Shell Moves Towards a Lower Net Carbon Footprint

As the petrochemical industry adapts and adjusts to the challenges of COVID-19, it’s finding that consumer demand and the expectations of society are changing as well. The world wants more sustainability: this means less CO₂ emissions and more sustainable products. Business customers are responding to these changes, a trend that is expected only to increase.

Despite the challenges, Shell is setting a strategy to accelerate the transition of our business to net-zero emissions in a way that creates value for our shareholders, customers, and wider society. We have set environmental ambitions for 2030 and later, as well as shorter-term goals. We will continue to look for opportunities to go further and will report our progress in a transparent way.

Achieving net-zero emissions means tackling climate change by contributing to a net-zero world by reducing emissions from our operations and the energy products we sell to our customers. Achieving our targets could mean that by 2030, we are:

• Providing enough renewable electricity for 50 million households
• Operating more than 2.5 million charging points for electric vehicles
• Producing eight times more low-carbon fuels
• Tripling the amount of biofuels and hydrogen in the transport fuels we sell

Shell’s Powering Progress report further lays out how we will undergo this transformational action in ways that empower our stakeholders and exemplify our values.

Three Things The Petrochemical Industry Needs To Do To Thrive

Decarbonize

Many finished products made from chemicals are helping the world address climate change. Still, Shell believes the chemical industry must act now and work together to reduce the carbon intensity of the processes used to make these chemicals.

At Shell we aim to be a net-zero emissions energy business by 2050, in step with society and our customers. We aim for net-zero emissions through our products and reducing the carbon intensity of our products. We are also working with sectors that use energy to help them find their path to net-zero emissions. However, the business plans we have today will not get us there. So, our strategies must change over time, as our society and customers also change.

How will Shell Chemicals play its part? The most effective route is to improve the energy efficiency of our plants. For example, we recently announced that we are upgrading our cracker furnaces at our Moerdijk plant in The Netherlands. We are also embracing new technology when designing assets. Also, we built our latest ethylene joint-venture plant in China with industry-leading energy efficiency in mind. And our polyethylene plant under construction in Pennsylvania has been designed with an energy-efficient gas cracker and a 250-megawatt cogeneration power unit. It will also use hydrogen as a fuel source for the cracker furnaces.

Our integration with Shell’s Renewables and Energy Solutions business is also a huge advantage to bring low-carbon energy sources into our production sites. Examples of this include our solar farm in The Netherlands at our Moerdijk plant and the industry-leading hydrogen electrolyzer at our Rhineland site. In addition, Shell and Dow have teamed up to develop, design, and scale-up cracking technology that can use renewable electricity rather than fossil fuels.

We are also exploring carbon capture and storage (CCS) options to reduce the CO₂ footprint of production. The Quest project in Scotford, Canada, has captured and stored four million tons of CO₂ since it began in 2015. In addition, we are working with partners to progress a potential CCS project in the Port of Rotterdam. And the team at Shell Chemicals is investigating low-carbon alternative feedstock such as biomass and plastic waste.

Shell’s strategy to achieve net-zero emissions also includes:

• Setting both near-term and long-term targets to gradually reduce the carbon intensity of the energy products we sell, to reach a 100% reduction by 2050
• Linking the pay of more than 16,500 staff to our near-term carbon intensity reduction target of 6-8% by 2023
• Investing an average of $2-3 billion each year in our Renewables and Energy Solutions business
• Accessing an additional 25 million tonnes a year of carbon capture and storage (CCS) capacity by 2035 -- equal to 25 CCS facilities the size of our Quest site in Canada

Learn more about Shell’s climate target goals in our 2020 Sustainability Report.

Create Circular Products

Shell, like others, wants to be part of creating solutions to the growing problem of plastic waste. One solution uses the power of the market. Effective chemical recycling practices will create value for plastic waste. And as chemical recycling grows in popularity, plastic is less likely to be discarded in the environment.

We plan to increase the amount of recycled plastic in our own packaging to 30% by 2030[1] [2] , and ensure that the packaging we use for our products is reusable or recyclable. We also aim for zero waste by increasing reuse and recycling in our business and supply chains. In doing so we are transforming our business and finding new opportunities.

At Shell Chemicals, driving the circular economy of plastics is a critical element of our growth strategy. Our ambition is to use one million metric tons per year of plastic waste as feedstock in our global chemical plants by 2025. We started by producing chemicals at our Norco plant in Louisiana from plastic-waste-derived feedstock last year. Shell Chemicals is already working with several companies who collect and transform plastic waste, to quickly scale this solution to industrial and profitable quantities across our chemical plants.

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Collaborate

Lastly, we need to collaborate. This means working together within the sector with other chemical companies.

To innovate.

To share risks.

And to find the most efficient solutions to create a more sustainable future.

But collaboration must be much broader than along the supply chain to be effective. For example, companies should collaborate with governments and regulators. Although they shouldn’t wait until regulations require them to implement sustainable practices and products, leading companies should support appropriate policies and regulations that help point consumers, communities, and companies in the direction of sustainable solutions and innovation. To that end, we do business in a clear and open way, and we provide transparency where possible throughout our industry.

Read: Polyethylene Resin Manufacturers Team Up to Put Pellets In Their Place

Support a Circular Economy For Plastics

Today, just 8.7% of US-collected plastic waste finds its way back into the economy. Therefore, regulators should recognize and incentivize converting plastic waste to chemical feedstock via chemical recycling in the same way as traditional recycling to support a more circular economy. In addition, we support policies that promote reuse, recycling, and energy recovery of plastics and take into account impacts over the lifecycle, including CO₂. These will continue unlocking the economic value of plastic waste and creating a circular economy for plastics.

The chemicals industry has proven it can adapt. We have the perfect example of this in the early months of COVID-19. One thing is clear: for a chemicals company to survive and thrive through COVID-19 and going forward, it needs to be:

• Resilient
• Efficient
• Technologically advanced
• Differentiated
• Customer-centric

Shell Chemicals is well-positioned and at the start of our differentiated and performance growth journey - with our polyethylene plant under construction in the U.S. and our polycarbonate ambitions starting in China. But there is far more to be done.