Shell publishes Energy Transition Strategy 2024

Shell publishes Energy Transition Strategy 2024

London, 14 March 2024 – Shell plc (Shell) has published its first update on the energy transition since the launch of its Powering Progress strategy in 2021. At our Capital Markets Day in June 2023, we discussed how our strategy generates more prices with fewer issuances. with a part about “more price”. In this Energy Transition Update, we talk about how the same strategy is helping to “reduce emissions”.

Our goal to achieve net-zero emissions by 2050 across all our operations and energy products is transforming our business. This goal supports the Paris Agreement’s more ambitious goal of restricting global warming to 1. 5°C above pre-industrial levels. Shell’s strategy supports a balanced and orderly transition from fossil fuels to low-carbon energy is the answer to maintaining a secure and affordable energy supply.

“Energy has contributed to human development, enabling many other people around the world to live richer and more disgusting lives. Today, the world will have to meet the growing demand for energy while also meeting the pressing challenge of climate change. I am encouraged by the immediate progress made in recent years on the energy transition in many countries and technologies, reinforcing my strong confidence in the direction of our strategy,” said Wael Sawan, Chief Executive Officer of Shell.

Our energy transition plans cover all of our businesses. Liquefied vegetable fuel (LNG) is a key fuel in the energy transition, and we are expanding our world-leading LNG business with lower carbon intensity. We’re cutting emissions from oil and gas production at the same time. We are expanding sales of low-carbon energy responses while cutting sales of petroleum products such as fuel, diesel and jet fuel. As one of the world’s largest energy traders, we can link low-carbon energy sources to demand. , as we have done for many years with oil and fuel.

We’ve made progress on our weather targets:

As Shell transforms into a net-zero energy company, we aim to lead the energy transition where we have competitive advantages, see strong visitor demand and identify transparent regulations by governments. To contribute to the decarbonisation of the maritime sector, we have set ourselves a new ambition: to reduce visitor emissions from the use of our petroleum products by 15% to 20% by 2030 compared to 2021 (Scope 3, Scope 11). [A]

Our search for spaces where we can raise the price cap has led to a strategic shift in our embodied energy business. We plan to expand our energy business, adding renewables, in countries such as Australia, Europe, India and the United States, and have come out offering power directly to families in Europe.

We will continue to transparently report on our progress and ambitions on an annual basis.

Between 2023 and the end of 2025, we are investing between $10 billion and $15 billion in low-carbon energy solutions, making us a major investor in the energy transition. And in 2023, we invested $5. 6 billion in low-carbon solutions. representing more than 23% of our total capital expenditures.

These investments include electric vehicle charging, biofuels, renewables, hydrogen, and carbon capture and storage. Our investments in new technologies help reduce emissions for Shell and our consumers. Our goal is to help develop new technologies to be an affordable option for our consumers. and concentrate our advocacy on key spaces that are critical to the energy transition: policies that contribute to national net-zero ambitions, adding carbon pricing, secure energy supply. that the world needs, driving adjustments in demand and the progression of low-carbon solutions.

[A] Customer emissions from the use of our petroleum products (Scope 3, Scope 11) were 517 million tonnes of carbon dioxide (CO2e) in 2023 and 569 million tonnes of CO2e in 2021.

Notes to editors

InquiriesUK/International Media Relations: 20 7934 5550

Shell plc – Energy Transition Strategy

Message from the President

Our purpose to become a net-zero energy company by 2050 remains at the core of our strategy and is transforming our energy operations and products. This purpose supports the more ambitious purpose of the Paris Agreement, which is to restrict the accumulation of energy in the world. average temperature at 1. 5°C above pre-industrial levels.

As we try to reach net zero, we are reducing emissions from our operations and energy products, while also becoming an increasingly successful organization. Our energy transition plans cover all our businesses: Integrated Gas, Upstream and Downstream, Renewable Energy and Energy Solutions. In this post, we’ve laid out pathways to net-zero emissions for our two most important visitor sectors: transport and industry, based on the spaces where we have the competitive benefits needed to supply our consumers with the products they want throughout the transition.

Helping to reduce our visitors’ emissionsWe need to be leaders in the decarbonization of transportation through the strength of our logo, deep visitor relationships, and global reach. Our goal is to expand our public charging network for electric cars and remain one of the largest EV mixers and suppliers in the world. biofuels [A]. As the energy transition progresses, we plan to sell more low-carbon products and solutions and fewer petroleum products, adding gas and diesel.

To measure our progress, we have set ourselves a new ambition: to reduce our customers’ emissions from the use of our petroleum products by 15% to 20% between 2030 and 2021 (Scope 3, Category 11) [B].

Through our world-class business operations, we are able to match low-carbon energy to demand, as we have done for many years with oil, fuel and LNG.

As we try to achieve carbon neutrality, we are making clear the possible options for where we can raise the maximum price to our investors and customers. Our renewable energy will be key to helping our advertising consumers decarbonize and plan to grow our embedded energy business in countries such as Australia, Europe, India and the United States. We have stopped supplying energy directly to families in Europe because we do not have a competitive position there.

Technologies of the futureWe are expanding our investments in studies and progression and making an investment in the fuels of the future. Our goal is to expand new technologies to create affordable features for our consumers in the 2030s. We are building Holland Hydrogen 1, one of Europe’s largest renewable hydrogen plants, near our chemical and energy park in Rotterdam, the Netherlands. We are also investing in carbon capture and garage generation to reduce emissions from our own operations, such as refineries and LNG plants, and, in the longer term, to help our commercial consumers reduce their emissions as well.

I was able to see first-hand the prospects of some of the exciting new technologies in which we will make my stopover in Oman in January 2024. We are part of an organization exploring a task to produce green ammonia and liquefied artificial fuel from renewable hydrogen. These technologies are still in their infancy, but they could help decarbonize the industry and promote trucking in the future.

Transparency and shareholder supportIn 2021, 89% of our shareholders voted in favour of our electric transition strategy. Since then, we have two progress reports, which have also been supported through our shareholders. Along with other members of the Board of Directors, I met with many of Shell’s major institutional shareholders who followed those votes. I appreciate your time and feedback and look forward to our next engagement in April 2024.

The publication of our Energy Transition Strategy brings greater transparency and greater discussion with our institutional investors. We’ve heard that after Capital Markets Day, for example, some asked us to be clearer about how we’re going to create more prices and less emissions, and that’s precisely what we’re featured in this update.

This year, we are again asking our shareholders to vote at our Annual General Meeting on our energy transition strategy. As before, this vote is purely advisory and binding on our shareholders. The legal duty to approve or oppose Shell’s strategy rests with the Board of Directors. and the Executive Committee.

Our strategy will transform Shell into a net-zero energy company, creating prices for our shareholders, consumers and society as a whole. We will propose an advisory vote to shareholders at the 2024 Annual General Meeting based on the energy transition projects outlined in this publication and in our 2023 Annual Report and Financial Statements. The Board recommends that shareholders vote in favor of the Resolution asking them to assist those projects.

Presentation via the Director-General

This is our first update of the Energy Transition Strategy we published in 2021. It’s an opportunity to take stock of our progress, reflect on what we’ve learned, and look ahead to the long term as we build Shell into a net-zero energy company. . by 2050.

Over the past three years, we have seen how critically important safe and affordable energy is to economies and the lives of others. As the world’s population grows by around 2 billion people by 2050 and the benefits of energy become greater for millions of people, for those who don’t have it today, the demand for power will only increase.

At the same time, the world wants to achieve an orderly transition from fossil fuels to low-carbon energy to achieve net-zero emissions. Today, fossil fuels cover around 80% of the world’s energy demand, with even greater reliance in many countries. countries on the rise. We make a balanced energy transition, one that maintains a secure and affordable source of energy as the world moves towards net-zero emissions.

Shell has a vital role to play in delivering the energy the world wants and helping to build the low-carbon energy formula of the future. There are exciting opportunities to use the strength of our innovation functions in spaces where we can have the greatest impact. Our goal – to provide more energy and cleaner answers – sets the direction for everything we do.

Since launching our Powering Progress strategy, we’ve made significant progress on our climate goals and learned where we have competitive advantages. By the end of 2023, we had achieved more than 60% of our goal of halving emissions from our operations. until 2030, until 2016. We have achieved this by adapting our portfolio, adding refineries, and making adjustments to our operations, such as powering certain oil and gas platforms with renewable energy.

We continue to be a leader in reducing emissions of methane, a potent greenhouse fuel that can be released in the production of oil, fuel and LNG. We were one of the first corporations to set a goal of reaching near-zero methane emissions by 2030. In 2023, we continue to keep our methane emissions intensity well below 0. 2%. We have made smart strides towards our purpose of getting rid of regime flaring from our upstream operations, compared to 2016 [A]. long-term goal of reducing the net carbon intensity of the energy products we sell, with a 6. 3% alleviation from our 6-8% target compared to 2016.

More Value, Less Emissions At our Capital Markets Day in June 2023, we discussed how our Powering Progress strategy generates more price with less issuance, with a “more price” component of our strategy. In this Energy Transition Update, we explain how the same strategy allows for “fewer emissions”.

The focus on yield, field and simplification leads us to make transparent the possible options on where we can create the maximum price for our investors and consumers through the energy transition. Our ability to raise and invest capital depends on delivering strong returns to shareholders, uncovering the role Shell can play on the path to net zero. We believe this concentrate increases, not decreases, the likelihood that we will be able to achieve our climate goals and ambitions.

We, the world, will continue to need oil and fuel for many years to come (produced with much lower emissions), as well as cleaner energy, such as complex biofuels, renewables and hydrogen.

We, LNG, will play a critical role in the transition. It continues to be a secure source of energy in many European countries. It also provides flexibility to force grids as the strength of wind and sun expands, as well as opportunities to reduce carbon emissions from industries such as cement and metal by replacing coal.

In the future, by powering our LNG plants with renewable electric power and adding carbon capture and storage, we aim to reduce the carbon intensity of our LNG plants. Our LNG joint venture in Canada (Shell has a 40% ownership), for example, the largest private sector investment in the country’s history, will use vegetable fuel and renewable electric power to reduce plant emissions by more than a third of global emissions. the most effective installations.

Operational life according to original design. We use the same concept for two other platforms in the Gulf of Mexico, Whale (60% Shell stake) and Sparta (51% Shell stake).

Supporting our consumers in their decarbonization Our goal is to be a leader in the energy transition where we have competitive advantages, see strong visitor demand, and identify transparent regulations by governments. The shipping industry is a clever example of this.

We leverage our visitor relationships and expertise to help decarbonise passenger cars, heavy-duty trucks, planes and ships. Our goal is to expand our public charging network for electric cars and remain a leader in biofuels, adding sustainable aviation fuels or renewable diesel made from waste. By repurposing our remaining built-in refineries across 4 regional chemical and energy parks, we are creating the low-carbon production sites of the future.

