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Shell Scraps Its $100 Million-a-Year Carbon Offset Plan 175

Shell PLC has quietly abandoned its plan to spend $100 million a year on carbon credits, "which is the largest offset program among corporations," notes CarbonCredits.com. The move comes six months after its new CEO Wael Sawan took office. From the report: In June, Sawan announced a major shift in Shell's strategy -- to maintain its current level of oil production until 2030, not to reduce it as initially declared, while reducing costs and increasing shareholders profits. What the CEO missed to reveal at the time is the energy giant's plans for investing in carbon credit projects. These credits are part of Shell's offsetting program in line with its 2050 net zero emissions goal. Shell has made a commitment to cut Scope 1 and 2 emissions by 50% by 2030 and reach net zero by 2050. It managed to reduce total emissions from all scopes (Scope 1, 2, and 3) in 2022 compared to 2016 levels. A big part of the oil major's carbon reduction strategy is the use of carbon credits to offset emissions.

Originally, Shell aimed at spending $100 million each year on carbon offsets. The oil company also targeted to generate 120 million carbon credits yearly by 2030 from natural carbon sequestration projects. These targets would have offset about 10% of Shell's carbon emissions. But with the company's recent revelation, they confirmed that they're putting an end to those plans. However, the company hasn't revealed publicly any new plans for carbon credits or how they now intend to meet their climate targets. According to Shell, those prior goals weren't attainable due to the lack of carbon offsets that meet its quality standards. [...]

As what [Flora Ji, a 17-year Shell veteran confirmed], Shell's long-term approach to carbon reduction toward net zero follows the Science-Based Targets initiative. That means avoiding emissions first and reducing them before resorting to carbon offsets. If Shell stays loyal to its net zero pledge, it will still need carbon offsets eventually, according to BloombergNEF analysis. The Dutch energy giant will be needing the offset credits for the residual emissions on its way to net zero. Indeed, Shell is not totally abandoning its carbon offset efforts; only the $100M and 120M credit targets. And though it's prioritizing its short-term goal of maximizing profits, it has yet to disclose new plans for its long-term climate targets.
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Shell Scraps Its $100 Million-a-Year Carbon Offset Plan

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  • by Luckyo ( 1726890 ) on Friday September 01, 2023 @02:03AM (#63814073)

    "Offsets" in practice have been either about paying PRC to keep running Three Gorges Dam, or paying Turkey to run some wind power.

    It's a hilarious scam, aimed at buying indulgences for status purposes.

    • by Barny ( 103770 ) on Friday September 01, 2023 @02:09AM (#63814077) Journal

      You forgot the ones where they pay landowners to not cut down trees, or tree farming groups to plant the trees they were already going to plant anyway.

      Carbon Credits is just industrial theater meant to placate people demand governments enforce change. To employ a pun, it's a shell game of "hide the problem."

      • It's also a game of "how can we profit massively from this new 'market' in carbon credits" - creating derivatives for hedge fund managers to greenwash financial products. Carbon credit ETFs are some of the most traded on the market now. Financial institutions are making a lot of money on this shell game.
    • by stooo ( 2202012 ) on Friday September 01, 2023 @02:11AM (#63814079) Homepage

      Yes, exactly.
      Paying someone random to pollute more does not bring anything good.
      We should tax any fossil fuel extraction by an exponential amount instead. At least it will go to infrastructure, less corruption.

      • "exponential" has a precise meaning. Hint: it's not "a lot"

    • It's a hilarious scam, aimed at buying indulgences for status purposes.

      Truer words were never spoken.

    • "Offsets" in practice have been either about paying PRC to keep running Three Gorges Dam, or paying Turkey to run some wind power.

      It's a hilarious scam, aimed at buying indulgences for status purposes.

