Shell publishes Energy Transition Strategy 2024 - CORRECTION
*Shell publishes Energy Transition Strategy 2024- CORRECTION*
The following sentence in the “More value with less emissions: our actions” – “Carbon capture and storage (CCS)” section is being re-presented due to an editorial error: “We are exploring the possibility of increasing CCS capacity at Scotford, initially by 750,000 tonnes a year.” The earlier announcement published at 07:10 on March 14, 2024 incorrectly stated: “We are exploring the possibility of increasing CCS capacity at Quest, initially by 750,000 tonnes a year.”
All other details remain unchanged. The full updated announcement is set out below.
The above change has been reflected in the Energy Transition Strategy 2024 (ETS24) which is available on the Shell website and has been marked with a footnote in the ETS24 itself. An updated version of the ETS24 has also been filed with the NSM.
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· Shell will continue its drive to halve emissions from its operations (Scope 1 and 2) by 2030, compared with 2016 on a net basis. By the end of 2023, Shell had achieved more than 60% of this target. Shell also reduced the net carbon intensity of the energy products it sells by 6.3% compared with 2016, the third consecutive year it hit its target.
· To help drive the decarbonisation of the transport sector, Shell has set a new ambition to reduce customer emissions from the use of its oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11) [A].
· Shell confirms it will invest $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, making Shell a significant investor in the energy transition.
London, 14 March 2024 – Shell plc (Shell) has published its first energy transition update since the launch of its Powering Progress strategy in 2021. At our Capital Markets Day in June 2023, we outlined how our strategy delivers more value with less emissions, emphasising the “more value” part. In this energy transition update, we are focusing on how the same strategy delivers “less emissions”.
Our target to achieve net-zero emissions by 2050 across all our operations and energy products is transforming our business. We believe this target supports the more ambitious goal of the Paris Agreement to limit global warming to 1.5°C above pre-industrial levels. Shell’s strategy supports a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.
“Energy has made an incredible contribution to human development, allowing many people around the world to live more prosperous lives. Today, the world must meet growing demand for energy while tackling the urgent challenge of climate change. I am encouraged by the rapid progress in the energy transition in recent years in many countries and technologies, which reinforces my deep conviction in the direction of our strategy,” said Wael Sawan, Shell’s Chief Executive Officer.
“Shell has a very important role to play in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future. Our focus on performance, discipline and simplification is driving clear choices about where we can have the greatest impact through the energy transition and create the most value for our investors and customers. We believe this focus makes it more, not less, likely that we will achieve our climate targets. By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition,” said Sawan.
Our energy transition plans cover all our businesses. Liquefied natural gas (LNG) is a critical fuel in the energy transition, and we are growing our world-leading LNG business with lower carbon intensity. We are cutting emissions from oil and gas production while keeping oil production stable, and growing sales of low-carbon energy solutions while gradually reducing sales of oil products such as petrol, diesel and jet fuel. As one of the world’s largest energy traders, we can connect the supply of low-carbon energy to demand, as we have done for many years with oil and gas.
We have made good progress against our climate targets:
· By the end of 2023, we had achieved more than 60% of our target to halve emissions from our operations by 2030, compared with 2016. This goes above and beyond the targets set by signatories to the Oil and Gas Decarbonization Charter agreed at COP28.
· We continue to be an industry leader in reducing methane emissions. We were one of the first companies to set a target to achieve near-zero methane emissions by 2030. In 2023, we achieved 0.05% methane emissions intensity – significantly below our target of 0.2%. And in 2023 we also contributed to the World Bank’s Global Flaring and Methane Reduction Fund – further supporting industry-wide action to drive down methane emissions and flaring.
· In 2023, we achieved our target to reduce the net carbon intensity of the energy products we sell, with a 6.3% reduction compared with 2016 – the third consecutive year we hit our target.
As Shell transforms into a net-zero emissions energy business, we aim to take the lead in the energy transition where we have competitive strengths, see strong customer demand, and identify clear regulatory support from governments. To help drive the decarbonisation of the transport sector, we have set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11).[A]
Our focus on where we can add the most value has led to a strategic shift in our integrated power business. We plan to build our power business, including renewable power, in places including Australia, Europe, India and the USA, and have withdrawn from the supply of energy directly to homes in Europe.
In line with this shift to prioritising value over volume in power, we will focus on select markets and segments. This includes selling more power to commercial customers, and less to retail customers. Given this focus on value, we expect lower total growth of power sales to 2030, which has led to an update to our net carbon intensity target. We are now targeting a 15-20% reduction by 2030 in the net carbon intensity of the energy products we sell, compared with 2016, against our previous target of 20%.
We will continue to transparently report our progress against our targets and ambitions every year.
*Driving towards a net-zero future *
We are investing $10-15 billion between 2023 and the end of 2025 in low-carbon energy solutions, making us a significant investor in the energy transition. And in 2023, we invested $5.6 billion on low-carbon solutions, more than 23% of our total capital spending.
These investments include electric vehicle charging, biofuels, renewable power, hydrogen and carbon capture and storage. Our investments in new technologies are helping to reduce emissions for Shell and our customers. We aim to help scale new technologies to make them an affordable choice for our customers and are focusing our advocacy on key areas which we believe are critical to the energy transition: policies that support national net-zero ambitions including carbon pricing, supplying the secure energy the world needs, driving changes in demand and growing low-carbon solutions.
[A] Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO2e) in 2023 and 569 million tonnes CO2e in 2021.
ENDS
Notes to Editors
· For full details of updates to our climate targets, ambitions and performance please read the full report, online here: www.shell.com/ets2024pdf
· Shareholders will have an advisory vote on the Energy Transition Strategy at Shell’s 2024 AGM.
· Shell’s net carbon intensity is the average intensity, weighted by sales volume, of the energy products sold by Shell. It is tracked, measured and reported using our Net Carbon Footprint (NCF) methodology.
· We have set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11). That is more than 40% compared with 2016 reported emissions. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO2e) in 2023, 569 million tonnes CO2e in 2021 and 819 million tonnes CO2e in 2016. Of the 40% reduction by 2030, around 8 percentage points are related to volumes associated with additional contracts being classified as held for trading purposes, impacting reported volumes from 2020 onwards.