As we increase our sales of low-carbon fuels, we plan to reduce sales of petroleum products such as gas and diesel. We have set ourselves a new ambition to measure our progress, to reduce visitor emissions from the use of our petroleum products through 15-20% from 2030 to 2021 (Scope 3, Scope 11) [B]. Our ambition is in line with the European Union’s meteorological targets for shipping, which are among the most progressive in the world.

Towards net zeroIn total, we invested $5. 6 billion in low-carbon responses in 2023, representing 23% of our capital expenditures. Between 2023 and 2025, we spent between $10 billion and $15 billion on low-carbon responses, making us a leading investor in the energy transition. With our targeted approach, our investments will have a significant impact, allowing us to scale low-carbon responses at increasingly affordable costs for our customers.

Shell will supply the other types of energy the world needs. We will invest in low-carbon LNG production, reducing emissions from oil and fuel production and offering cleaner energy solutions. As we transform Shell into a net-zero energy company, we are the investment case and spouse of choice during the transition of power.

Wael SawanManaging Director

Our 2024 Energy Transition Strategy

1 Today, the world will have to meet the growing demand for energy while also addressing the pressing challenge of climate change. A balanced and orderly transition from fossil fuels to low-carbon energy responses is needed to maintain a secure and affordable energy supply.

2 Our goal to achieve net-zero emissions by 2050 across all our operations and energy products is transforming our business. This purpose supports the more ambitious goal of the Paris Agreement, which is to restrict the increase in global average temperature to 1. 5°C above pre-industrial levels.

3 At our Capital Markets Day in June 2023, we discussed how our Powering Progress strategy is driving more prices with fewer emissions, with a “more price” component of our strategy. In our 2024 Energy Transition Strategy, we look at how this same strategy achieves “lower emissions”.

4 By the end of 2023, we had achieved more than 60% of our goal of halving scope 1 and 2 emissions from our operations through 2030 and 2016, and reduced our overall methane emissions by 70%.

6 Investment in oil and fuels is expected to fall at a slower rate than the natural rate of decline in oil and fuel deposits worldwide, which is 4% to 5% per annum.

7 We expect an immediate expansion of electric vehicles, adding electric trucks, and that biofuels and plant-based fuels will also play a role in reducing emissions from heavy-duty transport. To contribute to the decarbonisation of transport, we have set ourselves a new ambition: to reduce our customers’ emissions from the use of our petroleum products by 15-20% by 2030 compared to 2021 (Scope 3, Scope 11). This is up more than 40% compared to 2021, with emissions reported in 2016. [A]

8 We believe that carbon relief technologies, such as carbon capture and storage, will be mandatory for the world to succeed in net-zero emissions. We believe that once key regulations, technologies and criteria are in place, large-scale trading of carbon credits will emerge.

9 The focus on yield, field, and simplification leads us to make transparent the possible options on where we can create the maximum price for our investors and clients. We know that renewable energy will be an essential component of a net-zero world. In line with our strategic shift to prioritize price over volume of energy, we are concentrating on decided markets and segments. As a result, we expect a smaller overall expansion in electric power sales. We are now targeting a 15-20% relief in the net carbon intensity of the energy products we sell through 2030, compared to 2016, up from 20%.

Our Adventure to Zero

2023

2022

2021

2019Publication of our first-ever climate review of industry associations, which examines the alignment between Shell’s climate-related policy positions and those of 19 key industry associations.

2018Signing of a joint agreement with the investment organization Climate Action One Hundred pronouncing the moves made through Shell demonstrating its alignment with the goals of the Paris Agreement.

2017 We announced the carbon intensity ambition of the energy products we sell for approximately part of the year 2050 (Scope 1, 2 and 3).

Our Updated Goals & Ambitions

Emissions from our operations (Scope 1 & 2)

Halving the target for scope 1 and 2 emissions up to 2030 [A] in operation (base year 2016)

ObjectiveEliminate the burn-out regime in upstream operations by 2025 [B]

TargetTo keep methane emissions intensity below 0. 2% and close to zero methane emissions by 2030

ObjectiveUpdated

Net Carbon Intensity (CCI) We introduced a rate of 15-20% towards our 2030 KIC aid target (base year 2016)

AmbitionNew

Petroleum ambition To reduce visitor emissions from the use of our oil by 15% to 20% by 2030, Scope 3, Category 11 [C] (base year 2021)

Reducing Scope 1 and 2 emissions: our operational control

Operational Scope 1 & 2 Emissions [A]Million tonnes of CO2e

50% aid target by 2030

2023: more than 60% of our 2030 target

Total Routine Burn [A] [H]

Millions of tonnes of hydrocarbons burned

Reduce emissions related to our customers’ use of energy products.

Net Carbon Intensity (NCI) [C]g CO2e/MJ [C]

Customer emissions from the use of our oil (Scope 3, Scope 11) [I]million tonnes of CO2e

We believe our absolute total emissions peaked in 2018 with 1. 73 gigatonnes of carbon dioxide equivalent (GtCO2e).

The Power System: Our Convictions

Today, fossil fuels cover about 80% of the world’s number one energy consumption. This dependency is even greater in many emerging countries where security of sources and stability of value are factors in their development.

As energy demand continues to grow, driven by population expansion and increased prosperity, the world wants to shift from fossil fuels to low-carbon energy in a balanced way towards net-zero emissions. The transition to net-zero emissions will not be linear, as other countries adopt other approaches and evolve at different paces.

Public policies, technological advancements and infrastructure, as well as a well-functioning carbon market, are key to generating call signals for the personal sector to invest at scale. This will require collaboration between policymakers, consumers, and personal organizations like Shell, which hold the monetary power. strength, joy and ability to build the new energy system.

Developing Our Convictions

We have developed our ideals and our commitments to customers, policymakers, scientists, and thought leaders around the world. We use studies from our generation programs, as well as paints from the International Energy Agency, the Intergovernmental Panel on Climate Change, and several other external agencies.

Our scenarios are quantified through our global energy models, which are complemented by meteorological research conducted in collaboration with the Massachusetts Institute of Technology. We will continue to challenge our own ideals as technology, policies, and visitors’ personal tastes evolve.

Since 2000, annual air mileage has tripled, road passenger mileage has doubled, and metal production has more than doubled. We expect continued expansion in the trade and shipping sectors, driven by population expansion and emerging living standards in emerging and emerging countries, where more than a quarter of the world’s population still lacks basic energy supplies.

Oil demand has risen from 57 million barrels per day (mb/d) to nearly 100 mb/d over the past 40 years, with occasional annual dips due to recessions and a notable drop brought on by the Covid pandemic. In some cases, demand has recovered. However, we believe that oil expansion demand is expected to slow in the second part of this decade and could begin to decline in the 2030s due to the increasing power of vehicles and the expansion of electric vehicles.

Source: IEA Shell Analysis and Extended Energy Balances 2023).

Today, LNG accounts for around 13% of the global fuel market, a figure that is expected to exceed 20% by 2040. The global LNG market will continue to grow at least until the 2030s, driven primarily by trade decarbonization in China and increased power. Call in other countries. Asian countries. LNG can upgrade the use of coal in industry and power generation, and can supplement the source in regions where domestic fuel production is declining, such as Europe.

The outlook call for LNG is separate from pipeline natural gas, as the fuel can be transported in a short period of time and can also be used as a replacement for high-carbon liquid fuels in shipping.

Global demand for coal for production increased by 3. 6% between 2013 and the end of 2023, when it reached a new high. This accumulation was driven by strong demand in emerging economies. Global demand for coal for production increased by 35% in India and 13% in China during this 10-year period, due to rising demand for electric power and low hydropower generation. We believe that replacing coal with natural gas, LNG and renewables will be a key factor in reducing emissions.

Primary Energy Request by Region and Power Source, 2023 (exajoule)

Energy investment

Significant investments will be needed to continue sourcing oil and fuel while developing and commercializing low-carbon products.

This continued investment is because demand for oil and gas is expected to fall at a slower rate than the natural decline of the world’s oil and gas fields, which ranges from 4% to 5% annually.

Global oil and fuel production, outside of North America, amounted to around 120 million barrels of oil equivalent per day from 2013 to the end of 2023, despite cumulative oil and fuel investments of more than $2 trillion over the same period.

Final call for energy for the energy pass-through and energy carrier sector, 2023 (exajule)

[A]Gaseous is basically herbal gas; Solids are usually coal; Liquids are basically petroleum. However, there are cross-products, such as LPG (gaseous petroleum products) and CTL (liquefied coal). [B] Bioenergy includes classic and fashionable uses of biomass, biofuels, and biogas. [C] Includes rail, less than 5% of this category. Source: IEA Shell research and protracted balances of power (2023).

Global greenhouse fuel emissions in 2023 Carbon dioxide (CO2) emissions from the energy formula accounted for nearly three-quarters of global greenhouse fuel emissions in 2023. Stricter government policies will reduce carbon emissions at a rate consistent with the temperature goals of the Paris Agreement. Even without such policies, we expect global demand for fossil fuels to fall from the current level of around 80% to less than 70% by 2040. If the world goes on the path to net-zero emissions by 2050, that figure may fall to 70%, 50%. This will be driven by electrification and the intensification of renewable energy production.

[A] Includes business process emissions, 18% of the total. [B] Includes rail transport, 3. 5% of the total. [C] Issuances from structure-structure operations (which relates to business sectors). [D] 70% methane, from agriculture and fossil fuel production and use; 23% nitrous oxide; 7% others. [E] Land Use, Emissions Replacement Land Use, and Forestry (LULUCF). Source: IEA Shell research and protracted balances of power (2023).

Industry accounts for 44% of global final energy consumption, with oil, fuel and coal accounting for only about 64% of this demand.

Today, the industry also uses significant amounts of energy generated through fossil fuels. The sector includes heavy industry, soft industries such as manufacturing, mining, and agriculture, as well as raw fabrics without energy in chemicals.

Heavy industryHeavy industry includes the energy-intensive production of metal and cement, which uses high-temperature processes that can be complicated and expensive to electrify. This sector accounts for 17% of final energy consumption, mainly in the form of coal, fuel and electricity. .

The highest standards of living are based on the production of heavy industry. For example, the inventory of metal used per capita in OECD countries ranges from 10 to 15 tonnes per user (t/w), up to a global average of about four tonnes. /w [A].

The use of coal in heavy industry has driven much of the trade expansion in non-OECD countries over the past two decades, while OECD countries use much less coal and proportionately more fuel and electric power. They have a higher market share relative to coal, and we expect this trend to continue.

We believe natural fuels and LNG will play a vital role in replacing coal in high-temperature heavy industry applications. They can help address local air emissions and broader climate considerations.

More abundant and renewable electricity will also play a role in the decarbonisation of this sector. Once electrification is achieved, fuel will play a supporting role, as many business processes require maximum reliability in the supply of electrical power. We also see long-term prospects for hydrogen when it becomes cost-competitive.

Light industry accounts for approximately 17% of final energy consumption. Its energy ranges from fuel for heavy appliances to medium heat and electrical power for production facilities.

