Energy transition strategy
Powering Progress is our strategy to become a net-zero emissions energy business, purposefully and profitably. Powering Progress aims to deliver value for our shareholders, for our customers and for wider society. For more information, see section “Our strategy”.
Our strategy aims to support the more ambitious goal of the Paris Agreement
Tackling climate change is an urgent challenge. It requires a fundamental transformation of the global economy and the energy system so that society stops adding to the total amount of greenhouse gases in the atmosphere, achieving what is known as net-zero emissions. That is why Shell has set a target to become a net-zero emissions energy business by 2050.
To help us get there, we have set short-, medium- and long-term targets to reduce our carbon intensity, measured using our net carbon intensity metric. For more information see "Setting targets for NCI".
There is no established standard for aligning an energy supplier’s decarbonisation targets with the temperature limit goal of the Paris Agreement. In the absence of a broadly accepted standard, Shell has developed its own approach to demonstrate Paris alignment by setting carbon intensity targets within a pathway derived from scenarios from the IPCC Special Report on Global Warming of 1.5°C (SR 1.5), most of which show the global energy system reaching net zero between 2040 and 2060.
This pathway is aligned with the more ambitious temperature goal of the Paris Agreement to limit global mean temperature rise to 1.5°C above pre-industrial levels by 2100. We believe our targets are aligned with the IPCC SR1.5 pathway.
When constructing the pathway, we filtered out certain outlying IPCC scenarios to ensure that Shell’s targets are aligned with earlier action, and low-overshoot scenarios. Overshoot refers to the extent to which a scenario exceeds an emissions budget and subsequently relies on carbon sinks to compensate for the excess emissions.
Becoming a net-zero emissions energy business means reducing emissions from our operations, and from the fuels and other energy products, such as electricity, that we sell to our customers. It also means capturing and storing any remaining emissions using technology, protecting natural carbon sinks, and providing high quality carbon credits to our customers to compensate for hard-to-abate emissions.
An increasing number of countries and companies have announced targets to achieve net-zero emissions by the middle of the century, and we are starting to see some changes in the demand and supply of energy. However, achieving the 1.5 degrees Celsius goal will be challenging and requires unprecedented global collaboration. The pace of change will also vary around the world.