· Reducing the net carbon intensity of the products we sell requires action by both Shell (Scope 1 and 2 emissions) and our customers (Scope 3 emissions). While we can encourage the uptake of low-carbon products and solutions, we cannot control the final choices customers make. Support from governments and policymakers is essential to create the right conditions for changes in demand. In 2023, we invested $5.6 billion in low-carbon energy solutions, more than 23% of our total capital spending. This includes the acquisition of Nature Energy, which makes Shell one of the largest producers of renewable natural gas in Europe. And our ongoing investment in Sprng Energy, one of India’s leading renewable power platforms, demonstrates our determination to invest in growing renewable capacity in areas that play to our strengths and add most value. We are also pioneering efforts to scale up low-carbon solutions, such as by starting construction in late 2022 of Holland Hydrogen 1 in Rotterdam, which is anticipated to become one of the largest renewable hydrogen plants in Europe.
· Find out more about Shell’s 2023 Capital Markets Day online: www.shell.com/ets2024pdf
*Enquiries*
UK / International Media Relations: +44 20 7934 5550
*Shell plc – Energy Transition Strategy *
*Chair's message*
This energy transition update marks an important moment for Shell. It comes three years after we launched our Powering Progress strategy, and builds on our Capital Markets Day in June 2023 when we set out our plans to create more value with less emissions.
Our target to become a net-zero emissions energy business by 2050 remains at the heart of our strategy and is transforming our operations and energy products. We believe this target supports the more ambitious goal of the Paris Agreement, to limit the rise in the global average temperature to 1.5°C above pre-industrial levels.
As we work towards net zero, we are reducing emissions from our operations and energy products while becoming an increasingly successful organisation. Our energy transition plans cover all our businesses: Integrated Gas, Upstream and Downstream, Renewables and Energy Solutions. In this publication, we set out pathways to net zero for our two biggest customer sectors – transport and industry – based on where we believe we have the competitive advantages to provide our customers with the products they need through the transition.
*Helping reduce emissions for our customers*
We want to lead in the decarbonisation of transport using the strength of our brand, deep customer relationships and global reach. We aim to grow our public charging network for electric vehicles, and remain one of the world’s largest blenders and distributors of biofuels [A]. As the energy transition progresses, we expect to sell more low-carbon products and solutions, and less oil products including petrol and diesel.
To measure our progress, we have set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11) [B].
1. Includes volumes from our joint venture Raízen
2. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO[2]e) in 2023 and 569 million tonnes CO[2]e in 2021.
The world needs a balanced and orderly transition away from fossil fuels to maintain secure energy supplies, while accelerating the transition to affordable low-carbon solutions. We are growing our world-leading liquefied natural gas (LNG) business so that we can continue to provide a critical fuel in the energy transition. Our investments in carbon capture and storage, hydrogen and renewable energy will help us produce LNG with lower carbon intensity in the future.
Through our world-class trading business, we can connect the supply of low-carbon energy to demand, as we have done for many years with oil, gas and LNG.
As we work towards net zero, we are making clear choices about where we can add most value for our investors and customers. We expect renewable power will be critical for helping our commercial customers decarbonise, and plan to build our integrated power business in places including Australia, Europe, India and the USA. We have withdrawn from the supply of energy directly to homes in Europe because we do not believe we have a competitive position there.
*Technologies of the future*
We are increasing our investments in research and development, and investing in the fuels of the future. We aim to scale up new technologies to create affordable options for our customers into the 2030s. We are building Holland Hydrogen 1, one of the largest renewable hydrogen plants in Europe, close to our Energy and Chemicals Park Rotterdam in the Netherlands. We are also investing in carbon capture and storage technology to reduce emissions from our own operations such as refineries and LNG plants, and, in the longer term, to help our industrial customers reduce their emissions too.
I saw first-hand the potential of some of the exciting new technologies we are developing when I visited Oman in January 2024. We are part of a group exploring a project to produce green ammonia and liquefied synthetic gas from renewable hydrogen. These technologies are still in the early stages, but they could help to decarbonise industry and commercial road transport in the future.
*More value with less emissions*
At our Capital Markets Day, we said we would deliver more value with less emissions. We have made good progress in our first year under our new Chief Executive Officer Wael Sawan. In 2023, we returned 42% of our cash flow from operations to our shareholders, the upper end of our 30-40% range through the cycle. We also reduced carbon emissions from our operations by 31% compared with 2016 levels, putting us well on the way towards our target of a 50% reduction by 2030 on a net basis. We achieved our short-term target to reduce the net carbon intensity of the energy products we sell, with a 6.3% reduction against our target of 6-8% compared with 2016.
*Transparency and shareholder support*
In 2021, 89% of our shareholders voted in support of our Energy Transition Strategy. Since then, we have published two progress reports, which our shareholders have also supported. Along with other Board members, I met with many of Shell's largest institutional shareholders following those votes. I appreciate their time and feedback and look forward to our next engagement in April 2024.
The publication of our Energy Transition Strategy brings increased transparency, and better dialogue with our institutional investors. We heard that following Capital Markets Day, for example, some wanted us to be clearer about how we will deliver both more value and less emissions, and we are showing exactly that in this update.
This year, we are again asking our shareholders to vote at our Annual General Meeting on our Energy Transition Strategy. As before, this vote is purely advisory, and not binding for our shareholders. The legal responsibility for approving or objecting to Shell's strategy lies with the Board and Executive Committee.
We believe our strategy will transform Shell into a net-zero emissions energy business, creating value for our shareholders, customers and wider society. We will offer shareholders an advisory vote at the 2024 Annual General Meeting based on the energy transition plans described in this publication and our Annual Report and Accounts 2023. The Board recommends that shareholders vote in favour of the Resolution asking them to support those plans.
*Sir Andrew Mackenzie *
Chair
*Chief Executive Officer's introduction*
This is our first update to the Energy Transition Strategy that we published in 2021. It is an opportunity to take stock of our progress, to reflect on what we have learned, and to look forward as we transform Shell into a net-zero emissions energy business by 2050.
Over the past three years we have seen the critical importance of secure and affordable energy for economies and people's lives. As the world's population grows by an estimated 2 billion people by 2050, and the benefits of energy are extended to the hundreds of millions who do not have it today, demand for energy will only grow.
