Shell in 2022, invested $8.2 billion in low-carbon energy and non-energy products, around a third of our total cash capital expenditure of $25 billion. Of that, It invested $4.3 billion in low-carbon energy solutions, an increase of 89% compared with the previous year.
This includes capital spending on biofuels, hydrogen and charging for electric vehicles, as well as wind and solar power [ The remaining $3.9 billion was invested in non-energy products such as chemicals, lubricants and convenience retail, which do not produce emissions when they are used by our customers.
This was contained in Shell plc’s published Energy Transition Progress Report 2022 which is expected to be presented to shareholders for an advisory vote at Shell’s Annual General Meeting on May 23, 2023.
“In this report, we show the progress we have made towards becoming a net-zero emissions energy business by 2050, as we continue to supply the vital energy the world needs during a time of great volatility,” said Wael Sawan, Shell’s Chief Executive Officer. “I am especially proud of the progress we have made in reducing carbon emissions from our operations, with a 30% reduction by the end of 2022 compared with 2016 on a net basis.”
“ Our investment in non-energy products decreased by 9% compared with 2021.”
These investments advance a central part of our strategy which is to sell more products with low-carbon emissions to help both Shell and our customers meet their climate targets.
Two-thirds of our capital spending in 2022 was on maintaining supplies of the vital energy the world needs today. We invested $4.2 billion in liquefied natural gas (LNG) as well as gas and power marketing and trading, an increase of 17% compared with the previous year. We expect LNG will remain an important part of the energy mix for many years to come because of its role in reducing emissions from power generation and transport.
We also increased our investments in oil production and oil products by 30% to $12.5 billion. This includes investments of $8.1 billion in our Upstream business, helping maintain our assets and make up for the natural decline in oil and gas production. It also includes investments in refining and trading, as well as fuels marketing, which are important to maintain supplies of fuels for motorists, commercial road transport, aviation and industry.
By the end of 2022, the net carbon intensity of the energy products sold by Shell had also fallen by 3.8%, compared with 2016.
“Our analysis, using data from the International Energy Agency, shows the net carbon intensity of the global energy system fell by around 2% over that time.”
The report highlights important steps that Shell has taken to advance its energy transition strategy. These include significant investments in liquefied natural gas (LNG), which Shell expects to remain an important part of the energy mix for many years to come, partly because of its role in reducing emissions from power generation and transport.
Other steps include Shell’s $1.6 billion investment in Indian renewable power developer Spring Energy, and the final investment decision on the Holland Hydrogen 1 project in the Netherlands, which will be Europe’s largest renewable hydrogen plant.
In 2022, Shell also announced the acquisition of Denmark’s Nature Energy, which produces renewable natural gas, for around $2 billion. This deal was completed at the beginning of 2023.
Shell also increased the number of electric vehicle charge points it owned or operated worldwide by 62% to around 139,000 in 2022, up from 86,000 the previous year.
Sir Andrew Mackenzie, Shell Chair, said: “We believe the progress we have made in line with our energy transition strategy has been to the benefit of our customers, our shareholders and wider society.”
This progress comes at a time when the energy system still faces challenges as high energy prices continue to contribute to a cost-of-living crisis for many people. These challenges have highlighted the need for a balanced energy transition: one in which the world achieves net-zero emissions, while still providing a secure and affordable supply of energy.
Shell’s energy transition strategy was put to an advisory shareholder vote at its 2021 Annual General Meeting, where it secured 89% of the vote. At the 2022 AGM, almost 80% of shareholders who voted supported our progress in implementing this strategy.
This year, Shell is again asking shareholders to vote on its annual progress.