Royal Dutch Shell pledged to increase it's investments in renewable fuels, as pressure is bowing from stack holders and the Paris international climate accord to reduce Carbon emission. Considering last decade Shell and other big oil companies have moved very little toward high energy production through wind and solar. There are signs of a commitment now to take climate change more seriously.
Shell’s chief executive, Ben van Beurden, said to investors that company's new energies division would spend up to $2 bn a year on renewable energy sources like wind, solar and hydrogen power and on electric-car charging stations from 2018 to 2020. This is a large increment in sum from previous commitment by Shell, but less than 10% of the oil giant's total investment dollars.
Company supported the goal of Paris accord, that is to keep global temperatures from rising more than 20C above pre-industrial level, and pledge was just a start said Mr. van Beurden. He also added that we will do it by reducing the net carbon footprint of the full range of Shell emissions.
Shell pledge received positive reviews from environmentalists. Europe's largest oil company said it aimed to reduce Carbon emission by 20% by 2035 and by half by 2050. The growing global dependence on natural gas, as a replacement for coal, should help Shell meet its goals since it has made a big investment in producing and trading gas.
Dan Becker, director of the Washington-based Safe Climate Campaign, said it's good that they are looking in the right direction, and are well ahead of their competitors in recognizing that the days of oil dependence are limited. He also added that we’ll have to make progress a lot more quickly than they are projecting in order to protect the climate.
International oil companies have begun to make more public pledges to reduce Carbon releases, due to the acceptance of Paris accord by most of the countries in order to reduce their green house gas emission. Several European oil companies have accepted that they would have to leave some reserve carbon resources in the ground. Statoil, the Norwegian oil company, has begun a major shift toward investing in wind power. This month, Shell and seven other oil companies pledged to reduce emissions of methane, a potent greenhouse gas, from leaky pipes and wells.
To make electric cars capable of longer trips, Shell is planning to install fast-charging stations on Europe's highways, working with BMW, Daimler, Ford and Volkswagen. Shell has projected that the expansion of the global electric-car fleet over the next decade will significantly slash gasoline demand.
European oil companies have moved faster on climate efforts than their American counterparts, partly because there is a broader political consensus on the problem on the Continent. Norway, though a major oil producer, is considering removing oil investments from the holdings of its sovereign wealth fund.
Pledge is praised by a group of environmentally minded Shell shareholders that has the support of the Church of England and an assortment of Dutch institutional investors, Mark van Baal, founder of “Follow This”, called initiative as “an ambitious decision to take leadership in achieving the goals of the Paris climate agreement.”
Company would measure the accomplishments of the Carbon-reducing efforts in reports every 5 years, said Mr. van Beurden. In the meantime, Shell appears to be making increasing profits from oil and gas. With oil prices and cash flow gradually rising again, Shell announced on Tuesday that it was reviving its all-cash dividend, discarding a program that gave shareholders an option of receiving dividends in shares of stock, which had been depressed in recent years.