At the same time, the world must achieve an orderly transition away from fossil fuels to low-carbon energy to achieve net-zero emissions. Today, fossil fuels meet around 80% of global energy demand, with an even greater reliance in many developing countries. We support a balanced energy transition, one that maintains secure and affordable energy supplies as the world moves to net zero.
I am encouraged by the rapid progress in the energy transition in many countries and technologies in recent years, including the continued growth in demand for liquefied natural gas (LNG), a critical fuel in the energy transition, and for low-carbon energy solutions such as solar and wind power, and electric vehicles. This progress reinforces my deep conviction in the direction of our strategy.
Shell has an important role to play in providing the energy the world needs today, and in helping to build the low-carbon energy system of the future. There are exciting opportunities to use the strength of our innovation capabilities in the areas where we can have the greatest impact. Our purpose – to provide more and cleaner energy solutions – sets the direction for everything we do.
*Progress towards our targets*
Since we launched our Powering Progress strategy, we have made good progress against our climate targets, and learned where we have competitive strengths. By the end of 2023, we had achieved more than 60% of our target to halve emissions from our operations by 2030, compared with 2016. We achieved this by adapting our portfolio, including by repurposing refineries, and making changes to our operations such as powering some oil and gas platforms with renewable energy.
We continue to be one of the leaders in reducing emissions of methane, a potent greenhouse gas that can be released during oil, gas and LNG production. We were one of the first companies to set a target to achieve near-zero methane emissions by 2030. In 2023, we continued to keep our methane emissions intensity well below 0.2%. We made good progress towards our target to eliminate routine flaring from our upstream operations, compared with 2016 [A]. We also met our short-term target to reduce the net carbon intensity of the energy products we sell, with a 6.3% reduction against our target of 6-8% compared with 2016.
*More value, less emissions*
At our Capital Markets Day in June 2023, we outlined how our Powering Progress strategy delivers more value with less emissions, emphasising the "more value" part of our strategy. In this energy transition update, we are focusing on how the same strategy delivers "less emissions".
Our energy transition plans cover all our businesses. In Integrated Gas, we are growing our world-leading LNG business with lower carbon intensity. In Upstream, we are reducing emissions from oil and gas production. In Downstream and Renewables and Energy Solutions, we are growing sales of low-carbon products and solutions such as biofuels, electric vehicle charging and renewable power, while investing in hydrogen and other fuels of the future.
Our focus on performance, discipline and simplification is driving clear choices about where we can create the most value for our investors and customers through the energy transition. Our ability to raise and invest capital depends on delivering strong returns to shareholders, shaping the role that Shell can play on the journey to net zero. We believe this focus makes it more, not less, likely that we will achieve our climate targets and ambitions.
*Reducing emissions from production*
We believe the world will continue to need oil and gas for many years -- produced with much lower emissions -- alongside cleaner energy such as advanced biofuels, renewable power and hydrogen.
We expect LNG will play a critical role in the transition. It continues to provide a secure supply of energy in many European countries. It also offers flexibility to electricity grids as wind and solar power grow, and opportunities to lower carbon emissions from industries such as cement and steel by replacing coal.
In the future, by powering our LNG plants with renewable electricity, and adding carbon capture and storage, we aim to lower the carbon intensity of our LNG plants. Our LNG joint venture in Canada (Shell interest 40%), for example, the largest private-sector investment in the country's history, will use natural gas and renewable electricity to reduce emissions from the plant by more than one-third compared with the world’s best performing facilities.
The Vito platform in the Gulf of Mexico (Shell interest 63.1%) is reducing emissions from oil and gas production. The platform started production in 2023 and is expected to produce around 80% less carbon dioxide emissions over its
operating life, compared with the original design. We are using the same concept for two more platforms in the Gulf of Mexico, Whale (Shell interest 60%) and Sparta (Shell interest 51%).
*Supporting our customers as they decarbonise*
We aim to lead in the energy transition where we have competitive strengths, see strong customer demand, and identify clear regulatory support from governments. The transport sector is a good example.
We are building on our customer relationships and expertise to help drive the decarbonisation of passenger cars, heavy-duty trucks, planes and ships. We aim to grow our public charging network for electric vehicles, and stay a leader in biofuels including sustainable aviation fuels or renewable diesel made from waste. By repurposing our remaining integrated refineries to focus on four regional energy and chemicals parks, we are creating the low-carbon production hubs of the future.
As we grow sales of low-carbon fuels we expect to reduce sales of oil products such as petrol and diesel. We have set a new ambition to measure our progress, to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11) [B]. Our ambition is in line with the European Union's climate goals for transport, which are among the most progressive in the world.
Our focus on value has led to a strategic shift in our power business towards select markets and segments. One example is selling more power to commercial customers, including renewable power, and less to retail customers. As a result, we expect lower growth in sales of power overall. We have updated our net carbon intensity target to reflect that change, with a 15-20% reduction by 2030, compared with 2016, against 20% previously.
*Towards net zero*
In total, we invested $5.6 billion in low-carbon solutions in 2023, which was 23% of our capital spending. We are spending $10-15 billion on low-carbon solutions between 2023 and 2025, making us a significant investor in the energy transition. With our focused approach, we believe our investments will have an important impact, allowing us to develop low-carbon solutions at increasingly affordable prices for our customers.
Shell will provide the different kinds of energy the world needs. We will invest in producing LNG with lower carbon intensity, in reducing emissions from oil and gas production, and in providing cleaner energy solutions. As we transform Shell into a net-zero emissions energy business, we believe we are the investment case and the partner of choice through the energy transition.
*Wael Sawan*
Chief Executive Officer
1. Subject to the completion of the sale of Shell Petroleum Development Company of Nigeria Limited (SPDC
2. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO[2]e) in 2023 and 569 million tonnes CO[2]e in 2021.
*Our Energy Transition Strategy 2024*
*Our key beliefs have informed our strategy, enabled our progress, and will allow us to deliver on our updated targets and ambitions.*
1 Today, the world must meet growing demand for energy while tackling the urgent challenge of climate change. There needs to be a balanced and orderly transition away from fossil fuels to low-carbon energy solutions to maintain secure and affordable energy supplies.
2 Our target to achieve net-zero emissions by 2050 across all our operations and energy products is transforming our business. We believe this target supports the more ambitious goal of the Paris Agreement, to limit the rise in the global average temperature to 1.5°C above pre-industrial levels.