Non-energy use Non-energy use is governed by raw fabrics of oil and natural gas, as well as some coal in Asia. This accounts for around 10% of final energy consumption, but emissions are limited as raw fabrics are transformed into curtain products such as lubricants, plastics and fertilisers. Many of these products indirectly contribute to reducing emissions when used in building insulation or in plastics to reduce the weight of vehicles. We know that bio-based raw materials and recycling will become increasingly important in this sector.

[A] Includes heat. [B] Includes nuclear, renewable energy, and oil. [C] Includes liquid fossil fuels and bioenergy. Source: Shell Research on Extended IEA Energy Balances (2023).

Transport sector

The shipping sector accounts for only about 30 per cent of final energy consumption, with petroleum products accounting for more than 90 per cent of this demand.

Petroleum products dominate shipping due to their maximum power density, convenience, and cargo competitiveness. In some markets, such as Europe and the United States, select fuels such as ethanol are mandatory. In Europe, where taxes on road transport fuels are at an all-time high, electric fuels are still expensive in the maritime and air domains. Biooptions cost at least twice as much as petroleum products, and artificial fuels made from hydrogen can be up to eight times more expensive.

[A] Retail securities in Northwest Europe. [B] Beyond production costs, taxes particularly increase the value consumers pay for biodiesel, diesel, and gasoline. [C] Electricity costs (0. 2 to 0. 6 $kWh) adjusted for electric cars 2. 4 times more effective than foreign combustion engine cars. The levels of diversity indicated, from home/remote charging to fast charging on the road. Source: Market interpretations from Shell’s scenario team data from 2023, when Brent crude oil prices averaged $83 per barrel.

Today, about 1. 3 billion cars are on the roads, consuming about 25 million barrels of oil per day (mb/d), or a quarter of the world’s oil production. Biofuels such as ethanol are used in some markets, but lately they account for less than 5% of demand. We expect an immediate expansion of electric cars, adding plug-in hybrids. Today, there are around 40 million such cars on the roads, with up to 275 million expected by 2030. The availability of charging stations will be critical to the expansion of electric cars.

The share of electric cars in new car sales increased from less than 3% in 2018 to 18% in 2023. The fastest expansion is in China, the world’s largest automotive market, followed by Europe and the United States. There is a wide diversity of cars for sale under $40,000, while in other markets, electric cars sell for more than $40,000 before government subsidies apply.

AviationAviation fuel demand has recovered from Covid lows and now stands at around 7 mb/d. Sustainable aviation fuel (SAF), made from used cooking oils and other feedstocks, is seen as a credible alternative to jet fuel. Today, SAF accounts for less than 0. 1% of total demand, but we expect its market share to grow with government support.

Approximately 11 markets have SAF targets, in addition to Europe and Singapore. Some 25 airlines accounting for a total of 35% of global aviation emissions also have SAF targets. Government mandates are key to expanding demand for SAF, as it costs consumers two to 4 times more than traditional aviation fuel. There is little evidence that passengers voluntarily pay a premium to cover the additional cost. In the long term, technological advances may create opportunities for the use of artificial fuels such as e-kerosene, but more studies are still underway. And it takes progression.

Shipping accounts for about 6 mb/d of oil demand. Around 5% of the gross tonnage of ships in service today is fuelled by LNG, which can reduce emissions by up to 23% compared to traditional fuels. By order, about 25% of the gross tonnage is designed for LNG. A significant number of vessels in service today already have dual-fuel capabilities, giving them the flexibility to run on alternatives. We believe that the demand for LNG in shipping will increase. adding liquefied biomethane. Fuels such as methanol and ammonia may only be long-term transportation options, but we see demanding situations in both.

Buildings

Information generation services, along with knowledge centers, synthetic intelligence, and cryptocurrencies, make up a percentage of the rapidly growing structural sector. We believe that global demand for electric power in this area may double between 2023 and 2026.

Might

Electricity is the fastest decarbonizing component of the energy system. More than 40% of electricity is now generated from renewables and nuclear. Wind and solar generation has grown over the past 10 years, from 3. 5% of total electricity generation in 2013 to around 18% in 2023.

Around 22% of final energy consumption was electrified at the end of 2023, up from around 18% in 2010. This sector is accelerating, helped by the adoption of electric cars and heat pumps. The electrification of final energy consumption could be successful by 30-40% by 2040.

We believe herbs will continue to play a role as a substitute for coal in electric power generation, helping to reduce local air pollutants and carbon emissions. They are expanding rapidly and their role is very important in managing seasonal fluctuations in source and demand.

Carbon Reduction

We believe that reducing carbon emissions will be a vital tool to achieve net-zero emissions. Once key regulations and criteria are in place, large-scale carbon credit activity is likely to emerge.

Carbon can be used to offset emissions according to the mitigation hierarchy of avoid, reduce, and offset.

The middle level of rebates costs between $100 and $200 per ton and includes the use of carbon capture and storage (CCS) in power generation and industry. Reduction prices exceed $200 per tonne. These come with components from the commercial and maritime sectors, as well as direct carbon capture from the atmosphere.

Carbon removal is likely an important way to limit carbon accumulation in the long term. Shell’s two energy security scenarios envisage the need to remove several billion tonnes of carbon per year, which will need to be financed through the purchase of carbon credits by issuers. .

Demand for carbon credits in the voluntary carbon market is expected to grow in particular. CCS also has the potential to reduce CO2 emissions in particular. While today there are only about 50 million tonnes per annum (mpta) of CCS in circulation, approximately three hundred mtpa of projects [A] are being analysed. Many net-zero scenarios show that the industry is expected to succeed by more than 1,000 mtpa by the mid-2030s.

Shell’s 2030 strategy

Our convictions tell our strategy. While the energy transition will evolve at different rates in other countries, we expect global oil demand for an expansion to slow in this decade and most likely begin to decline over the next decade. We will also be expecting global demand for LNG to continue to grow until at least the 2030s.

We believe the world wants a balanced energy transition, one that maintains a secure energy supply while accelerating the transition to affordable, low-carbon solutions.

Our strategy supports a balanced transition by providing the oil and fuel that others need today, while helping to build the energy formula of the future. As we implement our strategy, we are becoming a multi-energy company that delivers cleaner and cleaner to our consumers. energy solutions.

We reduce emissions from our operations and our consumers transition to cleaner, more competitive energy. Our energy transition plans cover all our businesses:

Today, approximately 70% of our money comes from our Integrated Gas and Upstream businesses, with the remaining 30% generated through our Downstream, Renewables and Energy Solutions businesses.

The opposite is true for emissions. Around 75% of Shell’s emissions come from our renewable energy businesses and energy responses, and the vast majority are generated when our consumers use our products. The remaining emissions are generated in the embodied fuel and upstream sectors, with a giant component also coming from the use of our products through our consumers. Across our businesses, more than 90% of our emissions are reported in Scope 3.

Shell will reduce emissions over time as our product diversity evolves to meet growing visitor demand. We will continue to produce LNG and oil with lower emissions, while our overall sales will be more geared towards low-carbon responses, such as biofuels, renewables and hydrogen. and moving away from petroleum products such as gasoline, diesel, and jet fuel toward the market.

[A] Proportion of electrical products sold, aggregated on an energy basis (lowest calorific value) in final energy equivalents. [B] Petroleum products come with fuel-to-liquids (GTL).

Increasing our world-leading LNG with lower carbon intensity

We plan to grow our LNG business by 20% to 30% through 2030 compared to 2022. We are introducing new projects with lower carbon intensity renewable energy and carbon relief technologies in the form of carbon capture and storage. Beyond our own production, we will continue to add scale and flexibility to our portfolio by purchasing third-party LNG.

Our LNG business will continue to be a key precedent for Shell as demand continues to be strong, in Asia, where we now ship the bulk of our shipments. As we grow our LNG business, we will target opportunities that have an internal rate of return of 11%. Or more.

Source: Shell Analysis

LNG is also a fuel in the energy transition. It is the lowest-carbon fossil fuel and generates about 50% less carbon emissions than coal when used to generate electricity, according to the International Energy Agency.

Compared to coal, LNG emits much lower amounts of sulfur dioxide, nitrogen oxide, and other compounds that contribute to local air pollution.

Source: U. S. Department of Energy’s Enerfy National Technology Laboratory. U. S. Airport, 2015

There are many opportunities for industries to reduce their carbon emissions by switching from coal to plant-based fuels and LNG. Coal accounts for more than 60% of the power used in Asia to power heavy industries such as steel.

LNG is the lowest carbon marine fuel available at existing scale and offers significant discounts on greenhouse fuel (GHG) emissions compared to traditional fuels. LNG also offers a long-term decarbonization pathway through bioLNG when sourcing increases. Shell has developed the world’s largest network of LNG ports and refueling vessels on primary industry routes, enabling more consumers to switch to LNG.

To reap the full GHG benefits of LNG, it will be necessary to minimize methane emissions. We work with partners, industry, and academia to expand and implement technologies that reduce methane emissions related to the use of LNG.

Reducing methane emissionsMethane emissions from plant fuels and LNG contribute to global warming. Methane is a potent GHG and reducing methane emissions is seen as one of the most effective short-term moves to meet the Paris Summit’s more ambitious 1. 5°C target. Agreement at your fingertips.

As we grow our LNG business, we continue to make reducing methane emissions a priority. We were one of the first corporations to set a goal of reaching near-zero methane emissions by 2030 across our operations. Through our new, more effective plants and plans to reduce methane emissions from existing assets and our marine fleet, we aim to deliver LNG with some of the lowest methane emissions in our industry.

We have improved the accuracy of our reported emissions by implementing the United Nations Environment Programme’s (UNEP) Oil and Gas Methane Partnership (OGMP) Reporting Framework 2. 0 across our operated and non-operated assets. In 2023, Shell gained popularity from UNEP for being on track to meet the OGMP 2. 0 benchmark for reporting on its operating assets until the end of 2023 and on its non-operating assets until 2025. This would be the third year in a row that Shell has achieved this.

Working with others

Shell is a signatory to the Oil and Gas Decarbonisation Charter presented at COP28, which focuses on scope 1 and 2 emissions, flaring and methane emissions.

We are leading the way in advancing the Mthane Guiding Principles Coalition, which brings together industry and civil society to drive relief from methane emissions from the herbal fuel source chain. Signatories to the Methane Guidelines interact with governments and industry in 20 countries to inform policy. and regulations and disseminate practices.

We are members of the Petroleum

The role of LNG in the energy transition

Supporting renewables: The use of LNG for power generation provides flexibility and the ability to increase or decrease production. LNG will be key to maintaining grid capacity as the share of renewables increases.

Reduce air pollutants: Gas-fired power generation can particularly reduce air pollutants compared to emissions from coal-fired power plants.

Source: Kpler Shell interpretation, S data

Energy security: While the replacement of coal with renewables is expected to dominate the electric power sector, fuel and LNG will also play a role. They will continue to provide the flexibility that power grids and security will need in the coming decades in evolved countries. Countries.

