By Christian Moess Laursen
Shell plans to slow the pace of its carbon-emission cuts on energy products sold, as Chief Executive Wael Sawan focuses on last year's pledge to prioritize value.
The Anglo-Dutch energy heavyweight said Thursday that it now targets a 15%-20% reduction by 2030 in the net carbon intensity of the energy products it sell, compared with the 2016 base.
In its last energy-transition strategy report--published in 2021 when Ben van Beurden was CEO--the company, in a historic shift, vowed to reduce its net carbon intensity 20% by 2030, 45% by 2035 and to reach net zero in 2050. Net carbon intensity measures emissions from each unit of energy Shell sells to customers.
The target for 2023 of a 6%-8% reduction was reached, with 6.3%, Shell said.
The rollback on the carbon-emission cuts reduction is a result of a narrowing of its markets and segments for the integrated power business, which include selling more power to commercial customers and less to retail.
"Our focus on where we can add the most value has led to a strategic shift in our integrated power business," the London-based company said.
Given this focus, Shell said it expects lower total growth of power sales to 2030.
The revised net-carbon intensity target follows a similar decision from peer BP, which last year said it would slow its shift to lower-carbon energy and increase spending on oil-and-gas production.
"At the end of the day, we're responding to what society wants," then-CEO Bernard Looney said February last year.
By pivoting from previous pledges of higher renewable-energy spending, and focusing more on shareholder returns, the two London-listed companies seek to close the valuation gap with their cross-Atlantic peers, Chevron and ExxonMobil, which have been more firmly committed to fossil fuels.
Since taking over the company at the start of last year, Shell CEO Wael Sawan has made clear that he wants to address that discrepancy.
The London-based company said it will continue to halve its absolute emissions from operations by 2030, having already achieved more than 60% of this target in 2023.
It also set a new target to reduce customer emissions from the use of its oil products by 15%-20% by 2030 compared with 2021, and confirmed it will invest $10 billion-$15 billion between 2023 and the end of 2025 in low-carbon energy solutions.
Write to Christian Moess Laursen at christian.moess@wsj.com
(END) Dow Jones Newswires
03-14-24 0411ET
