Achieving a sustainable energy future will require fossil fuels, money to infuse a transformation, and collaboration between individuals, companies and governments, Royal Dutch Shell PLC's top executive said.
Speaking at a conference in London on Oct. 8, CEO Ben van Beurden said that although the world will need oil and natural gas for the foreseeable future, investment on a vast scale must be made to transform and thrive in the energy transition.
Shell is making "sustainable investment in a sustainable future," van Beurden said, but achieving this will take collaboration that goes far beyond Shell or the energy industry as a whole.
"Climate change is the biggest challenge facing the energy industry, but the energy industry is not the biggest challenge for a world trying to tackle climate change. That task is far bigger than any one industry, any single country, or even continent," the CEO of the second-largest listed energy company said.
According to an Oct. 8 report by the Intergovernmental Panel on Climate Change, the world will need to quickly slash carbon dioxide emissions and drastically scale-up low-carbon infrastructure investments over the next decade to limit and mitigate the impacts of climate change,
"The pressure on oil and gas companies is growing at a pace I would have never anticipated," Total SA CEO Patrick Pouyanne said during the conference. "If we don't want to become dinosaurs, we'll have to adapt ourselves."
The energy industry can begin by offering lower-carbon biofuels, more renewable electricity, and products such as hydrogen. The industry can also address operational emissions, including methane leaks, van Beurden said.
Total plans to have 10 GW of power capacity in Europe by 2025, Pouyanne said: 7 GW from renewables and 3 GW from natural gas.
Demand must also be transformed, van Beurden said, and governments will play a key role in steering demand through regulation and consumer signals that include taxes and incentives.
According to report from the Intergovernmental Panel on Climate Change, the transportation sector and residential energy usage for heating would need to switch from fossil fuels to electricity.
Government-led carbon pricing mechanisms can encourage low-carbon choices, and van Beurden urged immediate action on a global emissions trading system as described in the Paris Agreement on climate change.
Businesses must join governments to drive a global industrial transformation on an unprecedented scale, van Beurden said. He urged energy companies and businesses in sectors that use energy to come together to work on how to decarbonize each sector's energy use.
Shell joined the world's largest shipper, A.P. Møller - Mærsk A/S, as well as Citigroup Inc. and the Danish government in September to discuss a way to develop net-zero emissions ships. The coalition plans to work with other governments, shipbuilders and port operators.
If sector-by-sector action does not happen, the world will fail to meet the zero-emissions goal of the Paris Agreement, van Beurden said.
While the industry has the know-how to navigate the energy transition successfully, companies must share knowledge, embrace collaboration, and move with changes or risk forfeiting their place in society, van Beurden said.
"And if a company has no place in society, it has no place being a company at all," the CEO said.