Climate policy and emissions trading: In regions with strict climate policies and emissions trading schemes, such as the European Union, fuel and LNG can meet emissions targets by displacing more carbon-intensive fuels.

Low-carbon fuel for shipping: In some shipping sectors that take longer to reduce their emissions, such as long-haul road shipping and shipping, LNG can help them on their journey to decarbonization. It is a solution that is available and more affordable today compared to other low-carbon products, and it reduces emissions compared to petroleum-based products.

Source: U. S. Energy Information Administration. U. S.

Advantageous upstream

Reduce emissions from oil and fuel production by keeping oil production stable.

We continue to focus on more prices and lower emissions, and expect our oil production to remain strong through 2030. The oil we produce will come from our world-class deepwater business. Through state-of-the-art designs, our deep-sea rigs produce higher-margin, low-carbon barrels.

Across our upstream portfolio, we aim for an internal rate of return of 15% or more. We anticipate any inflows of new border exploration after 2025 [A].

From the beginning of 2023 to the end of 2025, we will have projects with a global peak production of more than 500,000 barrels of oil equivalent per day. Approximately 40% of these projects are located in deep waters. These include the Gulf of Mexico in the United States, where we are the largest oil producer and have one of the lowest GHG intensities in the world for oil production.

As we continue to meet global demand, we will build on the strengths of our existing portfolio to continue delivering low-carbon barrels with higher margins.

[A] Peer diversity includes BP, TotalEnergies, ExxonMobil, Chevron and constitutes all incorporated and upstream fuel businesses. Based on external reports and internal Shell research, aggregating peer current capital assumptions. [B] Shell’s internal investigation into Woodmac Lens data. Shell Deep Water includes both deepwater and ultra-deepwater positions. The pairs are giants and mid-caps and make up all embedded and upstream fuel activities.

We are moving toward our goal of weaning off regime flaring of our upstream operations by 2025, five years ahead of the World Bank initiative. Routine flaring burns fuel that is not used or re-injected into wells, which is inefficient and contributes to the climate. change.

Differentiated solutions downstream, renewables and energy

Transform our businesses to deliver more low-carbon responses while reducing sales of petroleum products.

We are reshaping our renewable energy and energy response businesses with a more geographically oriented product portfolio to deliver more prices with lower emissions. Our goal is to be a leader in the energy transition in spaces where we have competitive advantages, where we see strong visitors. We call for and identify transparent regulations by governments.

In the transportation sector, for example, we see attractive expansion opportunities in electric vehicle charging and biofuels for cars, trucks, planes, and ships. We are strengthening those activities for our consumers as they decarbonize and transition from petroleum products to low-carbon alternatives.

As the energy transition evolves, we expect the expansion of demand for petroleum products for transportation to slow and then decline. We are transforming our refinery portfolio and pricing over volume in our marketing activities. As a result, we will sell fewer petroleum products and more low-carbon products.

Ours is:

Focused on finding low-carbon answers for today and the future.

Today, we are repurposing our remaining incorporated refineries to concentrate on 4 regional chemical and energy parks, which we are transforming into the low-carbon hubs of the future. As a component of this process, we have completed the strategic review of our energy and Singapore energy. Chemical Park, with divestment being our preferred option. We are also our European energy and chemical parks. This means taking off some sets and proceeding with some divestitures that we have already announced.

We look to our global lubricants retail and marketing businesses to evolve as the energy transition evolves, responding to our consumers’ conversion desires and making value-based decisions, region after region. This means expanding our portfolio of low-carbon fuels and charging electric cars in markets that meet our investment criteria, such as China, Europe and the United States, and cutting our presence in others. For example, we signed an agreement to sell our stake in Shell Pakistan.

Oil for lubricants and chemicals.

Most of the petroleum products sold through Shell are used in the shipping sector. We estimate that between 15 and 20% of the total petroleum products we sell are used for non-energy products, such as lubricants and chemicals. Chemicals are used in many trendy spaces. from cosmetics to familiar items. Lubricants are necessary for virtually every machine and engine in operation. Because those products burn, their use results in Scope 3, Category 11 emissions. In 2023, Shell invested $2. 3 billion in the production of clean lubricants. -Energy products, lubricant additives, chemicals, convenience stores, agriculture and forestry, structures and roads.

Sourcing, logistics and industry all play a role in ensuring that we meet our customers’ wishes and generate strong returns. Our world-leading trading and optimization business further drives prices by connecting traditional and low-carbon fuel sources and demands across our global business. We will continue to grow our low-carbon molecules, carbon credits, and electric power business as the energy transition accelerates.

Building for Tomorrow (2025)

To build the businesses of tomorrow, we continue to strengthen our low-carbon responses by providing where we see a significant increase in visitor demand and supportive government policies. By 2030, we are focusing on 3 spaces where we have the perspective of definitely having an effect on the energy transition by reducing prices for our visitors: electric vehicle charging, biofuels and embodied energy.

Electric Vehicle Charging

We are focusing on public charging instead of household charging because we, our consumers, are the ones who want it most. We have a main competitive merit in terms of location, as our global network of service stations is one of the largest in the world. We have other competitive merits, such as our convenience retail store offering that allows us to offer our consumers coffee, food, and other convenience items while rating their cars. As we grow our EV charging business, we expect an internal rate of return. 12% or more.

Biofuels

We are developing our business as a global leader in biofuels to meet growing visitor demand and where we can use the strength of our supply and advertising positions. Aviation and shipping remain among the slowest sectors to decarbonise and will require low-carbon molecular responses, such as biofuels and hydrogen-based fuels in the future.

Shell is already one of the world’s largest investors in energy and biofuel blenders, promoting more low-carbon fuels than we produce. We plan to continue to increase our own production and sales of biofuels in the coming years.

Through our Raízen joint venture in Brazil, we are already the largest manufacturer of second-generation ethanol and the largest manufacturer of sugarcane ethanol in the world. To meet the next demand for biofuels in this decade, we are developing more second-generation technologies. . We are also developing technologies and feedstocks that aim to enable a continued and sustainable expansion of biofuels while minimizing the effects on the environment and food supply.

Following the acquisition in 2023 of Nature Energy, one of Europe’s largest manufacturers of RNG, we have a strong position in GNR. We are actively looking for more opportunities to meet the emerging demand for RNG, especially in Northwest Europe. We expect to generate an internal rate of return of more than 12% from our new investments in low-carbon fuels.

Built-in supply

We will continue to expand our embodied energy business with selective investments in renewable energy generation. We will also use the strength of our business and optimization functions to meet the growing need for flexible power garage solutions, such as batteries. We already have a significant presence in the battery and workshop sector through our business program and investments in studies and expansion.

Over time, we will also use our renewable force functions to produce low-carbon molecules, such as hydrogen. We expect force generation returns to be in line with the market, at around 6-8% without leverage, with opportunities to create superior returns in areas such as trading and optimization.

[A] Power generation from open-cycle and gas-combined cycle fuel turbines. Source: McKinsey Energy Solutions Global Energy Perspective 2023.

Preparing for the long haul (2030)

This decade, we are also focusing on the progression of embodied energy hubs, some carbon capture and removal activities, such as CCS, and fuels of the future, such as hydrogen, to prepare to meet the desires of our consumers post-2030.

We are investigating the progression of fuels such as liquefied artificial fuel (LSG), which is produced when renewable hydrogen is combined with captured carbon dioxide (CO2) to create plant fuel, which is then liquefied. This low-carbon fuel can be used in existing fuel infrastructure and networks, adding LNG plants.

Carbon & Removal

We are developing technologies similar to carbon capture and storage (CCS) and carbon removal, which are necessary for emissions where there are few low-carbon alternatives. For the remainder of this decade, we will direct the maximum of our CCS investments towards the decarbonization of our owned operations.

We must also make it a successful business for Shell by helping other corporations decarbonise their operations in the future. However, in many countries, CCS still lacks a transparent economic model. To address this challenge, Shell is advocating for policy mechanisms that enable CCS. and supports industry associations committed to the expansion of commercially viable CCS projects.

Combined with carbon capture and removal technologies, a functioning global carbon market will be a key enabler in accelerating the energy transition. We actively participate in carbon markets and build and manage a diversified portfolio of high-quality carbon credits, adding nature-based and non-nature-based solutions, for our clients to decarbonize.

Our transition plans for all of our businesses.

Leader in gasoline

Advantageous upstream

Specific decarbonization pathwaysWe know pathways to net zero for our two most important visitor sectors, transport and industry. These two sectors now account for more than 70% of global final energy demand and more than 55% of global carbon emissions. Our journeys are grounded in spaces where we have the competitive benefits necessary to offer our consumers the affordable productions they want during the transition.

Road Passenger Transport: By 2030: Petroleum Products, Biofuels and Refueling

Between 2030 and 2040: pricing, responses of biofuels and petroleum products

From 2040: cargo and petroleum products

From the mid-2030s: biofuels, electric charging, petroleum and green hydrogen solutions

Aviation: By the end of the 2030s: Petroleum derivatives, biofuels and fuels

Since the Late 2030s: Biofuels, Fuels and Petroleum Products Solutions

Marine: Mid-2030s: petroleum products, liquefied vegetable fuels, and biofuel solutions.

Industry & Services: Route 1: Mid-2030s: Liquefied Natural Gas with Carbon Capture and Storage and Renewable Natural Gas. From the mid-2030s: liquefied plant fuel with carbon capture and storage, renewable plant fuel, and hydrogen and derivatives.

Route 2: Between 2030 and 2040: Blue hydrogen. From 2040: blue hydrogen and hydrogen

Track 3: Direct Electrification, Batteries and Flexible Storage

Carbon Relief and Removal: Until 2030: Nature-Based Responses and Carbon Capture and Storage

Note: The order of elements in the adventure segments above indicates their most likely relative importance in that segment of that adventure. There remains significant uncertainty about the shape of those long-term trajectories.

Towards our strategic decarbonisation spaces for this decadeElectric Vehicle Charging

Biofuels Infrastructure

Built-in Positions

Made imaginable through our strengths and competitive advantages.

Business Capabilities and Infrastructure Networks

Technology & Innovation

Policy & Advocacy

Putting our into action in everything we do.

Our ideals on the energy transition reflect our strategy to deliver more prices with lower emissions. Our strategy is based on spaces where Shell has unique competitive advantages, allowing us to be a successful business in the energy transition.

Growing our world-leading LNG business with lower carbon intensity As we grow our world-leading liquefied vegetable fuels (LNG) business by 20% to 30% through 2030, we will continue to grow the carbon intensity of our operations.

Our LNG joint venture in Canada (Shell’s 40% stake, not in operation) will use vegetable fuel and renewable electric power to reduce plant emissions by more than one-third of the world’s maximum effective amenities when it starts. The commissioning procedure is expected to begin in 2024 and continue until 2025.