3 At our Capital Markets Day in June 2023, we outlined how our Powering Progress strategy delivers more value with less emissions, emphasising the "more value" part of our strategy. In our Energy Transition Strategy 2024, we are focusing on how the same strategy delivers "less emissions".
4 By the end of 2023, we had achieved more than 60% of our target to halve Scope 1 and 2 emissions from our operations by 2030, compared with 2016, and reduced our total methane emissions by 70%.
5 We believe liquefied natural gas (LNG) will play a critical role in the energy transition, replacing coal in heavy industry. It also has a continued role in displacing coal in power generation, helping to reduce local air pollution and carbon emissions. LNG helps to provide the flexibility the power system needs, at a time when renewable generation is growing rapidly.
6 Investment in oil and gas will be needed because demand for oil and gas is expected to drop at a slower rate than the natural decline rate of the world’s oil and gas fields, which is 4-5% a year.
7 We expect rapid growth in electric vehicles, including electric trucks, and believe biofuels and natural gas will also play a role in reducing emissions from heavy-duty transport. To help drive the decarbonisation of transport, we have set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11).That is more than 40% compared with 2016 reported emissions. [A]
1. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO[2]e) in 2023, 569 million tonnes CO[2]e in 2021 and 819 million tonnes CO[2]e in 2016. Of the 40% reduction by 2030, around 8 percentage points are related to volumes associated with additional contracts being classified as held for trading purposes, impacting reported volumes from 2020 onwards.
8 We believe carbon abatement technologies such as carbon capture and storage will be needed for the world to reach net-zero emissions. We believe once key regulations, technologies and standards are in place, a large-scale business for carbon credits will emerge.
9 Our focus on performance, discipline and simplification is driving clear choices about where we can create the most value for our investors and customers. We believe renewable energy will be an essential part of a net-zero world. In line with our strategic shift to prioritise value over volume in power, we are concentrating on select markets and segments. As a result, we expect lower growth of power sales overall. We are now targeting a 15-20% reduction in the net carbon intensity of the energy products we sell by 2030, compared with 2016, against 20% previously.
10 We are investing $10-15 billion in low-carbon energy solutions between 2023 and the end of 2025, making us a significant investor in the energy transition. By providing the different kinds of energy the world needs, we believe we are the investment case and the partner of choice through the energy transition.
*Our journey towards net zero*
*2023*
· Invested $5.6 billion in low-carbon solutions, of our total capital spending of $24.4 billion in 2023. This included the acquisition of Nature Energy, one of the largest producers of renewable natural gas in Europe.
· Our Timi platform in Malaysia, mainly powered by solar and wind energy, started production. The Vito platform in the US Gulf of Mexico also started production, with 80% less CO[2] emissions expected over its lifetime compared with the original design.
· The Hollandse Kust Noord wind park off the coast of the Netherlands became operational.
· Shell’s management team hosted its first Capital Markets Day in New York and set out Shell’s strategy to deliver more value with less emissions.
· Achieved our target to reduce the net carbon intensity of the energy products we sell by 6-8% by the end of 2023 compared with 2016.
· Reduced our operational emissions (Scope 1 and 2) by 31% by the end of 2023 compared with 2016, more than halfway towards our target to reduce them by 50% by 2030 on a net basis.
· Won majority shareholder support (80% of votes) for our energy transition progress at our Annual General Meeting.
*2022*
· Completed the acquisition of renewable power company Sprng Energy, and took a final investment decision on Holland Hydrogen 1 and LNG expansion projects in Qatar.
· Introduced three new metrics in the annual bonus scorecard to reflect Shell’s role in the energy transition.
· Simplified our share structure, allowing us to manage our portfolio with greater agility through the energy transition.
*2021*
· Completed the divestment of our Permian assets in the USA and bought solar company Savion in the USA.
· Offered shareholders an advisory vote on our energy transition strategy. The strategy was overwhelmingly supported.
· Introduced target to become a net-zero emissions energy business by 2050, and a target to halve Scope 1 and 2 under our operational control by 2030 on a net basis (2016 reference year).
*2020*
· Announced ambition to become a net-zero emissions energy business by 2050.
· Extended the energy transition performance metric to around 16,500 employees through the Performance Share Plan (PSP).
*2019*
Published our first Industry Associations Climate Review, which reviewed alignment between Shell’s climate-related policy positions and 19 key industry associations.
*2018*
Signed a joint statement with Climate Action 100+ investor group announcing steps taken by Shell demonstrated alignment with the goals of the Paris Agreement.
*2017*
Announced ambition to reduce the carbon intensity of the energy products we sell by around half by 2050 (Scope 1, 2 and 3).
*Our updated targets and ambitions*
Net-zero emissions by 2050 (Scopes 1, 2 and 3)
Emissions from our own operations (Scope 1 and 2)
*Target*
Halving Scope 1 and 2 emissions by 2030 [A] under operational control (2016 reference year)
*Target*
Eliminating routine flaring from Upstream operations by 2025 [B]
*Target*
Maintain methane emissions intensity below 0.2% and achieve near-zero methane emissions by 2030
Emissions from the products we sell (Scope 3)
*Target*
Updated
Net carbon intensity (NCI) Introducing a range of 15-20% for our target to reduce NCI by 2030 (2016 reference year)
*Ambition*
New
Oil products ambition Reduce customer emissions from the use of our oil products by 15-20% by 2030, Scope 3 Category 11 [C] (2021 reference year)
1. On a net basis.
2. Subject to completion of the sale of SPDC.
3. Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO[2]e) in 2023 and 569 million tonnes CO[2]e in 2021.
