Shell PLC has quietly abandoned its plan to spend $100 million a year on carbon credits, “which is the largest offset program among corporations,” notes CarbonCredits.com. The move comes six months after its new CEO Wael Sawan took office. From the report: In June, Sawan announced a major shift in Shell’s strategy — to maintain its current level of oil production until 2030, not to reduce it as initially declared, while reducing costs and increasing shareholders profits. What the CEO missed to reveal at the time is the energy giant’s plans for investing in carbon credit projects. These credits are part of Shell’s offsetting program in line with its 2050 net zero emissions goal. Shell has made a commitment to cut Scope 1 and 2 emissions by 50% by 2030 and reach net zero by 2050. It managed to reduce total emissions from all scopes (Scope 1, 2, and 3) in 2022 compared to 2016 levels. A big part of the oil major’s carbon reduction strategy is the use of carbon credits to offset emissions.
Originally, Shell aimed at spending $100 million each year on carbon offsets. The oil company also targeted to generate 120 million carbon credits yearly by 2030 from natural carbon sequestration projects. These targets would have offset about 10% of Shell’s carbon emissions. But with the company’s recent revelation, they confirmed that they’re putting an end to those plans. However, the company hasn’t revealed publicly any new plans for carbon credits or how they now intend to meet their climate targets. According to Shell, those prior goals weren’t attainable due to the lack of carbon offsets that meet its quality standards. […]
As what [Flora Ji, a 17-year Shell veteran confirmed], Shell’s long-term approach to carbon reduction toward net zero follows the Science-Based Targets initiative. That means avoiding emissions first and reducing them before resorting to carbon offsets. If Shell stays loyal to its net zero pledge, it will still need carbon offsets eventually, according to BloombergNEF analysis. The Dutch energy giant will be needing the offset credits for the residual emissions on its way to net zero. Indeed, Shell is not totally abandoning its carbon offset efforts; only the $100M and 120M credit targets. And though it’s prioritizing its short-term goal of maximizing profits, it has yet to disclose new plans for its long-term climate targets.