Through carbon capture and storage, those projects will help deliver LNG with a lower carbon footprint to our customers. Shell’s steady share of those projects will be around 3. 5 million tonnes per annum (mtpa) of LNG when production begins later this decade.

Shell is collaborating with shipping corporations to decarbonise the maritime sector. A part of the maritime sector uses LNG to force some of its ships, with the aim of switching to liquefied biomethane or liquefied e-methane, a hydrogen-based fuel, in the long term. .

Artificial Intelligence for LNG

Artificial intelligence (AI) is helping us reduce carbon emissions in LNG plants through sensor data to calculate the maximum effective parameters for equipment. At an LNG facility, we estimate that those technological advances reduce carbon dioxide emissions by approximately 340,000 tons per year. have used those automation and optimization technologies to reduce emissions from several LNG facilities.

We continued to report our methane emissions accurately and reduced emissions resources across all of Shell’s operated assets. By the end of 2023, approximately 80% of the fugitive emissions resources of our operated oil, fuel and LNG production facilities employed leak detection and repair. systems to combat leaks and monitor equipment.

Shell is partnering with others to share knowledge and drive industry-wide action on methane operations. We are one of the founding signatories of the Oil and Gas Partnership (OGMP) Reporting Framework 2. 0 and have implemented this framework across all of our operated and non-operated companies. active, engaging with our non-operating joint venture partners to achieve improved accuracy or reporting beyond our operations.

We use generation to monitor our emissions. In 2023, we effectively completed a pilot mission with GHGSat, a pioneer in methane detection, on the functions of satellites to monitor methane emissions from offshore facilities. The purpose is to get more out of this generation. widely in the future.

We also use drones and satellites to monitor methane emitted in the production and processing of vegetable fuel, as well as in the export of LNG. This has helped us decrease well maintenance periods and conscientiously control the dryness of fuel processing to restrict ventilation. We have reduced methane emissions at our QGC business in Queensland by more than 2,800 tonnes since 2017.

Reducing oil and fuel emissions in our upstream business

Across our upstream operations, we are cutting emissions from oil and fuel production to meet our targets, which are among the most ambitious in our industry. Reducing operational emissions is a key aspect in moving new projects forward.

Our Vito deepwater platform (Shell’s 63. 1% stake) in the Gulf of Mexico is one of our newest platforms and has a maximum production of 100,000 barrels of oil per day. The platform is expected to reduce carbon dioxide (CO2) emissions by approximately 80% over its constant domestic lifetime, compared to its original design. In addition to reducing emissions, the Vito also costs 70% less than the expected cost of the original design, an example of how to generate more costs with fewer emissions.

Vito’s design is replicated on two other deep-sea platforms in the Gulf of Mexico: Whale and Sparta. The Whale project, operated by Shell (60% Shell stake), is expected to start production by the end of 2024 and is expected to operate with fewer emissions than Vito. A final investment decision for the Sparta project (Shell’s 51% stake) was announced in December 2023, with production expected to start in 2028. Shell will leverage the expertise of the Vito and Whale projects to Sparta’s design and power capabilities.

Reducing the tightening of the regime

We are working to reduce regime flaring, which is inefficient and contributes to climate change. Our goal is to control regime flaring of our upstream operations until 2025 [A]. This commitment requires us to act faster than the World Bank’s Zero burn through 2030 initiative.

In 2023, about 10% of our greenhouse fuel emissions from burning occurred in facilities where there is no infrastructure to capture the fuel, a similar figure to 2022. Global flaring decreased to 2. 8 million tonnes of carbon dioxide equivalent (CO2e) in 2023. compared to 3 million tonnes of CO2 equivalent in 2022.

In Norway, Shell is the operator of the Ormen Lange fuel box (Shell has a 17. 8% stake). It is a subsea facility connected to Nyhamna, a land-based processing and export plant. Ormen Lange is powered by renewable hydropower provided through the Norwegian grid. This same renewable hydropower source supplies about 93% of the energy needed in Nyhamna. We are installing more subsea compressor assemblies to increase fuel recovery from the Ormen Lange box, which will also run on the same renewable hydropower.

Downstream, Renewables and Energy Solutions: more low-carbon solutions

We reduce emissions from our refineries by turning them into chemical and energy parks. This transformation is underway at Norco in the United States, Scotford in Canada, Pernis in the Netherlands and Rheinland in Germany.

In January 2024, we made the final decision to invest in converting the Wesseling hydrocracker in the Rhineland chemical and energy park into a Group III base oil production unit to produce high-quality engine and transmission oils. The conversion of this refinery is a vital step. Step forward to serve our developing lubricant visitor base with premium base oils, offering more prices with lower emissions. Wesseling will avoid processing crude oil into gasoline, jet fuel and diesel until 2025.

When operations begin in the second part of this decade, the plant will be highly electrified and Shell’s Scope 1 and 2 emissions are expected to reach around 620,000 tonnes per year. This is the latest breakthrough in the Rhineland’s transformation, which includes investments in a 10-megawatt electrolyzer to produce renewable hydrogen and a biomethane liquefaction plant.

Raízen, our joint venture in Brazil (Shell’s 44% stake), is one of the world’s largest producers of bioethanol and supplies some of the lowest carbon biofuels available today. The majority of ethanol and cellulosic ethanol produced through Raízen is sold raw to foreign consumers in markets such as Europe, Japan and the United States. It is used, among others, in the transport, pharmaceutical and production industries.

Raizen produced about 3. 12 billion liters of ethanol in 2023, up from about 3 billion in 2022. Raízen’s plant in Costa Pinto produced 30 million liters of second-generation ethanol made from non-edible agricultural waste in 2023, up from 26 million in 2022. In 2023, the joint venture also commissioned the first of eight complex biofuel plants it plans to build in Brazil.

In February 2023, we completed the acquisition of Nature Energy for approximately $2 billion, making us one of the largest manufacturers of renewable plant fuel (RNG) in Europe. GRN, produced by converting biological tissues, such as agricultural waste, into renewable energy, is a low-carbon fuel that can power trucks and ships. Together with our partners, Nature Energy owns and operates thirteen biofuel plants in Denmark and one plant in the Netherlands.

The biofuels plant at Shell Energy and Chemicals Park in Rotterdam, the Netherlands, is expected to be one of Europe’s largest nationally in the second half of the decade. It is expected to be able to produce 820,000 tonnes of biofuels from waste each year. One year. This facility will have the capacity to produce enough renewable diesel to avoid 2. 8 million tons of carbon emissions per year.

To increase our biofuel production capacity, we are also investing in new biofuel feedstocks. In 2022, Shell acquired waste recycling company EcoOils, which produces complex feedstocks for biofuels at its facilities in Malaysia and Indonesia. This will enable the production and supply of low-carbon fuels such as SAF to consumers. We also invested in the agroforestry company Investancia Group (30% stake in Shell) in 2022. Together, Shell and Investancia are using degraded farm animal land in Paraguay to plant pongamia oil trees to grow sustainable feedstocks to produce biofuels.

Low-carbon racing for Scuderia Ferrari

Shell has developed a second-generation racing fuel containing 10% bioethanol for Scuderia Ferrari to use in its Formula 1 race cars. We use numerical simulation to expect that the combustion habit and functionality of each fuel aggregate will particularly reduce progression time and optimize functionality. and efficiency. Lately, the team is running on a 100 percent sustainable racing fuel, which includes several other sustainable fuel components, to meet the demands of the 2026 Formula 1 season.

Electric Vehicle ChargingShell is well placed to be a successful leader in public EV charging, responding to the growing demand from drivers who want to charge on the go.

We opened our world’s largest EV charging station in China, the world’s largest EV market, in September 2023. The 258 fast-charging stations at Shenzhen Airport’s Shell EV charging station serve thousands of drivers every day. The charging stations are partially powered by rooftop solar panels, capable of generating 300,000 kilowatt hours of renewable electrical energy per year.

The charging station, a joint venture between Shell and Chinese electric car maker BYD (Shell’s 80% stake), has a usage rate two-and-a-half times higher than the local average. China is one of the fastest growing markets for our Mobility business.

In March 2023, we completed the acquisition of Volta Inc. We now have one of the largest public EV charging networks in the country, with more than 3,000 charging issues in 31 states and more than 3,400 additional charging issues in development.

Integrated Energy PositionsOur energy business combines our expertise in production, marketing and marketing. We are making selective investments in renewable energy generation, batteries, and other grid flexibility technologies, to provide low-carbon answers to our advertising and advertising clients, and to decarbonize. our own operations. Our goal is to deliver more renewable energy responses in a cost-effective manner, building our portfolio in select markets such as Australia, Europe, India and the United States.

In the U. S. , solar, wind, and battery company Savion, which we acquired in 2021, has new solar power plants. Once operational, they will produce approximately 500 megawatts (MW) of renewable energy.

We are also investing in expanding our renewable energy capacity elsewhere. In 2022 we acquired Sprng Energy in India and in 2023 Isemaren in Spain. We are also making progress on our own positions, such as our solar parks in Pottendijk and Koegorspolder in the Netherlands.

In the Netherlands, in 2023, the Hollandse Kust Noord offshore wind farm (79. 9% stake of Shell), with a production capacity of 759 MW, will come into operation. Hollandse Kust Noord will produce the equivalent of almost 3% of electricity demand. Ecowende (60% stake in Shell), our joint venture with Eneco, has announced plans to expand a nearby 760 MW wind farm called Hollandse Kust West.

We are also developing large-scale battery storage formulas in select markets. In March 2023, we partnered to supply a battery storage formula in Australia. Shell will have access to 100 percent of the battery formula reductions over a 20-year period. one-year period. The task is expected to be completed by the end of 2024.

To harness the full potential of hydrogen in terms of low carbon emissions, we continue to investigate where emissions can be produced and used by adding methane. We also identify opportunities to address them in collaboration with others. We see the role of hydrogen as a feedstock, for example. An example for the manufacture of artificial fuels and as an energy carrier in industry and transport.

By the end of 2022, we will build Holland Hydrogen 1 in the Netherlands, which will be one of the largest renewable hydrogen plants in Europe when operational in the second part of the decade. The two-hundred-MW electrolyzer will run on renewable energy. Hollandse Kust offshore wind farm (noord).

Holland Hydrogen 1 will decarbonise the production of our petrol, diesel and jet fuel at the Shell Energy and Chemicals Park in Rotterdam. In the long term, the plant could also supply hydrogen to reduce emissions from shipping and industry.

In Oman, we acquired a 35% stake in Green Energy Oman, which will produce hydrogen from seawater, powered by up to 25 GW of solar and wind power. Shell is the main partner in the alliance. The project is expected to be international until the beginning of the next decade and aims to produce approximately 1. 8 million tonnes of hydrogen per year at full capacity.

Carbon capture and storage (CCS) Shell continues to work with governments, consumers and partners to unlock the prospects for CCS and emissions where there are few low-carbon alternatives.

