Company Vice President for Engineering Technology lays out multinational’s strategy at RCGI event in São Paulo
It’s “mission possible”. That is how Shell’s Vice President for Engineering Technology, Ajay Mehta, defined the objective of the Anglo-Dutch multinational regarding net-zero greenhouse gas emissions for the company by 2050. “We were not the only company to announce a net-zero emissions goal by that year. Several declared similar intentions of achieving this highly ambitious objective. It will require not only technological innovation, but also a gigantic amount of determination and I believe that industries, universities, and governments will have to unite to make this happen,” stated Mehta in a lecture given at the Annual Conference of the Research Centre for Innovation in Greenhouse Gases (RCGI), on October 25, at the University of São Paulo’s (USP) International Diffusion Centre, in the capital city.
The executive stated that the company’s strategy is in line with the goal of the Paris Agreement signed by 195 countries in December 2015, during the 21st United Nations Conference on Climate Change, which seeks to limit the average global temperature increase to 1.5 degrees Celsius above pre-industrial era levels. Shell’s plan, which follows the pattern established by the Greenhouse Gas Protocol, where three scopes of emissions are defined. Scope 1 covers the direct emissions of all of the company’s operations, which include the exploration and production of petroleum and gas, as well as processing and refining, and the production of chemical substances. Scope 2 takes in the indirect emissions arising from the energy (electricity, for example) purchased from third-parties. And Scope 3 has to do with the emissions generated by the company’s customers, mainly when using the products sold by the company. “For us, it is not enough to reduce the direct emission of our products; we also need to take into consideration the emissions of the products when they are being used,” said Mehta.
The company estimates that the peak of total emissions of CO2 coming from energy it produced and sold occurred in 2018, when 1.7 gigatons were released into the atmosphere, on an annual basis. An intermediary goal is to reduce by half the emissions of Scopes 1 and 2, which represent 15% of the GHGs considered in the protocol – by 2030, compared to the levels in 2016. The remaining 85% come from Scope 3. “I think we were the first company to publically admit that it would not be enough to deal only with Scopes 1 and 2,” Mehta said. “And we have less than 30 years to cut all these emissions to zero.”
In order to gradually meet the objective, the company has noted several pillars or “building blocks”. Increasing operational efficiency is one of them, where one of the goals is to stop burning gas during operations and reduce methane leaks as much as possible. Another block is in changing the company’s portfolio toward natural gas.
“In the past, we produced about 70% petroleum and 30% natural gas; by the end of the decade, we will probably see between 55% and 60% of our global portfolio taken by natural gas,” Mehta said, pointing out the carbon dioxide footprint of natural gas production is significantly less than that of petroleum and, therefore, the company considers the product to be an important transition fuel. “I know this is a polemical issue, because some people want fossil fuels to be substituted all at once, but for the time being no one has found a silver bullet to resolve the issue.” The company expects a decline in petroleum production of 1% to 2% per year.
Another part of the company that is growing is the area of low-carbon energy solutions, like the use of renewable sources for obtaining electricity, according to the Vice President of Engineering Technology. “We are committed to maximizing the electrification of our operations.”
The emphasis on low-carbon fuels, like hydrogen and biofuels, is another place moving in the direction of the goal. The idea is by 2030 to multiply by eight the quantity of low-carbon fuels produced by the company.
Carbon capture and storage (CCS) is also one of the block expected by the company to help it reach net-zero emissions. The objective is to be able to capture and store 25 million tons annually by 2035. The company currently has eight projects of this type in different phases of development. “Today, there are less than 40 CCS projects, worldwide, because there is a lack of political will on the part of governments and industries,” Mehta says, pointing out that it is very hard to imagine a favorable global scenario without at least a little involvement with carbon capture and storage technologies.
The company will also invest in nature-based solutions and to that end it expects that some 120 million tons of carbon will be consumed by natural sinkholes annually. The reforestation of large areas is one of the options, the executive stated.