*Carbon performance at a glance*
*Reducing Scope 1 and 2 emissions under our operational control*
*Scope 1 and 2 operational emissions [A]*
Million tonnes CO2e
2016 [B]
2021
2022
2023
2030
2050
83
68
58
57
41
50% target reduction by 2030
2023: More than 60% of our 2030 target
*Methane emissions intensity [A] [E]*
%
2016
2021
2022
2023
Assets with marketed gas [F]
0.1
0.06
0.05
0.05
Assets without marketed gas [g]
0.03
0.01
0.01
0.001
Total routine flaring [A] [H]
*Million tonnes of hydrocarbons flared*
2016
2021
2022
2023
1.1
0.2
0.1
0.1
*Reducing emissions associated with our customers’ use of energy products*
*Net carbon intensity (NCI) [C]*
g CO2e/MJ [C]
2016 [B]
2021
2022
2023
2024
2025
2030
2050
79
-2.5%
-3.8%
-6.3%
-9-12%
-9-13%
-15-20%
-100%
2021, 2022, 2023: NCI target achieved for third year in a row [D]
*Customer emissions from the use of our oil products (Scope 3, Category 11) [I]*
million tonnes CO2e
2021 [B]
2023
2030
569
-9%
-15-20%
We believe our total absolute emissions peaked in 2018 at 1.73 gigatonnes of carbon dioxide equivalent (GtCO[2]e).
1. Operational control boundary. Scope 1 and 2 target is on a net basis.
2. Reference year.
3. Shell's NCI is the average intensity, weighted by sales volume, of the energy products sold by Shell. Estimated total greenhouse gas (GHG) emissions included in NCI correspond to well-to-wheel emissions associated with energy products sold by Shell, on an equity boundary, net of carbon credits. This includes the well-to-tank emissions associated with the manufacturing of energy products by others that are sold by Shell. Emissions associated with the manufacturing and use of non-energy products are excluded.
4. 2021 target 2-3%, 2022 target 3-4%, 2023 target 6-8%, all achieved. Acknowledging uncertainty in the pace of change in the energy transition, we have also chosen to retire our 2035 target of a 45% reduction in net carbon intensity.
5. Our target is to maintain methane emissions intensity below 0.2% and achieve near-zero methane emissions by 2030.
6. Methane emissions intensity from all oil and gas assets for which Shell is the operator that market their gas (including LNG and GTL assets), defined as the total volume of methane emissions in normal cubic meter (Nm3) per total volume of gas available for sale in Nm3.
7. Methane emissions intensity from all oil and gas assets for which Shell is the operator that do not market their gas (e.g. where gas is reinjected) defined as the total mass of methane emissions in tonnes per total mass of oil and condensate available for sale in tonnes.
8. Our target is to eliminate routine gas flaring from upstream operations by 2025, subject to the completion of the sale of SPDC.
9. We have set a new ambition to reduce absolute emissions related to the use of our oil products by 15-20% by 2030, compared with 2021 (Scope 3 Category 11). Customer emissions from the use of our oil products (Scope 3, Category 11) were 517 million tonnes carbon dioxide equivalent (CO[2]e) in 2023 and 569 million tonnes CO[2]e in 2021.
*The energy system: our beliefs*
*Today, fossil fuels meet around 80% of the world's primary energy use. There is even greater reliance in many developing countries where security of supply and stable prices are critical to their development.*
The world's primary energy demand is just over 300 million barrels of oil equivalent per day (mboe/d); with around 250 mboe/d from fossil fuels. Of this, 100 mboe/d is from oil, 80 mboe/d is from coal and 70 mboe/d is from gas.
As demand for energy continues to grow, driven by rising populations and increased prosperity, the world must transition from fossil fuels to low-carbon energy in a balanced way to achieve net-zero emissions. The transition to net zero will not be linear, as different countries take different approaches and move at different paces.
Public policy, developments in technology and infrastructure, and a functioning carbon market are essential to create the demand signals for the private sector to invest at scale. This will require collaboration between policymakers, customers and private organisations like Shell that have the financial strength, experience and capabilities to help build the new energy system.
Developing our beliefs
We have developed our beliefs through our engagements with customers, policymakers, scientists and thought leaders from around the world. We have used research from our technology programmes, along with work carried out by the International Energy Agency, the Intergovernmental Panel on Climate Change and several other external bodies.
We have also drawn from the expertise in our own energy security scenarios, Sky 2050 and Archipelagos, which we published last year. Although our scenarios are not expressions of our strategy and are not our business plans, they help inform our beliefs.
Our scenarios are quantified by our World Energy Models, which are supplemented with climate analysis done in conjunction with Massachusetts Institute of Technology. We will continue to challenge our own beliefs as technology, policy and customer preferences evolve.
*Increasing demand*
Since 2000, annual air mileage has tripled, passenger road mileage has doubled, and production of steel has more than doubled. We expect continued growth in the transport and industrial sectors, driven by rising populations and higher living standards in emerging and developing countries, where more than a quarter of the world's population still lack basic energy provisions.
Oil demand has grown from 57 million barrels a day (mb/d) to almost 100 mb/d in the last 40 years, with occasional annual declines in recessions, and the notable decline caused by the Covid pandemic. In all cases, demand has rebounded. However, we believe growth in oil demand is set to slow in the second half of this decade, and could start falling in the 2030s because of increasing vehicle efficiency and growth in electric vehicles.
*Population, GDP, demand and consumption of energy 2000-2040*
2000-2040
Population
x1.5
GDP
x3.4
Aviation (passenger km)
x5.3
Passenger road (vehicle km)
x3.1
Marine (tonne km)
x2.2
Heavy industry (tonne steel equivalent)
x2.6
Source: Shell analysis and IEA's Extended energy balances 2023).
Demand for natural gas has also seen steady growth over the last 40 years, adding an average of about 60 billion cubic metres (bcm) of new demand a year. Demand for liquefied natural gas (LNG) has grown much faster, from about 30 million tonnes per annum (mtpa) in 1983 to more than 400 mtpa in 2023.
Today, LNG makes up around 13% of the global gas market, a figure expected to exceed 20% by 2040. The global LNG market will continue growing at least through the 2030s, mostly driven by industrial decarbonisation in China, and strengthening demand in other Asian countries. LNG can help displace the use of coal in industry and power generation, and can top up supply in regions of declining domestic gas production such as Europe.
The prospects for LNG demand are increasingly independent of pipeline natural gas because the fuel can be transported at short notice, and can also be used as a substitute for higher-carbon liquid fuels in shipping.
Global demand for coal rose by 3.6% from 2013 to the end of 2023, when it reached a new high. This increase was fuelled by strong demand in developing economies. Coal demand increased by 35% in India and by 13% in China during this
10-year period, due to rising demand for electricity and weak hydropower output. We believe replacing coal with natural gas, LNG and renewable power will be a key factor in reducing emissions.
