Shell’s latest environmental ambitions put it in a category of mainly European oil giants that have committed to becoming emissions neutral, but the details fall short of its closest rival, according to campaigners.
Shell unveiled details on Thursday, months after fellow FTSE 100 firm BP set out its path towards net zero.
The Shell plan includes too little investment in green energy and only a gradual decline in oil production, Greenpeace said.
“BP’s plan is to extract less oil and gas to hit climate targets and increase investment in renewables capacity; Shell’s is to let production dwindle gradually as the industry declines, and to rely on impossible levels of tree-planting, without green energy production,” said Mel Evans, head of Greenpeace UK’s oil campaign.
BP promised in August that by 2030 it will have slashed oil and gas production by 40% and it would stop exploring for hydrocarbons in any countries where it does not already operate.
But the firm also announced a major expansion of its liquid natural gas output by 2025.
Both businesses see hydrogen, a fuel that burns cleanly, as a significant part of their future. Shell said it wanted to reach a double-digit share of global clean hydrogen sales, while BP is aiming for a 10% share in core markets.
Hydrogen has the ability to be an important green fuel for long-haul transport, as battery-driven lorries are unlikely to be widespread in the near term, but while the fuel burns cleanly, most production of hydrogen uses fossil fuels.
By 2030 BP wants to be investing 5 billion dollars (£3.6 billion) a year in low-carbon technologies, up from 500 million dollars (£360 million) today, while Shell promised 2 to 3 billion dollars (£1.45 billion to £2.2 billion) for renewables and energy solutions in the near term.
Shell has a more asset-light model which does not aim to own as many renewable production sites, such as wind farms, as some of its rivals.
Its targets include not just emissions from the oil and gas it produces, but also the hydrocarbons it sells which is extracted by other firms. This would prevent Shell from reducing its emissions by simply selling an oil field only to buy back the oil from it.
The company hopes to have 15 million business and personal power customers by 2030, compared with one million today. Most of the power it supplies to them will be produced by other companies.
While parts of BP’s plans for its own business seem more ambitious than those of its rival, its 20% stake in Russian oil giant Rosneft is not included, leaving it open to criticism.
Rosneft is still controlled by the Kremlin, and has spoken out against the environmental ambitions of other oil companies.
In September the state oil company’s first vice president, Didier Casimiro, said that when oil majors withdraw from their core business “somebody will need to step in”.
“It is an existential threat for supply. It is an existential threat for price volatility… we will have a (supply) crunch, price volatility, and yes, higher prices,” he told the Financial Times Commodities Global Summit.
Ms Evans said: “The sticking point for BP is that it doesn’t include Rosneft in its net zero plan, and until it does, its plan won’t be good enough.
“The key takeaway is that turkeys will never vote for Christmas, and we need robust Government action to end new oil and gas licensing and invest heavily in renewables at scale and speed.
“The Government has a responsibility to achieve a smooth transition to renewables to help oil and gas workers to move to good green jobs and to deliver on our climate targets.”
While Shell, BP and their European rivals Eni, Total and Equinor have committed to net zero policies, US companies have lagged behind.
Only ConocoPhillips has announced a net zero target, leaving Chevron and Exxon behind.