      That's not the scam. The scam is doing things which wouldn't already be done, like not cutting down trees that weren't in danger of being cut down. Your two examples aren't a scam, they are specifically the whole point of the scheme. You are just too narrow minded to understand what it is supposed to do:

      If you pay Turkey to run some wind power, that means wind power in Turkey has higher ROI. What do you think that means for investment in power generation when the ROI of green energy is suddenly increased th

  • Cut expenditures (Score:4, Insightful)

    by sTERNKERN ( 1290626 ) on Friday September 01, 2023 @02:23AM (#63814095)
    To raise shareholder profit. Who would have thought this would happen? As long as these companies are not regulated and forced to take those actions, nothing (good) will happen.
    • If they are on track with emission reductions by avoiding or reducing emissions, it makes sense to not pay into the (often somewhat scammy and greenwashy) offset schemes, and instead pay out to the shareholder. Especially since I am one of them.
      • Their entire business is creating carbon emissions. How would they ever be "on track" to reduce emissions without reducing the amount of oil and gas they extract?

        This is purely about keeping more money for shareholders and exec bonusing, after they've extracted the maximum value out of the greenwash - there's a reason they had a big marketing and PR campaign about their bullshit offsets and such, and then they quietly kill it without any announcements at all.

        • Producing oil & gas, refining and transporting it, etc, takes a fair amount of energy, which causes emissions. Those emissions - the ones emitted during the course of the company's operation - are the ones they are trying to reduce. The emissions caused by burning hydrocarbons after they've sold them is not their responsibility... it's ours. No matter how much some environmental groups would like that to be otherwise.
          • Well that's great. Unfortunately, it's very much still a problem that entire towns can be wiped off the map by worsening weather events and sea level rise, regardless of if those towns manage to go completely carbon negative or not. It turns out that it's everyone's atmosphere, and the atmosphere gives exactly zero fucks about arbitrary lines on maps, or who is and isn't causing the problem.

            So I guess people in low-lying towns, people close to large forests and wilderness that can catch on fire, and peopl

  • Be Who You Are. (Score:3, Insightful)

    by Petersko ( 564140 ) on Friday September 01, 2023 @02:24AM (#63814097)

    They're a fossil fuel company. Go ahead and be that. Reminds me of McDonald's push to sell salads. Ridiculous. I don't expect them to solve the problems. I don't expect we can force them into being green. I expect they will fade in importance through increasing irrelevance. Not all at once mind you, and not completely. But I don't think the answers will come from them, and I won't judge them for not giving them to us. I understand some people vehemently disagree with this premise, but I really believe that the problem is not production, it's consumption. Solve it there.

    • Re:Be Who You Are. (Score:5, Insightful)

      by AmiMoJo ( 196126 ) on Friday September 01, 2023 @03:46AM (#63814189) Homepage Journal

      As a responsible CEO they should be looking towards the inevitable future where demand for oil is much lower, and building up a renewable energy and vehicle charging business to replace it.

      As an irresponsible CEO, they will do everything they can to delay the decline of oil, up to an including setting the world on fire.

      • Diversification away from being just a petroleum company to an energy provider is their 'responsible' strategy.

        Here in Australia they are investing in electricity by acquiring established players such as ERM Power and Powershop. As a market player in an industry moving away from coal, this offers a roadmap to shareholders by positioning themselves as a renewable electricity partner.

        • by AmiMoJo ( 196126 )

          Australia seems to be struggling to develop its wind resources for some reason. From what I've read it's political.

          • Australia seems to be struggling to develop its wind resources for some reason. From what I've read it's political.

            Yup. Absolutely nothing to do with the intermittency of wind generation, and the fact that even experts and renewables-afficionados are calling their renewables scale hard to conceptualize [abc.net.au].

            Amimojo, expert in deflecting responsibility.

            • by AmiMoJo ( 196126 )

              Australia has vast amounts of space for solar, and great off-shore wind resources. Solar tracks the peak of aircon demand, and wind over such a wide area and out at sea has a decent capacity factor. They have the shallow areas to build simple, mature turbines on.

              They are also trying to get a long distance DC cable built to export that power to other countries.

              From what I understand, the delays are political and corporate mis-management.