CCS technologies are necessary to meet the temperature goals of the Paris Agreement. However, in many countries, CCS has a transparent business model. To meet this challenge, Shell advocates for policy mechanisms and supports industry associations committed to the expansion of commercially viable technologies. CCS Projects.

By the end of 2023, the Quest CCS facility at the Scotford upgrader in Canada (Shell has a 10% stake) had safely captured and stored more than 8. 8 million tonnes of CO2 since its commissioning in 2015. We are looking at the option of expanding the CCS capacidad. de at Quest, first of all to 750,000 tons per year.

Our Northern Lights CCS allocation (Shell has a 33. 3% stake) in Norway signed contracts in 2023 to safely ship and store 1. 2 million tonnes of CO2 per year. The CO2 will be shipped from two Ørsted biomass power plants in Denmark and an ammonia and fertilizer plant in Yara. It will then be stored 2,600 meters below the seabed of the North Sea.

Construction of Porthos, Europe’s largest CCS facility, will begin in the Port of Rotterdam in 2024. Shell will be the largest customer, supplying 1 million tonnes of CO2 per year. The captured CO2 will be transported to empty fuel fields in the North Sea, about 20 kilometers off the Dutch coast. This will reduce the Netherlands’ annual CO2 emissions by around 2% over 15 years from 2026.

In 2023, Shell and Esso jointly obtained three licenses in the UK’s first-ever round of carbon storage licenses. The joint venture (with a 50% stake from Shell) will compare three sites in the North Sea for the storage of CO2 captured and transported from commercial facilities in the UK.

Also in 2023, Shell’s CANSOLV® carbon capture system won a tender for implementation at a CCS plant in Abu Dhabi, United Arab Emirates. The plant will permanently capture 1. 5 million tonnes of CO2 per year.

Direct Air Capture

Integrated Energy Centers

As a component of our energy transition approach, we are creating embedded energy hubs to reduce our own emissions and those of the products we sell. At our energy and chemical park in Rotterdam, the Netherlands, for example, we are integrating biofuels, hydrogen and CCS into our existing facilities.

We are building Holland Hydrogen 1, which will help decarbonise fuel production in the nearby chemical and energy park, once it is operational. The hydrogen plant will be powered by renewable energy from the Hollandse Kust offshore wind farm (noord).

Part of the energy hub’s emissions will be captured and stored in the North Sea through two CCS projects once they are operational. These are Porthos, of which we are the largest customer, and Aramis, a joint venture.

Holland Hydrogen 1Power: Hollandse Kusst wind farm (noord) – 759 MW for knowledge centers and Shell Holland Hydrogen 1 – two hundred MW

C02: Shell Energy and Chemicals Park Rotterdam to Aramis CCS – five mpta and Porthos CCS – 2. 5 mpta store

Hydrogen: from Shell Holland Hydrogen 1,200 MW to Shell

Carbon Credits Carbon credits can contribute to our goal of becoming a net-zero energy company. Shell and its consumers can use them to offset emissions according to the mitigation hierarchy of avoid, reduce and offset.

We carry out projects that are qualified according to independent and credible carbon credit standards. These come with the Verified Carbon Standard, the Gold Standard, and the American Carbon Registry. We do this to make sure that carbon credits are genuine and verifiable, and that issues like permanence, additionality, and leakage have already been addressed very well.

We also help expand and acquire carbon credits generated through other nature-based projects and technologies. We carefully study the credits we buy and withdraw from the market.

In 2023, Shell’s net carbon intensity (NCI) was 20 million carbon credits, of which four million were related to the sale of energy products. Of the 20 million tonnes of retired carbon credits included in Shell’s NCI measure for 2023, 85% were qualified through Verra, 9% through the U. S. Carbon Registry, and 85% were qualified through Verra, 9% through the U. S. Carbon Registry. 6% through the Gold Standard and less than 1% through Australian carbon credit units.

SAF Tracking with Blockchain

Avelia, a business style developed in partnership with Accenture and American Express Global Business Travel, uses blockchain for our clients to securely and transparently track the emissions discounts and environmental attributes of the sustainable aviation fuel they purchase, tracing it from production to delivery in aviation. networks.

Technology & InnovationBuilt on more than 125 years of technological innovation, the long-term functionality of our company is based on the successful progression, demonstration and advertising implementation of new technologies and products. In 2023, studies and progression of spending on projects that contributed to decarbonization approximately $628 million, compared to about $440 million in 2022. The 2023 figure represents approximately 49% of our total R&D spending, up from approximately 41% in 2022.

[A] Shell’s knowledge research published through comparable corporations (TotalEnergies, ExxonMobil, BP, and Chevron) in their annual reports, with the note that the definitions of R

Our portfolio of technologies and inventions is helping to deliver on Shell’s strategy by:

In our factory in Zhuhai, China, which produces lubricants and greases, we have established a thermal energy storage formula. This formula replaces diesel fuel with renewable electrical energy to generate the steam needed to make lubricants. The storage formula will optimize steam production. and is expected to reduce diesel consumption by three hundred tonnes and CO2 emissions by more than 900 tonnes per year. By demonstrating the benefits of this type of formula in a Shell facility, we can inspire and promote decarbonisation for our customers.

We invest in the latest energy technologies through our partnerships with leading startups and educational institutions. For example, we collaborate with Imperial College London in the United Kingdom to expand new technologies, with a focus on electric vehicles, lubricants, energy storage and CCS. and materials.

Driving industry investment

Shell Ventures invests in startups and giant corporations to electrify energy systems, decarbonize transportation, gain data-driven insights, and deliver cutting-edge answers to customers.

Shell Ventures is a partner of Norwegian company Corvus Energy, a leading provider of safe, innovative and reliable energy storage solutions for the maritime industry. The company’s battery storage systems upgrade diesel and fuel, reducing emissions. Storage tank systems are used on vessels in Shell’s operations in the Gulf of Mexico.

Climate Policy Commitment

Comprehensive, coherent and coherent policies are a very important component of the path to net zero. With the right political and regulatory conditions, we can profitably increase our investments through the energy transition. We advocate for robust policies, laws, and regulations in spaces where we can maximize the decarbonization of our customers and reduce our own emissions.

Our advocacy, directly with governments and through industry partnerships and coalitions, is a key component of our strategy. Shell collaborates on a variety of tactics with governments, regulators and policymakers to help shape policies, laws and regulations.

In the table below, we show how our advocacy focuses on four key spaces that are critical to the power transition and will help Shell’s strategy.

Policy & Advocacy

Promotion Topics:

A Achieve net-zero emissions Cross-sectoral policies that enable national net-zero ambitions to be achieved through comprehensive policy frameworks and carbon pricing, and that seek to ensure a just transition

C Driving Changing DemandPolicies that convert visitor demand into transportation and industry, such as automotive standards, sustainable aviation fuel mandates, and demand for low-carbon products.

□ Develop low-carbon responses Policies that inspire progress on low-carbon responses, adding incentives for biofuels, flexibility in feedstock selection, and effective regulatory frameworks for hydrogen and carbon capture and storage (CCS).

Learn more about our positions at Shell. com/advocacy-and-Política-actividad

Advocacy in action

In the United States, for example, we advocate for permits to be granted on a more temporary and barrier-free basis. Delays, caused in part by protracted litigation, have a negative effect on the delivery of tasks.

We believe that the reform of the permit formula will help move forward with new projects similar to the Infrastructure Investment and Employment Act and the Inflation Reduction Act. To achieve this reform, we have engaged constructively in legislative negotiations in the House of Representatives and the Senate. to promote bipartisan legislative solutions.

Within the EU, Shell advocates for policies that allow advertising to be invested in the energy transition, generating a demand for low-carbon solutions.

We enhanced the Fit for 55 package, which includes binding targets for the use of renewable hydrogen and complex biofuels. We improve policies to drive the electrification of road transport and frameworks that support the business case for carbon relief and removal.

In the Asia-Pacific region, Shell is working with local and national governments to expand policy and regulatory frameworks for CCS. The creation of cross-border CCS hubs in the region can lead to advantages for various industries in the region.

In 2024, it was decided that Shell and ExxonMobil would work with the Singapore government as leaders in developing a cross-border CCS project that could store at least 2. 5 million tonnes of carbon dioxide until 2030.

The transition of power in action

Selection of Portfolio Developments [A]

Our goal is to achieve a net-zero energy company by 2050.

This includes net-zero emissions from our operations, as well as net-zero emissions from the end-use of all electrical products we sell. In the short and medium term, we have set climate targets for emissions that we need to control. namely, our Scope 1 and 2 emissions, methane emissions, and flaring.

We have also set climate targets and ambitions for emissions that are beyond our control. These come with our Scope 3, Scope 11 consumer emissions ambition for the use of our petroleum products and our goal of net carbon intensity of all energy products. Sell.

Goals and ambitions

Emissions from our operations (Scope 1 & 2)

Halving the scope 1 and 2 emissions target up to 2030 [A] in operation (base year 2016)

ObjectiveEliminate the burn-out regime in upstream operations by 2025 [B]

TargetTo keep methane emissions intensity below 0. 2% and close to zero methane emissions by 2030

ObjectiveUpdated

Net Carbon Intensity (CCI) We introduced a rate of 15-20% towards our 2030 KIC aid target (base year 2016)

AmbitionNew

Petroleum ambition To reduce visitor emissions from the use of our oil by 15% to 20% by 2030, Scope 3, Category 11 [C] (base year 2021)

In October 2021, we set a goal of halving emissions from our operations (Scope 1), as well as the energy we purchase to run them (Scope 2), between 2030 and 2016 in net terms.

To decarbonize our operations, we are focusing on:

If necessary, we can use high-quality carbon credits to offset the remaining emissions from our operations, in accordance with the mitigation hierarchy of avoid, reduce and offset.

The chart below shows our progress since 2016 in reducing our scope 1 and 2 emissions and provides an indication of how we plan to meet our 2030 target. The movements we make to our purpose will depend on the evolution of our asset portfolio and the continuous progression. of carbon reduction technologies.

Working for our absolute Scope 1 and 2 emissions Scope 1 and 2 emissions in million tonnes consistent with years [A], [B]

Our direct GHG emissions (Scope 1, scope of operational control) decreased from 51 million tonnes of carbon dioxide (CO2e) in 2022 to 50 million tonnes of CO2 in 2023, due to several factors, including: divestments in 2022 (e. g. Deer Park and Mobile Refinery, Miskar concession in Tunisia, Baram Delta Operations (BDO) PSC and SK307 PSC block in the Philippines) and transfer of OML 11 operations to Nigeria in 2022; unplanned downtime (e. g. , Deer Park Chemicals); reduction of asset flaring, adding Shell Nigeria Exploration and Production Company (SNEPCo); Renewable electricity reduction and procurement activities. These decreases were partially offset by Shell Polymers Monaca having more equipment online in 2023 and higher emissions from our higher-producing Pearl fuel-to-liquids plant and Prelude floating liquefied herbal fuel facility.

