Investing in net zero
We are significantly increasing our expenditure on low- and zero-carbon energy, helping both Shell and its customers to meet their climate targets.
In 2025, we expect around 50% of our total expenditure (cash capital expenditure and operating expenditure) to be on low- and zero-carbon products and services across all our businesses. Most of that 50% is on low- and zero-carbon energy products and services such as biofuels and hydrogen, power, nature-based solutions, carbon capture and storage and convenience retail, including charging for electric vehicles. The remainder is on our chemicals and lubricants businesses, which do not produce energy products and do not create carbon emissions when used by our customers.
When measuring total expenditure, we focus on both cash capital expenditure and operating expenditure so that we can capture the total costs associated with accelerating the transition by working with our customers and in coalitions, key parts of our strategy.
Capital expenditure also relates to spending on acquiring and maintaining assets and equipment. It does not reflect the fact that some of our Marketing and Renewables and Energy Solutions businesses are less capital intensive compared with our Upstream activities, and have higher operating costs.
We believe that the only true way to measure our progress in the energy transition is not just to look at changing spending patterns, but also to look at our progress against our net carbon intensity targets. In the short term, by the end of 2024, we are aiming for a reduction in our net carbon intensity of 9-12% compared with 2016, which is a significant step up on our 2-3% target for 2021. We have achieved this target with a 2.5% reduction compared with our 2016 base year.