oil and gas sector, significantly jumps
Shell to the leading global position," Carola van Lamoen, head
of Robeco's Active Ownership team, told Reuters.
Mark van Baal, founder of activist group Follow This, said
the new goals were not enough.
"Shell's Board is still failing in its responsibility to
show leadership at a time of devastating climate change," he
said.
Shell also recommended investors vote against a climate
resolution filed by Follow This ahead of its annual general
meeting in May calling for more aggressive climate steps.
"A credible Net Zero plan from Shell would start with a
commitment to stop drilling for new oil and gas," said
Richard George, head of Greenpeace UK’s climate campaign.
FACTBOX-Big Oil's varied climate targets
GRAPHICS on Big Oil's climate targets
(Reporting by Ron Bousso; Editing by Susan Fenton, John
Stonestreet, Mike Harrison and Barbara Lewis)
BP (BP.)
