11th Feb 2021 09:03
(Alliance News) - Royal Dutch Shell PLC on Thursday set out plans to reach net zero carbon emissions by 2050, while at the same time shrinking debt and maintaining a "progressive dividend policy".
The Anglo-Dutch oil major said it wants to reduce net debt to USD65 billion. It also aims to "maintain the progressive dividend policy", planning payout growth of around 4% per year.
The company plans to transform itself, becoming a "provider of net-zero emissions energy products and services", which it says will be powered by growth from its customer-facing businesses.
"A disciplined cash allocation framework and rigorous approach to driving down carbon emissions will deliver value for shareholders, customers and wider society," Shell said.
Shell also confirmed its expectation that it expects total carbon emissions for the company to have peaked in 2018 at 1.7 gigatonnes per annum, while oil production peaked in 2019.
The company, which is based in The Hague, Netherlands, said it will continue with its short-term targets, driving down emissions as it approaches its 2050 target, which is linked to the remuneration of over 16,500 staff members.
By 2023, it aims to shrink net carbon intensity by between 6% and 8%, 20% by 2030, and 45% by 2035 before complete elimination on a net basis by 2050, using 2016 as a baseline.
Shell is seeking access to a further 25 million tonnes per year of carbon, capture and storage capacity by 2035. It also plans to use nature-based solutions in line with a philosophy of avoiding, reducing, and only then mitigating, in its goal to offset emissions of around 120 million tonnes a year by 2030.
Other targets include increasing adjusted earnings to around USD6 billion by 2025 from USD4.5 billion in 2020 through "improving the already market-leading position of the lubricants business" as well as increasing customers to 40 million at 55,000 retail sites from 30 million at 46,000 sites at present
Shell also seeks to grow its electric vehicle network to around 500,000 charge points by 2025 from 60,000 currently.
It also seeks to extend its biofuels production and distribution business and to sell around 560 terawatt hours a year of integrated power by 2030, double the current amount, becoming a leading clean power-as-a-service producer.
Chief Executive Ben van Beurden said: "We must give our customers the products and services they want and need – products that have the lowest environmental impact. At the same time, we will use our established strengths to build on our competitive portfolio as we make the transition to be a net-zero emissions business in step with society.
"Whether our customers are motorists, households or businesses, we will use our global scale and trusted brand to grow in markets where demand for cleaner products and services is strongest, delivering more predictable cash flows and generating higher returns."
The change follows similar moved by oil production peers. France's Total SE on Tuesday proposed to rename itself as TotalEnergies to reflect its planned transformation into a broad energy company, with production growth focused on liquefied natural gas and renewables. UK peer BP PLC also is hoping to be net zero on carbon emissions by 2050.
Shell A shares were down 1.0% at 1,349.40 pence on Thursday morning in London, while B shares were down 1.0% at 1,293.64p.
By Anna Farley; [email protected]
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