Shell Stock Soars on its Commitment To Achieve Zero Carbon Footprints By 2050 

  • Apr 18, 2020 BST
  • Team Kalkine
Shell Stock Soars on its Commitment To Achieve Zero Carbon Footprints By 2050 

British-Dutch oil and gas company, Royal Dutch Shell Plc has initiated to turn itself into a net-zero carbon company by the year 2050. For this, the company is preparing to sell more green energy to support the reduction of carbon emission.

The Chief Executive Officer of the company, Ben van Beurden stated that the novel coronavirus crisis had impacted the health of society and economies around the globe. Despite the ongoing challenging situation, the company remains focused on achieving its long term objectives. He further said that the company would follow its objective, which is why, Royal Dutch Shell Plc is aiming to become a Net zero-emission company by the year 2050 or earlier (covering scope one, two and three emanations).

On 16 April 2020, the company announced three detail steps at Shell’s Responsible Investment Annual Briefing, which includes:

  • The company’s first determination is to convert itself into a net-zero carbon emission from the production of all its products in the coming 30 years or early.
  • Speed up the company’s Net Carbon initiative objective to bound the average temperature upswing to 1.5 degrees Celsius, which is also the purpose of the Paris Agreement on Climate Change. It signifies the reduction in the Net Carbon Footprint of the energy products by approximately 30 per cent till 2035 and almost 65 per cent till the year 2050.
  • Supporting clients and businesses to decrease the emissions by serving them zero emission energy products by the year 2050 or earlier.

Company’s plan to reduce its carbon footprints (source: company websites)

 

As per the media report, Royal Dutch Shell Plc along with BP Plc have confronted blames for not being serious about accomplishing the goals regarding Net Zero carbon. Refuting these criticisms, Royal shell has established a stronger 2035 plan to achieve its net-zero carbon objective, whereas BP Plc has yet not provided any target for the same. Many of the pension funds and more significant shareholders of climate change 100+ union have accepted Royal shell’s decision with full hands, considering it a substantial initiative in the positive direction for climate action.

The Chair to the ABP pension fund, Corien Wortmann-Kool stated that they are pleased about the decision as Royal shell’s regular assessments have supported its objective. After the declaration regarding net zero-emission in the year 2017 and 2018, the company set the bar high to other energy businesses to work for zero carbon emission. Wortmann-Kool further said that this decision would give a more significant positive impact in coming future.

As per the company’s annual briefing, it also highlighted some significant actions required for the European Union to reach Net Zero Carbon emission in the next thirty years. Some of these actions are as follows:

  • It has recommended to start using clean technology, i.e. doubling the use of electricity, considering 75 per cent of renewables in energy mix without coal; and start providing new fuels such as biofuels and hydrogen etc. 
  • Another action is regarding behavioural incentives which includes an increase in energy efficiency by approximately 45 per cent with per unit of gross domestic product, incentivize low carbon businesses and clients and lastly increase the government-led corban dioxide price to more than €200/tCO2e. 
  • In the final step the company talked about the requirement to eliminate carbon discharges, which requires the construction of minimum two significant Carbon Capture, Utilization, and Storage facilities each month and recreate minimum of 220,000 square kilometre forest to eliminate 300 million tons of carbon dioxide emissions. 

 

(Source: company website)

The oil giant, Royal Shell stated that the company would support its clients which includes leading airline companies to reduce the carbon emissions by using fossil fuels products which will be used in Jet Fuels by the year 2050. A Director on the Church of England Pensions Board, Adam Matthews appreciated the company’s decision to achieve net-zero carbon footprints for the aviation industry which derives the demand for energy.

Overview Of Royal Dutch Shell Plc

Royal Dutch Shell Plc (LON: RDSA) is a prominent petrochemical and energy company. The company owns expertise in production, exploration, marketing, and refining of the fossils fuels as well as manufacturing of the chemicals. The company is using innovative technologies and initiating pioneering methods to create a sustainable energy future with operations in more than 70 countries and around 86,000 work staffs.

Share price performance – RDSA   

(Source: Thomson Reuters)

On 17 April 2020, Royal Dutch Shell Plc’s stock last traded at GBX 1370.20, up 5.55 per cent or GBX 72.00 in a day trading session. The company’s stock achieved a one-year high price on 07 May 2019 at GBX 2,811.38 per share, whereas the stock recorded a one-year low price on 19 March 2020 at GBX 946.10 per share. 

As on 17 April 2020, the market capitalisation of RDSA was reported at EUR 122.10 billion, while its Beta stood at 1.09, reflecting higher volatility compared to benchmark index. 

Major Companies That Are Committed To Net Zero Carbon Emissions

In 2019, the world’s most carbon-producing companies announced their objective to achieve Net Zero emissions by the year 2050. Inter-governmental Panel on Climate Change has already said that the move is crucial to keep global warming to 1.5 degree Celsius and reduce many environmental impacts of climate change.

Below are the few companies which announced the commitment to net-zero emissions:

  • Duke Energy- Duke Energy is a power and utilities producer company of the United States. It announced its commitment to reduce carbons emission by the year 2050 in September 2019. The company had declared that a varied mix of renewables, natural gas, hydro, nuclear and energy efficiency would be the critical part of net-zero carbon future while new technologies and innovation would be at core in the longer-terms.  
  • Repsol– Repsol is a Span-based oil and gas company. In December 2019, the company also announced its aim to achieve net-zero emissions by 2050. Repsol’s commitment is of great importance as the company is into a scope 3 emission that includes the emission released from the oil and gas it sells. The company stated that its aims of increasing its production of biofuels, renewable energy portfolio and lastly chemical products of less carbon emission. 
  • HeidelbergCement– German-based, HeidelbergCement is the fourth-largest cement making company in the globe. The cement sector is also responsible for carbon emission, which accounts for approximately 7 per cent of international carbon emissions. According to the company, it will increase its use of alternative energy source, such as biofuel, and raw materials. The company has also committed to develop new technologies to reduce carbon emission by the year 2030. 

Disclaimer

The website has been prepared for informational purposes only and is not intended to be used as a complete source of information on any particular company. The above article is NOT a solicitation or recommendation to buy, sell or hold the stock of the company (or companies) under discussion. Kalkine does not in any way endorse or recommend individuals, products or services that may be discussed on this site.

 

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