*Primary energy demand by region and energy source, 2023 (exajoule)*
Middle East
China
Other Asia Pacific
Americas
India
Rest of World
Europe
Oil
43%
19%
34%
37%
23%
30%
34%
Natural Gas
55%
8%
20%
32%
5%
32%
22%
Coal
1%
58%
25%
8%
45%
14%
11%
Nuclear & electric renewables [A]
1%
11%
11%
15%
5%
7%
20%
Bioenergy [B]
0%
4%
10%
8%
21%
17%
12%
[A] Electric renewables are dominated hydroelectricity, wind, and solar. Some of these sources are also used to generate heat instead of electricity.
[B] Electric renewables include hydroelectricity, solar and wind.
Source: Shell analysis of IEA Extended Energy Balances (2023).
*Energy investment*
Significant investment will be required to keep supplying oil and gas while low-carbon alternatives are developed and made commercially available.
This continued investment is needed because demand for oil and gas is expected to drop at a slower rate than the natural decline of the world's oil and gas fields, which is at 4% to 5% a year.
Worldwide oil and gas production, outside North America, has been at around 120 mboe/d from 2013 until the end of 2023, despite cumulative oil and gas investment of more than $2 trillion over the same period.
Current global investment in low- and zero-carbon energy is around $1.7 trillion a year. To reach net zero by 2050, scenarios suggest that $3-4 trillion of commercially viable investment in low-carbon energy is required each year.
*Final energy demand by sector and energy carrier, 2023 (exajoule)*
Marine
Non-energy use
Aviation
commercial road
Passenger road
Heavy industry
Light industry [C]
Buildings
Liquids (fossil) [A]
99%
52%
97%
91%
3%
18%
4%
Solids (fossil) [A]
0%
7%
0%
0%
0%
29%
9%
3%
Gaseous (fossil) [A]
0%
40%
0%
3%
4%
30%
21%
29%
Electricity
0%
0%
0%
0%
1%
26%
38%
34%
Heat
0%
0%
0%
0%
0%
6%
3%
6%
Bioenergy [B]
1%
1%
3%
4%
4%
5%
10%
24%
[A] Gaseous is mostly natural gas; Solids is mostly coal; Liquids is mostly oil. However, crossovers exist, such as LPG (gaseous oil product) and CTL (liquified coal).
[B] Bioenergy includes traditional and modern uses of biomass, biofuels and biogas.
[C] Includes rail, less than 5% of this category.
Source: Shell analysis and IEA’s Extended energy balances (2023).
*Global greenhouse gas emissions in 2023*
Carbon dioxide (CO[2]) emissions from the energy system amounted to almost three-quarters of global greenhouse gas emissions in 2023. Tighter government policies will help to reduce carbon emissions at a rate consistent with the temperature goals of the Paris Agreement. Even without these policies, we expect that the global demand for fossil fuels would fall from today's level of around 80% to below 70% by 2040. If the world follows a path to net-zero emissions by 2050, the figure could go down to 50%. This will be driven by electrification and the scaling-up of renewable energy generation.
*Estimated net global greenhouse gas emissions, 2023*
%
Heavy industry [A]
20
Light industry [B]
14
Passenger road transport
7
Freight road transport
4
Aviation
2
Marine
1
Buildings [C]
17
Other greenhouse gases [D]
28
Land-use change [E]
7
[A] Includes emissions from industrial processes, 18% of total.
[B] Includes rail, 3.5% of total.
[C] Emissions for operation of buildings - not construction (which is in industry sectors).
[D] 70% methane, from agriculture and fossil production and use; 23% nitrous oxide; 7% others.
[E] land use, land-use change emissions and forestry (LULUCF).
Source: Shell analysis and IEA’s Extended energy balances (2023).
*Industry*
Industry makes up 44% of the world's final energy use, with oil, gas and coal meeting almost 64% of this demand.
Today, industry also uses substantial amounts of power generated by fossil fuels. The sector includes heavy industry, light industries such as manufacturing, mining and agriculture, and non-energy use feedstocks in chemicals.
*Heavy industry*
Heavy industry includes the energy-intensive production of steel and cement, which use high-temperature processes that can be hard and expensive to electrify. This sector represents 17% of final energy use, mainly in the form of coal, gas and electricity.
Higher standards of living are built on the output of heavy industry. For example, the in-use stock per capita of steel in OECD countries ranges from 10-15 tonnes per person (t/p) compared with a world average of around 4 t/p [A].
Since 2000, OECD countries have seen a modest decline in energy demand as industrial output has plateaued. In
non-OECD countries, demand has nearly tripled, driven by industrialisation. Much of this increase in demand comes from China, which currently produces around half the world's steel and cement.
The use of coal in heavy industry has fuelled much of the industrial growth in non-OECD countries over the last two decades, while OECD countries use far less coal and proportionally more gas and power. In non-OECD countries, gas and electricity have increased their market share against coal, and we expect this trend to continue.
We believe natural gas and LNG will play an important role in replacing coal in high-temperature heavy industry applications. They can help address both local air emissions and wider climate considerations.
More plentiful and affordable renewable electricity will also play a role in decarbonising this sector. Once electrification has taken place, gas will have a back-up role because many industrial processes require a high reliability of power supply. We also see potential for hydrogen in the long-term when it becomes cost competitive.
*Light industry*
Light industry constitutes around 17% of final energy use. Its energy requirements vary from fuel for heavy equipment to medium-level heat and electricity for manufacturing facilities.
The energy mix for light industry includes coal, oil, gas, electricity and some commercial biomass. Many areas of light industry have already switched to electrification. We see this trend continuing with more action needed to increase efficiency. Supportive government policies are also needed to decarbonise the sector.
*Non-energy use*
Non-energy use is dominated by petroleum feedstocks and natural gas, and some coal in Asia. It represents about 10%
of final energy use, but there are limited emissions as the feedstocks are transformed into material goods such as lubricants, plastics and fertilisers. Many of these products indirectly help reduce emissions when used in insulation in buildings or in plastics which reduce the weight of vehicles. We believe bio-feedstocks and recycling will grow in importance in this sector.
