Shell's carbon offset dilemma
By Alessandra Riemer, Editor at LinkedIn News
Shell has hit a fork in the road when it comes to paving a path to net zero. After making a splash with plans to pour $100 million a year into carbon offsets, which it unveiled in 2021, the company announced this environmental project has been "retired." The move, according to Bloomberg, signals the goals were "simply unattainable," with Shell only using under half of its planned budget for offset projects. With that becoming a major hurdle in the oil giant's larger sustainability plan, it forced Shell to pivot its strategy back to "the short-term focus," which is profit, says one sustainability expert.
Despite Shell's refocus on its areas of profitability (oil and gas), the oil giant has yet to change its targeted net-zero date of 2050.
Shell set out to amass the biggest corporate stockpile of carbon credits ever assembled. It had planned to retire a whopping 120 million credits annually by the end of the decade from projects that sequester carbon with trees, grasses or other natural resources like mangroves, many of which it would develop itself. (For reference, that would equate to about 75% of the current market).
And even before the new CEO took over in January, it had run into what will be a uncomfortably reality for those many other companies planning to lean heavily on offsets on their way to net zero: in the carbon market, quality and quantity are seemingly inversely correlated.
Shell, already seen by some as a climate villain, couldn't afford the negative headlines of sponsoring carbon projects that overstated their carbon impact or that exploited local communities. So it made a deliberate attempt to only work on credible and defendable projects, which in turn limited its options.
And then along came the new CEO who has reoriented the company back to its oil roots. That new direction also means the end of its 120 million target (though not the end of it's nature-based solutions team).
Please take a look at this new Bloomberg Green investigation from yours truly and William Mathis.
https://www.bloomberg.com/news/features/2023-08-31/shell-silently-abandoned-its-100-million-a-year-plan-to-offset-co2-emissions?leadSource=uverify%20wall
(With thanks to Gilles Dufrasne Anaïs BACH John Herbohn Rich Gilmore, Marie-Noëlle Keijzer, Jeff Bernicke, Adam Matthews and everyone else who spoke to us for this story)
