Shell aims to reduce the carbon intensity of the energy products we sell by 100% by 2050 in step with society1. Becoming a net-zero emissions energy business is a huge task, and the business plans we have today will not get us there. Shell’s plans must change over time – as society and customer also change – and Shell’s ambition requires consideration of scope 3 emissions produced by customers.

However, we can’t achieve our ambitions alone. In the Future of Energy Challenge: Net-Zero Emissions, Net Impact chapter members are charged this year with finding innovative solutions to help reduce scope 3 emissions. The GHG Protocol Corporate Standard is an international guideline designed to help companies and other organizations identify, calculate, and report greenhouse gas (GHG) emissions. It classifies emissions into three scopes:

  • Scope 1: direct emissions produced by company-owned facilities and operations
  • Scope 2: value chain emissions outside scope 1 operations. They are indirect emissions from the generation of purchased energy, sourced from outside facilities
  • Scope 3: value chain emissions outside scope 1 and 2, including emissions from suppliers, employees, and product users. E.g., in the case of Shell, scope 3 emissions include those that come from customer use of refinery and natural gas products (individual and commercial).

Scope 3 emissions tend to be greater volumetrically than scope 1 and 2 combined. These emissions are wide-ranging in what they encompass and vary significantly by company. Scope 3 emissions are often the most complex portion of a company’s GHG footprint, and because they are indirect emissions that take place down the supply chain and outside the company’s direct control, it is often more difficult for companies to address them in efforts to reduce their overall carbon footprint. For example, Royal Dutch Shell plc and its subsidiaries (Shell Group) aims to reduce the carbon intensity of the energy products they sell by 100% by 2050 in step with society. Becoming a net-zero emissions energy business is a huge task. The business plans that Shell Group has today will not get us there. So, those plans must change over time, as society and customers also change. This work requires consideration of scope 3 emissions produced by customers.

While mobility and plastics are deemed out of scope for this competition, solutions may address the following areas and examples:

  • Carbon technology (e.g. carbon capture and/or storage, direct air capture)
  • Infrastructure efficiency (e.g. smart buildings or fugitive emissions from gas usage in a community)
  • Material circularity (e.g. materials recycling and re-use, excluding plastics)
  • City-level solutions (e.g. electrifying infrastructure, green urban planning, carpooling incentives, smart cities)
  • Power: hydrogen, renewable, Storage (e.g. wind, solar, tidal energies)
  • Regenerative energy (e.g. waste to energy systems, wind turbines on highways, microturbines on rainwater runoff)
  • Energy access (e.g. microgrids in disadvantaged communities, resilient energy supplies)
  • Energy education (e.g. learning programs on efficient energy usage)

Amidst the complexity of supply chains, addressing scope 3 GHG emissions is an area with substantial opportunities for aspiring entrepreneurs looking to have an impact in the energy space. Shell is excited to invite the next generation of innovators to submit their solutions to this year’s Future of Energy Challenge.

1We may refer to Shell’s “Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries. Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, Shell’s operating plans, outlooks, budgets and pricing assumptions do not reflect our net-zero emissions target. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans, outlooks, budgets and pricing assumptions to reflect this movement.