Shell invests $8.2b in low carbon energy, others in 2022

By Akinola Ajibade

Shell  has invested $8.2bilion in low carbon energy and non-energy products in the financial year ending 2022. 

The oil major invested around a third of its total cash capital expenditure of $25 billion, Out of this,  $4.3 billion was invested in low-carbon energy solutions, marking an  increase of 89% compared with the previous year.

In the 2022 budget are capital spending on biofuels, hydrogen and charging for electric vehicles, as well as wind and solar power [ The remaining $3.9 billion was invested in non-energy products such as chemicals, lubricants and convenience retail, which do not produce emissions when they are used by our customers.

According to Shell Plc’s Published Energy Transition Progress Report 2022, which is expected to be presented to shareholders for an advisory vote during its Annual General Meeting on May 23, this year, the global oil firm has made remarkable progress  towards becoming a net-zero emissions energy business by 2050, as it has continued to supply the vital energy the world needs during a time of great volatility,” said Wael Sawan, Shell’s Chief Executive Officer. 

Adding that: " Shell is  proud of the progress achieved in areas such as 30 per cent reduction in carbon emissions in  its operations, compared  with 2016 on a net basis and  investment in non-energy products by 9% compared with 2021.”

Continuing further, Sawan said the investments have advanced a central part of the company's  strategy which is to sell more products with low-carbon emissions to help both Shell and our customers meet their climate targets. 

He said that two-thirds of Shell's capital spending in 2022 was on maintaining supplies of the vital energy the world needs today. Shell  invested $4.2 billion in liquefied natural gas (LNG) as well as gas and power marketing and trading, an increase of 17% compared with the previous year. We expect LNG will remain an important part of the energy mix for many years to come because of its role in reducing emissions from power generation and transport. 

Besides, the energy giant, also  increased its  investments in oil production and oil products by 30% to $12.5 billion. Part of the investments include $8.1 billion in  Upstream business in order to maintain its assets and make up for the natural decline in oil and gas production among others.

He said the net carbon intensity of the energy products sold by Shell had fallen by 3.8%, compared with 2016, by the end of 2022.

“Our analysis, using data from the International Energy Agency, shows the net carbon intensity of the global energy system fell by around 2% over that time.”

The report also highlighted important steps that Shell has taken to advance its energy transition strategy. These steps  include significant investments in liquefied natural gas (LNG), which the company expects to remain an important part of the energy mix for many years to come, partly because of its role in reducing emissions from power generation and transport, $1.6 billion investment in Indian renewable power developer Spring Energy, and the final investment decision on the Holland Hydrogen 1 project in the Netherlands, which will be Europe’s largest renewable hydrogen plant, acquisition of Denmark’s Nature Energy, which produce  renewable natural gas, for around $2 billion.dencreased in the number of electric vehicle charge points it owned or operated worldwide by 62% to around 139,000 in 2022, up from 86,000 the previous year.

Shell's Chair, Sir Andrew Mackenzie  said:“The firm believes  the progress, which it has  made in line with energy transition strategy plans for the benefit of its customers, shareholders and the wider society."