Shell has recently reported a significant shift in its approach to managing carbon emissions, revealing a substantial increase in the use of carbon credits as a key strategy. This development emerges in the context of the company revising its carbon intensity reduction targets for 2030, signalling a heightened focus on profitability through oil and gas ventures.
A car driving on a road with forests towards the sun. AI generated picture.
The energy giant's sustainability efforts have seen a notable pivot, with its latest annual sustainability report indicating a reliance on carbon credits (carbon units) to achieve its emissions reduction figures. In 2023, Shell retired 20 million tonnes of carbon offsets, a stark increase from the 4.1 million tonnes reported in 2022. This strategic shift has contributed to a reduction in net carbon intensity, largely attributed to decreased power sale intensity and the strategic use of carbon credits.
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Moreover, Shell has expanded its carbon credit usage to encompass non-energy products and business travel, totalling 21.8 million credits retired. The company disclosed an $86 million investment in carbon credits in 2023 amidst a volatile carbon market, focusing on both nature-based and technological projects.
Despite these efforts, Shell has faced criticism for weakening its 2030 carbon reduction target, moving from an ambitious 45% reduction to a more modest 15%–20% compared to 2016 levels. This adjustment has sparked debate over the company's commitment to comprehensive emission reductions versus financial returns.
Read more: Shell: achieving net zero through nature-based solutions
As Shell continues to navigate the complexities of reducing emissions while pursuing economic gains, the role of carbon credits in its sustainability strategy remains a focal point of discussion.
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