1. Source: International Energy Agency. Iron and Steel Technology Roadmap reserved.
*Energy consumption in heavy industry (Exajoule/year)*
OECD
Non-OECD
2000
2023
2000
2023
Solid (fossil)
13.12
11.96
38.04
32.34
Electricity from coal [A], [B]
11.24
6
10.09
17.85
Electricity from other [A]
12.62
16.54
7.99
10.44
Electricity from natural gas [A]
5.23
9.4
8.8
7.48
Gaseous (fossil)
38.45
40.5
21.83
26.31
Other [C]
19.35
15.61
13.25
5.59
[A] Includes heat.
[B] Consists of nuclear, renewables and oil.
[C] Includes liquid fossil fuels and bioenergy.
Source: Shell analysis of IEA's Extended Energy Balances (2023).
*Transport sector*
The transport sector represents nearly 30% of final energy use, with oil products meeting more than 90% of this demand.
The remainder is mostly met by LNG, compressed natural gas and biofuels. Global CO[2] emissions from transport amount to around 8 gigatonnes (GT) a year, which is about one-seventh of global emissions.
Oil products dominate transport because of their high energy density, convenience and cost competitiveness. In some markets, such as Europe and the USA, alternative transport fuels like ethanol are mandated. In Europe, where road transport fuel taxes are high, electric vehicles are increasingly cost competitive. However, in marine and aviation alternatives remain expensive. Bio-alternatives are at least twice the cost of oil products, and synthetic fuels manufactured from hydrogen can be up to eight times more expensive.
Relative cost of transportation fuels, 2023
USD/boe
Low
Blank
Tax
Delta
Aviation
E-Kerosene
610
244
Biojet fuel [B]
214
92
Jet Fuel [B]
107
31
Marine
E-ammonia
366
183
Bio-LNG [B]
183
153
Bunker fuel [B]
61
49
Commercial road transport [A]
Biodiesel [B]
130
212
122
Electricity [C]
166
166
Diesel [B]
111
110
54
Passenger road transport [A]
Electricity [C]
195
195
Gasoline [B]
101
238
54
[A] Noth-west European retail prices.
[B] Beyond production costs, taxes significantly increase the price customers pay for biodiesel, diesel and gasoline.
[C] Electric costs (0.2-0.6$kWh) adjusted for 2.4x higher efficiency of electric versus international combustion engine vehicles. Range shown is home/deport charging to highway fast charging.
Source: Shell Scenario team interpretations of 2023 market data when Brent crude oil prices averaged $83/barrel
*Passenger road transport*
Today, there are around 1.3 billion cars on the road, consuming around 25 million barrels of oil per day (mb/d), which is a quarter of the world's oil production. Biofuels such as ethanol are used in some markets but currently amount to less than 5% of demand. We expect a rapid growth in electric vehicles, including plug-in hybrids. Today there are around 40 million such vehicles on the roads, with up to 275 million expected by 2030. The availability of charging points will be critical for the growth in electric vehicles.
The share of electric cars in new car sales has increased from less than 3% in 2018 to 18% in 2023. The most rapid growth is in China, the world's largest car market, followed by Europe and the USA. In China, there are a wide range of vehicles for sale at under $40,000, while in other markets electric vehicles generally sell at above this price before government subsidies are applied.
*Commercial road transport*
Commercial road transport, which includes 70 million trucks, uses 16 mb/d. We believe the shift of commercial road transport towards low-carbon solutions is less than a decade behind that of passenger cars. We expect that biofuels and renewable natural gas will keep playing a role in reducing emissions from trucks. In the long term, we expect electricity or hydrogen to become the main paths to decarbonisation, depending on advances in technology, government policy and customer preferences.
*Aviation*
Demand for aviation fuel has rebounded from its Covid lows and is now at about 7 mb/d. Sustainable aviation fuel (SAF) made from used cooking oils and other feedstocks is seen as a credible alternative to jet fuel. Today, SAF represents less than 0.1% of total demand, but we expect its market share to grow with support from governments.
Around 11 markets have SAF targets, including Europe and Singapore. Some 25 airlines representing a combined 35% of global aviation emissions also have SAF targets. Government mandates are essential to increase demand for SAF because it costs consumers between two and four times more than conventional aviation fuel. There is limited evidence that passengers will voluntarily pay a premium to cover the extra cost. In the long term, advances in technology may create opportunities to use synthetic fuels such as e-kerosene, but further research and development is required.
*Shipping*
Shipping represents about 6 mb/d of oil demand. About 5% of shipping gross tonnage in operation today is fuelled by LNG, which can reduce emissions by up to 23% compared with conventional fuels. Of the new ships on order, about 25% of gross tonnage is being designed for LNG. A significant number of the ships in operation today already have dual fuel capabilities, giving them the flexibility to run on alternatives. We believe demand for LNG in shipping will grow, including for liquefied biomethane. Fuels such as methanol and ammonia could be options for shipping in the long term, but we see challenges with both of them.
*Buildings*
Residential and commercial buildings represent just under 30% of final energy use. This energy is used to heat the buildings and power electrical devices, and around two-thirds of it comes from low-carbon sources. The global building stock has become about 75% more efficient in the last 40 years due to improved building standards, better insulation, and more efficient appliances. Electrification has helped to decarbonise this sector and we see this continuing, with an increased use of electric heat pumps and cookers, reducing demand for natural gas in homes. Supportive policies will be key to continuing this trend.
Information technology services, including data centres, artificial intelligence and cryptocurrencies, are a rapidly growing part of the building sector. We believe global electricity demand in this area could double from 2023 to 2026.
*Power*
Power is the most rapidly decarbonising part of the energy system. More than 40% of electricity is now generated from renewables and nuclear. There has been rapid growth in wind and solar generation in the last 10 years, expanding from 3.5% of total power generation in 2013 to nearly 18% in 2023.
Around 22% of final energy use was electrified by the end of 2023, up from around 18% in 2010. We think this trend is accelerating, aided by the adoption of electric vehicles and heat pumps. Electrification of final energy use could reach 30-40% by 2040.
We expect that wind and solar will continue to dominate power generation growth as governments rightly support their scale-up, which will also require significant expansion of national electricity grids.
We see natural gas having a continued role in displacing coal in power generation, which helps reduce local air pollution and carbon emissions. Natural gas also helps provide the flexibility the power system needs, at a time when renewables are growing rapidly, and its role is especially crucial in managing seasonal fluctuations in supply and demand.
