Scope 1, Scope 2, and Scope 3 greenhouse gas (GHG) emissions, and the related risks
Shell’s target is to be a net-zero emissions energy business by 2050, in step with society. This means we must therefore report our performance against our operational Scope 1 and 2, and Scope 3 emissions. Scope 1, 2 and 3 emissions are among the metrics we use to mitigate climate risks and seize opportunities in the energy transition, as described in the section “Climate-related metrics and targets”.
Shell’s absolute emissions in 2021
In 2021, our total combined Scope 1 and 2 absolute GHG emissions (from assets and activities under our operational control) were 68 million tonnes on a CO2 equivalent basis, a 4% reduction compared with 2020, and an 18% reduction compared with 2016, the base year. Our Scope 3 emissions from energy products included in our net carbon intensity were 1,299 million tonnes CO2e.
|
Absolute emissions [D], [F] million tonnes of CO2e |
Targets [E] |
||||||||||||||||
|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|---|
Scope |
2016 |
2019 |
2020 |
2021 |
Target 2030 |
Target 2050 |
||||||||||||
Scope 1 [A] |
72 |
70 |
63 |
60 |
50% reduction compared with 2016 levels on a net basis |
0 |
||||||||||||
Scope 2 [B] |
11 |
10 |
8 |
8 |
0 |
|||||||||||||
Scope 3 [C] |
1,545 |
1,551 |
1,305 |
1,299 |
No target |
0 |
||||||||||||
|
||||||||||||||||||
The Scope 3 emissions from the energy products we sell account for the majority of our total emissions. When we calculate our emissions, we include emissions not only from the products that we produce ourselves but also from the oil and gas that others produce and resell as products to our customers. Altogether, we sell more than three times more oil and gas products than the oil and gas we extract ourselves. Therefore, to account for Shell’s full effect, we have to include everything we sell in the measurement of our carbon emissions as shown in the charts in the section “Climate-related metrics and targets”.
Scopes 1 & 2 – performance [A]
Share of energy delivered per energy product type [A]-[F]
[B] Total volume of energy products sold by Shell, aggregated on an energy basis, with electricity represented as fossil equivalents. This value is derived from energy product sales figures disclosed by Shell in the Annual Report, Form 20-F and the Sustainability Report.
[C] Lower heating values are used for the energy content of the different products and a fossil-equivalence approach is used to account for electrical energy, so that it is assessed on the same basis as our other energy products.
[D] The NCI calculation uses Shell’s energy product sales volume data, as disclosed in the Annual Report and Sustainability Report. This excludes certain contracts held for trading purposes and reported net rather than gross. Business specific methodologies to net volumes have been applied in oil products and pipeline gas and power. Paper trades that do not result in physical product delivery are excluded. Retail sales volumes from markets where Shell operates under trademark licensing agreements are also excluded from the scope of Shell´s carbon intensity metric.
[E] In 2021, emissions included in carbon intensity of power have been calculated using the market-based method.
[F] The carbon intensity of biofuels provided in the graph “Share of energy delivered per energy product type” reflects the global average for biofuels sold by Shell for 2021.
We undertake external verification of our GHG emissions annually. Our Scope 1 and 2 GHG emissions from assets and activities under our operational control and Scope 3 emissions included in our NCI have been verified to a level of limited assurance.
Drivers of absolute Scope 1 and 2 emissions change in 2021
Scope 1 and Scope 2 GHG emissions changes from 2020 to 2021
million tonnes carbon dioxide equivalent (CO2e)
[B] We have restated our 2020 emissions from 9 to 8 million tonnes CO2e following a correction of an efficiency factor for steam at one of our assets and a revision to how internal energy transfers of steam and electricity were accounted for at several of our assets to remove double-counting between Scopes 1 and 2.
[C] In addition to reductions from GHG abatement and energy efficiency projects, this category also includes reductions from permanent shutdown of Convent and Tabangao refineries and the impact of transformational activities at our Shell Energy and Chemicals Park in Singapore.
[D] Excludes 1.05 million tonnes of CO2 captured and sequestered by our Quest CCS project in Canada in 2021.
Our direct GHG emissions (Scope 1) (consolidated using the operational control boundary) decreased from 63 million tonnes of carbon dioxide equivalent (CO2e) in 2020 to 60 million tonnes CO2e in 2021, driven by several factors including:
- the shutdown of the Convent refinery, USA, in late 2020;
- downtime at the Norco site, USA, due to impacts from Hurricane Ida;
- divestments in 2020 and 2021 (e.g. the Martinez and Puget Sound refineries in the USA, and the Fredericia refinery in Denmark);
- sustained emissions reductions (performance against our scorecard and additional reductions as discussed below (page 94); and
- reductions in methane emissions.
These decreases were partly offset by higher emissions due to the restart of the Prelude FLNG facility in Australia and increased flaring in facilities operated by Shell Nigeria Exploration and Production Company Limited (SNEPCo) in Nigeria.
Total routine hydrocarbons flaring reduced from 0.3 to 0.2 million tonnes of hydrocarbon flared from 2020 to 2021.
Around 60% of flaring in our Upstream and Integrated Gas facilities in 2021 occurred in assets operated by the Shell Petroleum Development Company of Nigeria Limited (SPDC) and SNEPCo. We will continue to work in close collaboration with joint-venture partners and the Federal Government of Nigeria to make progress towards the objective of ending the continuous flaring of associated gas.
Our target to keep methane emissions intensity below 0.2% was met in 2021 with Shell’s overall methane emissions intensity at 0.06% for facilities with marketing gas and 0.01% for facilities without marketing gas. We believe our methane emissions are calculated using the best methods currently available. This target covers all Shell-operated oil and gas assets in our Upstream and Integrated Gas businesses. Methane emissions include those from unintentional leaks, venting and incomplete combustion, for example in flares and turbines.
Our indirect GHG emissions associated with imported energy (Scope 2) (consolidated using the operational control boundary) were 8 million tonnes CO2e in 2021, (using the market-based method), the same as in 2020.
Drivers of absolute Scope 3 emissions change in 2021
Emissions associated with the use of our energy products, Scope 3 emissions, account for the vast majority of our carbon emissions related to energy products. Our total Scope 3 emissions from energy products are largely unchanged from last year. The decrease in 2020 from 2019 mainly relates to a decrease in demand for oil products given market conditions in 2020, and a decrease related to volumes associated with additional contracts being classified as held for trading purposes with effect from January 2020.
Our strategy is based on working with our customers, sector-by-sector, to address the emissions from the use of our products and to help them find ways to reduce their emissions and overall carbon footprint to net zero by 2050.