Our 2023 Annual Report and Accounts provide more details on how we have reduced our Scope 1 and 2 emissions.

Methane emissions are in addition to those from unintentional leaks, ventilation, and incomplete combustion, such as from flares and turbines. Our target to keep methane emissions intensity below 0. 2% continued to be met in 2023. Shell’s overall methane emissions intensity was 0. 05% during marketed fuel services and 0. 001% for non-fueled traded services. Our methane emissions are quantified according to the industry’s most productive practices. This target covers all oil and fuel assets operated through Shell in our embedded and upstream fuel businesses.

Methane emission intensity [A], [D]

We are working to reduce burning, which is inefficient and contributes to climate change. Routine fuel burning occurs during general oil production when it is not imaginable to use the fuel or re-inject it into the well. In 2021, we extended our goal to eliminate gas flaring from our upstream operations through 2025[A] instead of 2030. This accelerates our 2015 commitment to end gas flaring as a signatory to the World Bank’s Routine Zero Flaring initiative by 2030.

Total regime flaring of our oil and fuel assets remained robust in 2023 compared to 2022 at 0. 1 million tonnes, following a reduction of 1. 1 million tonnes in 2016.

Approximately 50% of the total existing and non-routine flaring in our onboarded and upstream fuel services in 2023 was performed at assets operated through SPDC and Shell Nigeria Exploration and Production Company (SNEPCo). On January 16, 2024, Shell entered into an agreement to sell SPDC to a consortium of five companies, subject to approval through the Federal Government of Nigeria and conditions.

The intended use of NCI’s measure is to track progress in reducing the overall carbon intensity of electrical products sold through Shell. Net carbon intensity measures emissions related to the unit of energy we sell, compared to a 2016 baseline. It reflects adjustments in ventas. de petroleum products and fuels, as well as adjustments in sales of low-carbon or carbon-free products, such as biofuels, hydrogen, and renewable electricity.

Unlike scope 1 and 2 emissions, reducing the net carbon intensity of the products we sell requires action from Shell and our customers, along with engagement from governments and policymakers, to create the right situations for change.

Our focus on spaces where we can raise the price cap has led to a strategic shift in our energy business. We plan to expand our embedded energy business, adding renewables, in countries such as Australia, Europe, India, and the United States. we have withdrawn from the supply of energy directly to families in Europe because we do not do so. That’s where our strength lies.

In line with our preference to prioritize price over volume in the energy sector, we focus on specific markets and segments. One example is our focus on advertising consumers rather than retail consumers. Given this focus on price, we expect an overall expansion of electric power sales. until 2030 it will be lower than expected in the past. This led to an update to our net carbon intensity target. We are now aiming for a 15-20% relief through 2030 in the net carbon intensity of the energy products we sell, by comparison. through 2016, compared to our previous target of 20% relief.

The main reason for the reduction in our net carbon intensity is the increase in sales and demand for low-carbon energy. The chart on the next page illustrates how adjustments in product volume and sales can lead to net carbon discounts. intensity until 2030.

The evolution of our sales of those products will also reflect the progression and adoption of new technologies and infrastructure, as well as the adoption of public policies designed to inspire the energy transition.

In 2023, Shell’s NCI is 74 grams of carbon dioxide equivalent per megajoule of energy (gCO2e/MJ), a low of 2. 6% from last year and a 6. 3% relief from 2016, the base year. The minimum in Shell’s NCI in 2023 This is basically achieved through a relief in the average intensity of electricity sold and the use of carbon credits. The relief in the intensity of electricity is basically due to progress in the decarbonization of the grid in key markets such as the United States and Europe, and in component due to higher sales of renewable energy, in addition to the withdrawal of renewable energy certificates.

Working with our Net Carbon Intensity (NCI)NCI to gCO2e/MJ [A]

Ambition in the face of visitor emissions from the use of our petroleum products

We have set ourselves a new ambition: to reduce our customers’ emissions from the use of our petroleum products by 15% to 20% between 2030 and 2021 (Scope 3, Scope 11). This is more than 40% of the emissions reported in 2016. . [A] This point of ambition is in line with the European Union’s climate targets in the maritime sector, which are among the most progressive in the world.

Achieving this ambition will require cutting sales of petroleum products, such as petrol and diesel, as our consumers move forward in their transition to electric mobility and low-carbon fuels, adding natural gas, LNG and biofuels.

[A] Customer emissions from the use of our petroleum products (Scope 3, Scope 11) were 517 million tonnes of carbon dioxide equivalent (CO2e) in 2023, 569 million tonnes of CO2 equivalent in 2021 and 819 million tonnes of CO2 equivalent in 2016. Of the 40% relief through 2030, approximately 8 percentage issuances are similar to relevant volumes with additional contracts classified as held for trading, which will have an effect on reported volumes from 2020 onwards.

Paris line-up

The Paris Agreement aims at the global reaction to climate change risk by “keeping the global average temperature rise well below 2°C above pre-industrial degrees and pursuing efforts to limit the temperature increase to 1. 5°C above pre-industrial degrees. “industrial grades. ” -industrial grades. “

Shell supports the Paris Agreement’s more ambitious goal of restricting the rise in global average temperature this century to 1. 5°C above pre-industrial levels.

There is no popular set to align an energy supplier’s decarbonisation goals and ambitions with the Paris Agreement’s 1. 5°C temperature target. For this reason, we set our net carbon intensity target on 1. 5°C scenarios developed for the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6).

We believe that following this path to set our targets demonstrates that they are aligned with the Paris Agreement’s more ambitious 1. 5°C target. This is illustrated in the chart below.

Learn more about our shell. com/sustainability/our-climate-target/our-climate-target-faqs

Shell 0 until 2050

We are committed to achieving our purpose of being a net-zero energy company by 2050.

Critical points on the road to 0 The scale of the energy transition demands a fundamental shift in both source and demand. Achieving this will require supportive government policies, technological advancements, and investment through businesses in all sectors of the economy.

We advocate for policies, laws, and regulations in spaces where we can maximize our customers’ decarbonization, reduce our own emissions, and help drive the energy transition.

To help drive demand, we are investing in the development of low-carbon solutions to make them an affordable option for our customers. Through partnerships with leading startups and educational institutions, we’re also helping to expand technologies for the long term. execution that will be key to achieving net zero, such as direct air capture, renewable hydrogen, and garage heat and force responses.

Multi-energy company There is still significant uncertainty about the shape of the electricity system in the long term. As a result, we are building a multi-energy portfolio that has the flexibility to respond to uncertainty and that will allow us to remain a successful business. and net zero.

At the same time, we will have focused our oil and fuel activities on projects with higher margins and lower carbon emissions, while also combining those projects with additional carbon capture and emissions storage.

In addition to our energy sales, a critical component of our long-term business will be to help our consumers decarbonize in sectors where we have competitive advantages, by adding carbon capture and storage, or carbon to make low-carbon products like hydrogen.

While the path to net-zero emissions presents significant challenges, it also presents many opportunities. With the steps we’re taking today, we’re positioning Shell to deliver more with lower emissions, while transforming into a net-zero energy company.

Share of the world’s number one energy mix (%)

Just transition and governance

A Just Transition

A successful energy transition does not depend only on monetary investments and technological advances. It will also need to be a just transition, which means a fairer distribution of the prices and benefits of the global transition to a net-zero emissions energy system.

Today, an estimated 675 million people are without electricity and 2. 3 billion have no cooking facilities, according to the United Nations Department of Economic and Social Affairs.

Shell has pledged $200 million as part of a broader initiative to help people get electricity in the short and medium term. The initiative aims to help millions of people in underserved communities in sub-Saharan Africa, India, and Southeast Asia with electricity and better cooking. conditions.

As more and more jobs are created in the renewable energy sector, staff must be given the opportunity to acquire new skills. This requires strong debate and collaboration between governments, businesses and staff.

Our aim is to help a further 15,000 people in the UK find employment in the energy transition by 2035. Shell, in combination with its partners, is supporting the creation of two Energy Transition Competence Centres in Scotland and one in Wales. Scheduled for 2024 and 2025, they aim to equip others with the skills of the future, such as wind turbine maintenance and heat pump installation.

We use our existing structures to broaden social debate with workers, workers’ representative bodies, applicable local government agencies, and communities to address the social facets of the transition of power and advance human and labor rights.

Equal OpportunityEqual opportunities for historically underrepresented teams in the energy sector is a vital component of a just transition. Shell has set itself the ambition to be one of the most diverse and inclusive organisations in the world. This is embedded in our corporate strategy and applies to everyone. spaces of our business. We are currently prioritizing four spaces: gender, race and ethnicity, inclusion and empowerment of LGBT people and people with disabilities.

CommunitiesAt our wind and solar farm in Pottendijk, the Netherlands, opened in 2023, we share the profits of the renewable energy we produce. Over the next 16 years, we plan to contribute about $2 million to a network fund, which the Emmen Township will use as it sees fit.

In Nigeria, the investment corporation All On, funded by Shell, agreed to invest $11 million in 25 mini-grid projects across the country. The corporation plans to supply solar power to communities that need it most.

Learn more about our shell. com/justtransition

Climate Governance

Our governance framework is designed to deliver well on the energy transition ambitions and goals of our Powering Progress strategy, which aims to generate more with fewer emissions. The Board regularly reviews our energy transition strategy and oversees its implementation and execution.

In 2023, the Board discussed similar climate issues that year, adding the assessment of similar climate threats and the effectiveness of similar threat control activities. The Commission also questioned and approved the business plans, adding attention to primary capital expenditures, acquisitions and divestitures.

Carbon Management Framework (CMF)

We use various processes within our organization so that control groups can monitor and manage climate-related issues, adding up to the achievement of the Group’s carbon targets. These processes are supported through a combination of carbon control criteria in projects, business expansion forums where decisions are made, and capacity progression programs are scheduled.

To help achieve carbon targets in the 2023 national plan cycle, our net carbon intensity targets have been translated into absolute net emissions budgets for each company. This has made it possible to make trade-offs within those budgets between carbon emissions and shareholder price generation. We also use carbon metrics (profitability consistent with the unit of carbon emitted) in decision-making when comparing other expansion opportunities that are opposed to each other.

For the 2024 LTIP and PSP awards, the functionality condition “Shell’s journey through the energy transition” maintains the same weighting as in 2023. The extent to which the rewards will be earned will be based on an overall assessment of the progress made in reducing emissions from our operations and supporting our consumers with their emissions. This will build on our quest towards net-zero targets for our own operations of:

We will make progress towards 15-20% relief in NCI through 2030 (2016 baseline) and 15-20% relief in visitor emissions from the use of our petroleum products through 2030 (2021 baseline) [A]. broader functionality to accelerate the transition of power, for example by demonstrating leadership and advocacy in setting standards, as well as any other important points.

