© Reuters. FILE PHOTO: The Royal Dutch Shell logo is seen at a Shell gas station in London on January 31, 2008. REUTERS / Toby Melville
By Ron Bousso
LONDON (Reuters) – Royal Dutch Shell (LON 🙂 will seek ways to accelerate its energy transition strategy and deepen carbon emissions cuts following a landmark Dutch court ruling last month, Chief Executive Ben van Beurden said on Wednesday, a move that will likely lead to a dramatic contraction in its oil and gas business.
Shell plans to appeal the May 26 court ruling that ordered it to cut greenhouse gas emissions by 45% by 2030 from 2019 levels, significantly faster than its current plans.
But the court’s ruling applies immediately and cannot be stayed before appeal, van Beurden said in a LinkedIn post https://www.linkedin.com/pulse/spirit-shell-rise-challenge-ben-van -beurden.
“For Shell, this failure does not mean a change, but an acceleration of our strategy,” said van Beurden.
Shell shares rose 0.8% at 1346 GMT compared to a 0.4% gain in the broader European energy index.
Earlier this year, Shell established one of the most ambitious climate strategies in the industry. It aims to reduce the carbon intensity of its products by at least 6% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050 from 2016 levels.
“We will now look at ways to further reduce emissions in a way that remains useful and profitable. That likely means taking some bold but measured steps in the years to come.”
The court ruling asked Shell to cut its absolute carbon emissions, a move that van Beurden had previously rejected because it would force Shell to reduce its oil and gas business, which accounts for the vast majority of its revenue.
Shell currently plans to increase its spending on renewable energy and low-carbon technologies to 25% of its overall budget by 2025.
Analysts have said the ruling could lead to a 12% decline in the company’s power output, including a sharp drop in oil and gas sales.
The court case came shortly after the International Energy Agency said in a report that investments in new fossil fuel projects should stop immediately to meet UN-backed goals aimed at limiting global warming.
Shell, which is the world’s leading oil and gas trader, has said that its carbon emissions peaked in 2018, while its oil production peaked in 2019 and is forecast to fall between 1% and 1%. 2% per year.
The ruling by the court in The Hague, where Shell is based, could trigger action against energy companies around the world.
But van Beurden repeated his call on governments and companies to address oil and gas consumption around the world, and not just supply.
“Imagine that Shell decided to stop selling gasoline and diesel today. This would certainly reduce Shell’s carbon emissions. But it wouldn’t help the world one bit. The demand for fuel wouldn’t change. People would fill their cars and delivery trucks in other gas stations, “van Beurden said.
“A court that orders an energy company to reduce its emissions, and the emissions of its customers, is not the answer,” he added.
Fusion Media or anyone involved with Fusion Media will not accept any responsibility for loss or damage as a result of reliance on information, including data, quotes, charts, and buy / sell signals contained on this website. Be fully informed about the risks and costs associated with trading the financial markets, it is one of the riskiest forms of investment possible.