Energy transition overview
Fiscal policy will continue to play a critical role in the energy transition and taxes are one of the tools that governments can use to incentivise investment in low-carbon fuels and encourage their use.
Governments use taxes to raise revenues and drive the behaviour of both business and consumers. This may result in governments being faced with competing priorities.
On the one hand, they may wish to use tax incentives to reduce greenhouse gas emissions by encouraging investment in renewable energy and new technologies. On the other hand, they may also need to guarantee energy security and secure revenues for public spending.
As the energy transition gathers momentum, new business models and changes in tax policy may give rise to uncertainty for taxpayers and governments. Governments may also need to implement tax policies that can help them manage potentially lower revenues from fossil fuels.
Shell supports stable fiscal regimes which attract investment and which can support countries in developing sustainable budgets.
Environmental taxes are fiscal instruments that are used to drive behaviour change, such as reducing a business’s carbon footprint or waste. These are often indirect taxes that do not form part of a company’s corporate income tax charge. Read more in the UK environmental taxes section.
Shell only makes use of incentives that encourage investment in low-carbon and renewable energy when they are aligned with our business and operational objectives.
