Shell targets greater emission cuts
Shell has pledged to halve its Scope 1 and 2 absolute emissions over the next decade, the company announced on October 28, responding to heightened scrutiny over the Anglo-Dutch major's carbon footprint.
The company vowed in February to cut the net carbon intensity of its products by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using emissions in 2016 as the baseline. But a Dutch court in May ordered it instead to target a steeper 45% reduction in its Scope 1, 2 and 3 emissions, using emissions in 2019 as a baseline.
The company is appealing against the ruling.
Shell is yet to commit to a target on Scope 3 emissions that are released when customers burn the oil, gas and other fuels it sells. It has also kept 2016 as the baseline for cuts.
The company also reported its third-quarter financial results on October 28, booking $4.13bn in adjusted earnings, up from $955mn a year earlier but down from $5.53bn in the previous quarter. Shell attributed the quarter-on-quarter decline to tax effects, lower output due to Hurricane Ida in the US, and smaller contributions from trading and optimisation. These factors were partly offset by higher prices.
Free cash flow increased to $12.2bn, from $9.67bn in the previous quarter and $7.57bn a year earlier, and Shell also brought down its net debt to $57.5bn from $73.4bn a year before.
Shell is looking to scale back its oil operations and expand in gas, renewables and other low-carbon technologies. As part of this strategy, it agreed in September to sell its US Permian business to ConocoPhillips for $9.5bn in cash. It plans to return $7bn of the proceeds to shareholders.
"This quarter we've generated record cash flow, maintained capital discipline and announced our intention to distribute $7bn to our shareholders from the sale of our Permian assets," Shell CEO Ben van Beurden said. "Today, we also set a new 2030 target to halve the absolute emissions from our operations, compared to 2016 levels on a net basis. Altogether, this is clear evidence of how we are accelerating our Powering Progress strategy, purposefully and profitably."