Scope 1, Scope 2 and Scope 3 GHG emissions and related risks

In assessing progress against our target to be a net-zero emissions energy business by 2050, we 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.

Shell’s absolute emissions in 2022

In 2022, our total combined Scope 1 and 2 absolute GHG emissions (from assets and activities under our operational control) were 58 million tonnes on a CO₂ equivalent basis, a 15% reduction compared with 2021, and a 30% reduction compared with 2016, the base year. Our Scope 3 emissions from energy products included in our net carbon intensity were 1,174 million tonnes CO₂e.

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Absolute emissions [D], [F] million tonnes of CO₂e

Targets [E]

Scope

2016

2020

2021

2022

Target 2030

Target 2050

Scope 1 [A]

50% reduction compared with 2016 levels on a net basis

Scope 2 [B]

Scope 3 [C]

1,545

1,305

1,299

1,174

No target

[A]	Total direct (Scope 1) GHG emissions from assets and activities under our operational control. It includes emissions from production of energy and non-energy products.
[B]	Total indirect GHG emissions from imported energy (Scope 2) from assets and activities under our operational control using the market-based method. It includes imported energy used for production of energy and non-energy products.
[C]	Indirect GHG emissions (Scope 3) based on the energy product sales included in NCI using equity boundary. The NCI calculation uses Shell’s energy product sales volumes 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 net carbon intensity metric.
[D]	Emissions are reported gross without the inclusion of carbon credits.
[E]	Our 2030 and 2050 targets are on a net basis (i.e. including carbon credits). Acquisitions and divestments have been included in the actual performance tracking with the target unchanged. Note that acquisitions and divestments could have a material impact on meeting the targets.
[F]	Oil and gas industry guidelines from IPIECA indicate that several sources of uncertainty can contribute to the overall uncertainty of a corporate emissions inventory. We have estimated the overall uncertainty for our direct GHG emissions (Scope 1) to be around 3% and for our energy indirect GHG emissions (Scope 2) to be around 7% for the marketbased method and 6% for the location-based method for 2022. IPIECA also notes that due to the diversity of Scope 3 emissions, sources and the fact that these emissions occur outside the company’s boundaries, the emissions estimates may be less accurate or may have high uncertainty.

Our Scope 3 emissions reported above can be categorised as follows, using the definitions from the GHG Protocol's Corporate Value Chain (Scope 3) Standard

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GHG emissions, million tonnes CO₂e	2022	2021
Scope 3, category 1: purchased goods and services	144	147
Scope 3, category 3: fuel and energy-related activities	115	136
Scope 3, category 9: downstream transport and distribution	5	6
Scope 3, category 11: use of sold products	910	1,010
	1,174	1,299

Scope 3 emissions from categories 1, 3 and 11 make up the majority of Shell’s Scope 3 emissions. Shell reports Scope 3 emissions across all 15 categories annually.

For further details see: shell.com/ghg

The Scope 3 emissions from the energy products we sell account for the majority of the total emissions we report. 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 we sell as products to our customers. We sell more energy products than the energy we produce ourselves, therefore, to account for Shell’s full effect, we include energy products sold in the measurement of our carbon emissions as shown in the chart in the section “Climate-related metrics and targets”.

Scope 1 & 2 – performance [A]

million tonnes carbon dioxide equivalent (CO₂e)

[A] Total direct (Scope 1) and energy indirect (Scope 2) GHG emissions from assets and activities under operational control boundary. It includes emissions from production of energy and non-energy products. For Scope 2, we used the market-based method.
[B] Other covers Renewables and Energy Solutions, Marketing, P&T and Real Estate.

Share of energy delivered per energy product type [A]-[F]

[A] Percentage of delivered energy may not add up to 100% because of rounding.
[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 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 volumes 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] Emissions included in the 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 2022.

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 emissions associated with the use of our energy products (Scope 3) included in our NCI have been verified to a level of limited assurance by LRQA Group Limited.

Drivers of absolute Scope 1 and 2 emissions change

Scope 1 and Scope 2 GHG emissions changes from 2016 to 2021 and from 2021 to 2022

million tonnes carbon dioxide equivalent (CO₂e)

[A] Total Scope 1 and Scope 2 emissions, rounded to the closest million tonnes. Scope 2 emissions were calculated using the market-based method.
[B] 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.
[C] Excludes 5.80 million tonnes of CO₂ captured and sequestered by the Shell-operated Quest CCS facility in Canada in 2016-2021. Scope 1 and 2 GHG emissions from operating Quest are included in our total emissions.
[D] Excludes 0.97 million tonnes of CO₂ captured and sequestered by the Shell-operated Quest CCS facility in Canada in 2022. Scope 1 and 2 GHG emissions from operating Quest are included in our total emissions.
[E] Of the 2,010 thousand tonnes of reduction activities and purchased renewable electricity in 2022, 80 thousand tonnes related to purchased renewable electricity.
[F] Change in output relates to changes in production levels, including those resulting from shutdowns and turnarounds as well as production from new facilities.

Our direct GHG emissions (Scope 1) (consolidated using the operational control boundary) decreased from 60 million tonnes of carbon dioxide equivalent (CO₂e) in 2021 to 51 million tonnes CO₂e in 2022, driven by several factors including:

divestments in 2021 and 2022 (e.g. the Deer Park and Puget Sound refineries in the USA) and the handover of operations in OML 11 in Nigeria in 2022;
shutdowns or conversion of existing assets, including the shutdown of some units at the Shell Energy and Chemicals Park Singapore;
GHG abatement projects (see examples in the list of energy efficiency projects) and purchase of renewable electricity.

These decreases were partly offset by the commissioning of Shell Polymers Monaca.

Total routine hydrocarbons flaring reduced from 0.2 to 0.1 million tonnes of hydrocarbon flared from 2021 to 2022.

Around 50% of flaring in our Upstream and Integrated Gas facilities in 2022 occurred in assets operated by the Shell Petroleum Development Company of Nigeria Limited (SPDC) and Shell Nigeria Exploration and Production Company (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 2022 with Shell’s overall methane emissions intensity at 0.05% 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) decreased from 8 million tonnes CO₂e in 2021 to 7 million tonnes CO₂e in 2022 (using the market-based method), in part, due to divestments.

Drivers of absolute Scope 3 emissions change in 2022

Emissions associated with the use of energy products sold by Shell account for the majority of our reported carbon emissions. The reported Scope 3 emissions within the NCI boundary have reduced from 2021. The decrease is largely due to a reduction in oil product and gas sales, and a decrease in the intensity of power sold.

There was a decrease in 2020 from 2019 related to volumes associated with additional contracts being classified as held for trading purposes with effect from January 2020. We estimate that netting of oil products sales volumes resulted in a reduction in GHG emissions of 102 million tonnes CO₂e.

Our strategy is based on working with our customers to address the emissions from the use of our products and to help them find ways to reduce their emissions to net zero by 2050.