*Carbon abatement*
We believe carbon abatement will be an important tool to reach net-zero emissions. Once key regulations and standards are in place, a large-scale business for carbon credits could emerge.
Carbon credits may be used to compensate for emissions in line with the mitigation hierarchy of avoid, reduce and compensate.
The cost of carbon abatement can be split into three tranches. Abatement for less than $100 a tonne of CO[2] includes efficiency measures in industry and buildings, changes in agriculture, forestry and other land use practices, and some switching from coal to gas or renewables in power generation.
The middle tranche of abatement costs between $100 a tonne and $200 a tonne and includes the use of carbon capture and storage (CCS) in power generation and industry. The highest abatement costs are at more than $200 a tonne. These include parts of the transport and industry sectors, and directly capturing carbon from the atmosphere.
Carbon removals are likely to become an important way to limit the long-term temperature rise. Both of Shell's energy security scenarios envisage the need for multi-billion tonne a year carbon removals, which will need to be financed by emitters purchasing carbon credits.
Demand for carbon credits in the voluntary carbon market is expected to grow significantly. CCS also has the potential to make a meaningful reduction in CO[2] emissions. While there are only around 50 million tonnes per annum (mpta) of CCS in operation today, there are around 300 mtpa of projects under consideration [A]. Many net-zero scenarios show the industry growing to more than 1,000 mtpa by the mid-2030s.
1. Global CCS Institute, 2023. The Global Status of CCS: 2023. Australia
*Shell's strategy to 2030*
*Our strategy transforms Shell into a net-zero emissions business by 2050 by delivering more value with less emissions. It supports our purpose*
*– to provide more and cleaner energy solutions*
Our beliefs inform our strategy. While the energy transition will move at different paces in different countries, we expect global growth in demand for oil will slow this decade, and is likely to start declining in the following decade. We also expect global demand for LNG will continue to grow at least through the 2030s.
We believe the world needs a balanced energy transition, one that maintains secure energy supplies, while accelerating the transition to affordable low-carbon solutions.
Our strategy supports a balanced transition by providing the oil and gas people need today, while helping to build the energy system of the future. As we implement our strategy, we are becoming a multi-energy business offering our customers more and cleaner energy solutions.
We are reducing emissions from our operations, and helping our customers move to cost-competitive and cleaner energy. Our energy transition plans cover all our businesses:
· Integrated Gas - Growing our world-leading LNG business with lower carbon intensity.
· Upstream - Cutting emissions from oil and gas production while keeping oil production stable.
· Downstream, Renewables and Energy Solutions – Transforming our businesses to offer more low-carbon solutions while reducing sales of oil products.
*Delivering more value less emissions*
*CFFO*
*NZE*
Grow leading LNG position
~70%
Leading Integrated Gas
~25%
Achieve near-zero methane emissions
Keep oil production flat ensuring cash flow longevity
Advantaged Upstream
Eliminate routine flaring
High-grade portfolio
~30%
Differentiated Downstream, Renewables and Energy Solutions
~75%
Decarbonise our operations
Apply value over volume
Reduce oil product sales
Pursue selective growth
Grow low-carbon offerings
Help customers decarbonise
Decarbonise our operations
Trading and optimisation capabilities
[A] Net absolute emissions cover the Scope 1, 2 and 3 emissions from our energy products; these are calculated by product and allocated to businesses based on final point of sales, so emissions associated with upstream production are largely included under downstream as point of sale.
Today, around 70% of our cash flow comes from our Integrated Gas and Upstream businesses, with the remaining 30% generated by our Downstream, Renewables and Energy Solutions businesses.
The opposite is true for emissions. Around 75% of Shell's recorded emissions come from our Downstream, Renewables and Energy Solutions businesses, with the vast majority generated when our customers use our products. The remaining emissions are generated within Integrated Gas and Upstream, with a large proportion also coming from when our customers use our products. Across all our businesses, more than 90% of our emissions are reported as Scope 3.
Shell will reduce emissions over time as our product mix evolves to meet changing customer demand. We will continue to produce LNG and oil with less emissions, while the mix of our sales will move more towards low-carbon solutions such as biofuels, renewable energy and hydrogen, and away from oil products such as petrol, diesel and jet fuel into the 2030s.
*Estimated share of energy sales 2016-2030 [A]*
2016
2023
2030
Oil products [B]
57%
48%
39%
LNG
14%
22%
26%
Pipeline gas
25%
21%
21%
Electricity
3%
7%
11%
Biofuels
1%
2%
3%
[A] Share of energy products sold, aggregated on energy basis (lower heating value) in final energy equivalents.
[B] Oil products includes gas-to-liquids (GTL).
*Leading Integrated Gas*
*Growing our world-leading LNG business with lower carbon intensity*
We plan to grow our LNG business by 20-30% by 2030 compared with 2022. We are developing new projects with lower carbon intensity by using renewable power and carbon abatement technology in the form of carbon capture and storage. Beyond our own production, we will continue to add scale and flexibility to our portfolio by buying LNG from others.
Our LNG business will remain a key priority for Shell, meeting continued strong demand especially in Asia where we send most of our shipments today. As we grow our LNG business we will be targeting opportunities which have an internal rate of return of 11% or higher.
*Market outlook of LNG demand by region*
Million tonnes per annum
2022
2040
China
64
127
Japan, South Korea and Taiwan
139
113
South East Asia
19
116
South Asia
31
123
Europe
121
119
Rest of work
11
39
Middle East and North Arica
7
14
391
651
Source: Shell internal analysis
*LNG in the energy transition*
LNG provides both energy security and flexibility because it can be easily transported to places where it is needed most. It continued to play a vital role in providing energy security in Europe in 2023.
LNG is also a critical fuel in the energy transition. It is the lowest-carbon fossil fuel, producing around 50% less carbon emissions than coal when used to generate electricity, according to the International Energy Agency.
Compared with coal, LNG emits far lower amounts of sulphur dioxide, nitrogen oxide and other compounds that contribute to local air pollution.
*Air pollution from gas-fired power plants versus coal-fired power plants*
coal emissions
natural gas emissions
Sulphur dioxide
0.67
0.01
nitrogen dioxide
0.7
0.02
particulate matt