              • From what I understand, the delays are political and corporate mis-management.

                Look again. Start with the link I provided in my last post. Follow through.

            • Yeh, because the intermittency isnâ(TM)t trivially easy to deal with with one of a huge number of different storage systems that are available.

              • Not so trivial when you take into account that they will need 5x more electricity than what they are using today to reach net zero. They already know they will lack storage capacity by 2030, even when taking into account all their current investments. Meaning that they will have to keep those coal/gas plants around.

                Also, the amount of storage they need is actually huge. And it is for only 26 million people. If you think that can scale at world population level, you are delusional. Climate change will get wa

      • by necro81 ( 917438 )

        As a responsible CEO they should be looking towards the inevitable future where demand for oil is much lower, and building up a renewable energy and vehicle charging business to replace it.

        I agree with your intention - they need to diversify their business against the inevitable decline of fossil fuels, or they'll just end up as a stranded asset holding company. But I disagree with your direction.

        What does Shell know about: geology and drilling, offshore platforms, global logistics, advanced chemist

      • As a responsible CEO they should be looking towards the inevitable future where demand for oil is much lower, and building up a renewable energy and vehicle charging business to replace it.

        As an irresponsible CEO, they will do everything they can to delay the decline of oil, up to an including setting the world on fire.

        How can this be modded Insightful? As a responsible CEO, they are already diversifying and bidding on wind farms projects around the world [shell.com]. But as responsible CEO, they also see that despite people telling them renewables is the only future, those very same people also want to drive their cars around, use their gas stoves, buy new shiny things every year, eat meat every day... So as responsible CEO of a company that can provide that, they also do that...

        The people being irresponsible are the ones that don't

      • As a responsible CEO they should be looking towards the inevitable future where demand for oil is much lower, and building up a renewable energy and vehicle charging business to replace it.

        The reality is they are. That is an unfortunate effect of the industry. By all forecasts if you want to maximise shareholder value you should *not* be investing in green energy now as oil/gas projects will not only pay for themselves, but will do so with significantly higher margins and significantly higher ROI than green energy projects.

        Green energy: you invest $10 today to make $1/year for the next 50 years. Your value is $40
        Oil energy: you invest $1000 today to make $50/year for the next 30 years. Your v

      • As an irresponsible CEO, they will do everything they can to delay the decline of oil, up to an including setting the world on fire.

        A rapid shift away from fossil fuels requires them to abandon infrastructure which is worth trillions. It makes it hard for them to compete with new green energy focused companies. I suppose they can try to gradually shift based on the depreciation of those assets, but I don't think the world should suffer for their economic timetable. Governments need to step in and start

  • Good (Score:5, Insightful)

    by bradley13 ( 1118935 ) on Friday September 01, 2023 @04:06AM (#63814203) Homepage

    Good. Carbon offsets are nonsense. It's like buying absolution from the church: maybe it makes you feel good, but you're really just throwing money away. There have been enough investigative articles showing that the offset programs (like tree planting) are mostly nonsense. Other kinds of offsets - like handing Tesla money for nothing - are nonsense for other, equally obvious reasons.

    Shell is in the oil business. There's nothing wrong with being honest about that. If we want to reduce the usage of fossil fuels, that's also fine. "If you want more of something, subsidize it; if you want less of something, tax it." That's the job of the government, and the voters who should drive government policy.

  • No greenwashing scheme will wash the blood out of Big Oil's money fast enough to avoid the reckoning.
  • Of course (Score:4, Insightful)

    by PPH ( 736903 ) on Friday September 01, 2023 @11:31AM (#63815109)

    Once Shell realized that carbon offset plans, credit exchanges, etc. were not as advertised. Here, in Washington State, the carbon credit program regulations can only be satisfied by buying credits from the State. They have a monopoly on that program. And the funds received disappear into a social justice fund with no spending accountability.

    It's like buying Indulgences. They only count if you buy them from the Church. If you try to do some charitable work on your own, you are still going to Hell.

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