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Shell aims to retire 120 million mt of carbon credits by 2030


20 times 2021's retired volume

Electrolysis ramp up by 2024

38 GW renewable pipeline

  • Author
  • Ivy Yin
  • Editor
  • Daniel Lalor
  • Commodity
  • Agriculture Electric Power Energy Transition Oil
  • Topic
  • Energy Transition Environment and Sustainability Hydrogen: Beyond the Hype

Shell plans to retire around 120 million mtCO2e of carbon credits in 2030, some 20 times the volume it retired in coronavirus pandemic-affected 2021.

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Shell's net total emissions fell 16% in five years to 1,375 million mtCO2e in 2021, it said in a report summarizing plans to expand carbon capture and storage, renewables, hydrogen production, electric vehicle charging and sustainable aviation fuel capacity.

Net total emission refers to the company's direct and indirect greenhouse gas emissions based on sales of energy products. Shell has committed to realize 'net-zero' by 2050 in terms of the net total emission.

"This extreme disruption in global energy markets has shown that affordable, secure, and reliable energy cannot be taken as a given ... Essentially, an accelerated transition is the best way to ensure security of energy supplies," Shell chairman Andrew Mackenzie said in the report.

Customer offsets

Of the around 6 million mtCO2e of carbon credits retired in 2021, some 5.1 million related to energy products used by Shell's customers, with the remainder relating to synthetic lubricant production and the company's business travel.

As of 2021, Shell offered carbon credits to fleet customers in 17 countries, and retail customers at over 3,100 service stations in Austria, Canada, Germany, Hungary, the Netherlands, Switzerland and the UK, Shell said.

It invested $26 million in nature-based offsets, such as reforestation and prevention of landscape degradation and destruction, while $11 million was invested in cookstove projects, reducing emissions from households traditionally using open fires for cooking.

S&P Global Commodity Insights assessed nature-based carbon credits (Platts CNC) at $11.30/mtCO2e on April 20. Household device carbon credits were assessed at $9.85/mtCO2e.

Shell had two CCS projects in operation and more than 10 under development. By 2035, another 25 million mt/year of CCS capacity would be added, equivalent to 25 facilities the size of the Quest CCS site in Canada.

Quest, in which Shell holds a 10% stake, has stored over 6.5 million mtCO2e since 2015.

In Australia, meanwhile, the Gorgon CCS project operated by Chevron, in which Shell owns 25%, has stored over 5 million mt of CO2e since 2019.

Green power and hydrogen

As of 2021 Shell had 4.7 GW of renewable capacity in operation, under construction or committed for sale, and 4,300 mt/year of hydrogen production capacity from water electrolysis.

Rapid expansion is expected in both areas, with Shell taking forward some 38 GW of renewable capacity so that by 2030, it would be in a position to sell some 560 TWh/year, over twice current sales.

Current hydrogen production from 30 MW of electrolysis, meanwhile, was equivalent to 10% of global installed capacity, with 20 MW in China and a 10 MW in Germany, the biggest of its kind in Europe. The two electrolyzers can produce 3,000 mt/year and 1,300 mt/year, respectively.

Shell planned to build a 200 MW electrolyzer in the Netherlands producing 20,000 mt/year starting in 2024.

Decarbonizing transportation

In transport, Shell operated almost 90,000 electric vehicle charging points in 2021, up from 60,000 the previous year. It aimed to increase that to more than 500,000 by 2025, and to 2.5 million by 2030, accounting for around 7% of the global total in 2030, based on IEA data.

It said it aimed to build 150 hydrogen refueling stations by 2030, as well as supply around 5,000 Mercedes-Benz heavy-duty trucks with hydrogen by then.

Currently, Shell only offers sustainable aviation fuel produced by external suppliers will start producing SAF from 2024 at the Shell Energy and Chemicals Park in Rotterdam.

Last September, the company said it would install around 2 million mt/year of SAF production capacity by 2025, aiming for at least 10% of its global aviation fuel sales to be for SAF by 2030.