In 2024, we adjusted the measurement of the energy transition in our annual dashboard in light of the update to our energy transition strategy. In doing so, we have continued to align with Shell’s strategic goal of creating a net-zero energy company by 2050. , supporting a balanced energy transition by responsibly sourcing the oil and fuel that others want today, while helping to build the country’s blank energy system. The metric ‘Shell’s Journey Through Power Transition’ in the Annual Bonuses Panel represents:

For more details, please refer to “Governance of opportunities and climate-related issues” in our 2023 Report and Annual Accounts.

Energy Transition and Advisory Voting

In 2022 and 2023, Shell also proposed a consultative vote on its progress in implementing its energy transition plans over the past year. Following consultations with institutional investors, we found that expectations around issues such as the inclusion of an absolute Scope 3 target influenced the vote. decisions of many investors, than the situation report itself.

As a result, in the future, the Energy Transition Progress Report will be part of the report and the annual accounts without a consultative vote, while the Energy Transition Strategy (this publication) will be updated and proposed for consultative voting at least every 3 years.

Climate Litigation

Climate Litigation

In the Netherlands, Shell welcomes a ruling by the District Court in The Hague ordering us to reduce global carbon emissions in scopes 1, 2 and 3 by up to a net 45% by 2030, compared to 2019 levels. The ordinance stipulates that rebates on scope 2 and 3 emissions must be made on the basis of “all possible efforts. “

We welcome this resolution because we do not believe that it is the right solution for the energy transition. By focusing on a single company and only on the energy source rather than demand, we believe the resolution is inefficient and even counterproductive in the fight against the climate. change.

It is unclear how Shell can be forced to reduce emissions it does not make from its customers, who are not subject to a similar legal responsibility to reduce their emissions. The court is also asking Shell to reduce its emissions much faster than the EU. which has one of the most ambitious trajectories in the world.

Shell believes that by working together and adopting effective government policies, the world can help redirect customer demand towards low-carbon products and expand the infrastructure and generation needed for the energy transition, while maintaining a secure and affordable energy supply. will be heard before the Dutch Court of Appeal in April 2024. Pending the final results of the appeal, Shell is taking active steps to comply with the decision.

Climate projects and criteria play a role in supporting Shell’s energy transition efforts.

They herald ongoing debate among stakeholders and highlight areas of progress opposed to externally established criteria.

Doing business in a transparent and open manner is a commitment we try to uphold and promote transparency wherever imaginable throughout our industry. We continue to inform ourselves through work to provide actionable data to key stakeholder groups. In doing so, we work with a number of stakeholders, including regulators, auditors, investors and non-governmental organisations.

Our strategy and progress in the energy transition, as well as our efforts to build transparency, are identified in environmental, social and governance (ESG) frameworks. Over the years, our functionality scores have improved, as evidenced by the assessment conducted through various external parties, adding the most recent research from the Carbon Tracker Initiative [A] highlighting Shell’s top production practices and key innovations in climate-related monetary disclosure.

The ISS Net Zero ESG Alignment Model assesses whether corporations have a credible decarbonization strategy, adding interim greenhouse fuel emissions targets and documented commitments to reach net zero by 2050. Shell is one of only 8 corporations in the oil and fuel sector to have achieved a global net 0. prestige “Lineup” in 2023.

Climate InitiativesTransition Pathway InitiativeThe Transition Pathway Initiative (TPI) is a global asset owner-led initiative that assesses companies’ readiness to transition to a low-carbon economy. TPI evaluates a company’s functionality and progress in the energy transition as opposed to what has been identified around the world. landmarks.

The TPI assessment is divided into two parts: control quality and carbon functionality. Quality control describes a company’s carbon control practices and governance, with a higher score indicating greater functionality. Carbon functionality scores imply that a company’s goals and plans are aligned in the short term (2025), medium term (2035), and long term (2050).

In terms of control quality, in 2023 we received a score of 4 (strategic assessment) for the control of our greenhouse fuel emissions and the similar dangers and opportunities to the transition to a low-carbon economy. This exceeds the average score of 3. 2 for all companies assessed in the oil and fuels sector (90).

Climate Action One Hundred is an investor-led initiative that drives corporate action on climate change and represents investors with approximately $68 trillion in assets.

Its net-zero corporate benchmark evaluates companies that oppose three high-level targets set by investors: emissions reductions, governance, and climate-related disclosures. It tracks companies’ alignment with a long-term net-zero emissions and the Paris Agreement’s goal of limiting global temperature. at 1. 5°C.

The disclosure framework assesses the adequacy of corporate disclosure against key moves corporations can take to align with the goals of the Paris Agreement, and is assessed through the Transition Pathway Initiative. Shell’s latest effects are presented below, with data made public as of May 29. , 2023.

We are disappointed to see that our ratings deteriorated in some spaces in the last assessment, which is largely due to annual updates to the method used. We have strong governance and a commitment to transparency so investors can continue to benchmark our climate. strategy and compare our progress with other companies. We will continue our commitment to CA100 and TPI with the goal of ensuring that our existing goals and data are reflected in their baseline and we look forward to continuing the effects of their assessment.

Our climate-like monetary disclosures are consistent with all TCFD recommendations and disclosures. Please refer to our 2023 Report and Annual Accounts for more details. Shell’s disclosures similar to TCFD’s recommendations are presented in the “Our Journey to Net Zero Emissions” segment of the annual report.

Precaution

The corporations in which Shell plc has direct and indirect investments are separate legal entities. In this report, “Shell”, “Shell Group” and “Group” are used for convenience when references to Shell plc and its subsidiaries are infrequently made. Similarly, the words “we”, “us” and “our” are also infrequently used to refer to Shell plc and its subsidiaries or those who work for them. These terms are also used when it is not helpful to identify the specific entity(ies). “Subsidiaries”, “Shell Subsidiaries” and “Shell Companies”, as used in this report, refer to entities over which Shell plc exercises direct or indirect control. The terms “joint venture”, “joint ventures”, “partnerships” and “associated corporations” would possibly also be used to refer to an advertising arrangement in which Shell has a direct or indirect interest with one or more parties. The term “Shell Interest” is used for convenience to imply the direct and/or indirect interest held through Shell in an unincorporated entity or corporation, after excluding any third party interest.

Forward-Looking Statements This report includes forward-looking statements (within the meaning of the Private Securities Litigation Reform Act of 1995) relating to the monetary condition, effects of Shell’s business and operations. All advertisements that are not factually old are, or could possibly be considered, forward-looking advertisements. Long-term expectations are based on management’s existing expectations and assumptions and involve known and unknown threats and uncertainties that may also cause actual effects, functionalities or occasions to differ materially from those expressed. or implicit in those s. Forward-looking statements include, among other things, those relating to Shell’s prospective exposure to market position threats and those expressing management’s expectations, beliefs, estimates, forecasts, allocations and assumptions. These forecasts are known by the use of words and expressions such as “target”, “ambition”, “anticipate”, “believe”, “may also”, “estimate”, “expect”, “objectives”, “intend to “. “, “possibly”, “milestones”, “goals”, “perspectives”, “plan”, “probably”, “assignment”, “threats”, “schedule”, “seek”, “deserve”, “objective”. “, “will” and similar terms and expressions. There are a number of points that may also have effects on Shell’s long-term operations and cause those effects to differ materially from those expressed in the forward-looking statements included in this report. , including (but not limited to): (a) fluctuations in the value of crude oil and natural gas; (b) adjustments in demands for Shell products; (c) currency fluctuations; (d) drilling and production effects; (e) reserve estimates; (f) percentage loss of market position and industry competition; (g) environmental and physical threats; (h) threats related to the identification of suitable housing and potential acquisition targets, as well as the successful negotiation and final touch of such transactions; (i) the threat of doing business in emerging countries and subject to foreign sanctions; j) legislative, judicial, fiscal and regulatory developments, adding regulatory measures to fight climate change; k) economic and monetary market position situations in various countries and regions; (l) political threats, including threats of expropriation and renegotiation of the terms of contracts with government entities, delays or progress in the approval of allocations and delays in the reimbursement of percentage costs; (m) threats related to the impact of pandemics, such as the COVID-19 (coronavirus) outbreak, regional conflicts, such as the Russian invasion of Ukraine, and a general breach of cybersecurity; and (n) adjustments in business situations. There can be no assurance that long-term dividend bills will meet or exceed dividend bills. All forward-looking statements contained in this report are expressly qualified in their entirety by the caveats contained or referred to in this section. Readers deserve not to place undue reliance on forward-looking advertisements. Additional threat points that could possibly have long-term effects are contained in Shell plc’s Form 20-F for the year ended December 31, 2023 (available at shell. com/investors/news-and-filings/sec -filingsArrayhtml and sec. gov). Array These threat points also expressly qualify any prospects contained in this report and deserve to be considered by the reader. Each forward-looking statement speaks only as of the date of this report, March 14, 2024. Neither Shell plc nor any of its subsidiaries undertakes any legal responsibility to publicly update or revise any forward-looking statement as a result of new long-term events. of dataArray. or other data. Despite such threats, effects may also differ materially from those stated, implied or inferred from the forward-looking statements contained in this report.

Shell’s Net Target 0Shell’s operating plan, outlook and budgets are planned for a ten-year period and are updated annually. They reflect the existing economic environment and what we can expect over the next ten years. As a result, they reflect our Scope 1, Scope 2, and Net Carbon Intensity (NCI) targets for the next ten years. However, Shell’s operational plans cannot reflect our net-0 emissions target until 2050, as this target is already out of reach. Our era of making plans. Going forward, as the company moves towards net zero, we will expect Shell’s operational plans to reflect this move. However, if the company fails to reach net-0 emissions by 2050, there is now a significant threat that Shell will fail to reach this target.

Non-GAAP Forward-Looking Measures This report would likely involve certain non-GAAP forward-looking measures, such as [cash capital expenditures] and [divestitures]. We are unable to provide a reconciliation of those forward-looking non-GAAP measures to maximum comparable GAAP monetary measures, as some of the data necessary to reconcile those non-GAAP measures to maximum comparable GAAP monetary measures is based on long-term events, some of which are beyond Shell’s control, such as oil and fuel prices, interest rates and exchange rates. Moreover, estimating those GAAP measures accurately enough to provide a meaningful reconciliation is incredibly complicated and also cannot be achieved without unreasonable effort. Non-GAAP measures relating to long-term periods that are reconciled to the comparable GAAP monetary maximum The measure is calculated in a manner consistent with the accounting policies used in Shell plc’s consolidated monetary statements.

The content of what is discussed in this report is not part of this report.

We may have used certain terms, such as resources, in this report that the U. S. Securities and Exchange Commission (SEC) has not been able to replace. The U. S. Securities and Exchange Commission (SEC) strictly prohibits us from adding in our filings with the SEC. Investors are encouraged to carefully review the information contained in our Form 20-F. , Docket No. 1-32575, available on the SEC sec. gov website.

LEI Number: 21380068P1DRHMJ8KU70Published: March 14, 2024Classification: Additional Regulated Information Required to Be Disclosed Under UK Law