Shell adopts Kyoto emissions cut commitment

Major oil firm positions itself for post-Kyoto climate debate, growth of flexibility mechanisms

Anglo-Dutch oil giant Shell will cut its global emissions of greenhouse gases by at least 10% from 1990 levels by 2002, the firm announced today. Under development since the international Kyoto climate conference in December 1997, the initiative is intended to give the company a "leading position" in the post-Kyoto process, according to a spokesperson.

Shell's commitment mirror's a similar pledge made by BP last month (ENDS Daily 21 September). According to the firm, it has already shaved 5% off its estimated 1990 emissions of 140m tonnes of carbon dioxide equivalent. It now plans to double the reduction by 2002. After this point, absolute emissions could go up or down, Shell says, depending on factors such as business performance, divestments or acquisitions. In any case, it says, emissions in 2010 will not be above the average Kyoto commitment taken on by industrialised countries of a 5.2% cut on 1990 levels.

The commitment cements moves already made by Shell to embrace the agenda of sustainable development. Earlier this year, the firm published its first sustainability rather than environmental report and announced its departure from a mainly US-based industry coalition that has lobbied against the Kyoto protocol (ENDS Daily 22 April).

Cuts in absolute greenhouse emissions are being made in two ways, the firm says. The first is by improving procedures and efficiency in current business areas. Shell's biggest single short-term option for cutting emissions will be to reduce venting and flaring of natural gas in exploration and production activities, according to a spokesperson, who said that the firm already had a major plan to cut venting and flaring in its Nigerian operations.

Shell will also continue to develop and promote its lower carbon intensity businesses, such as gas rather than oil and renewable energy rather than fossil fuels, the company said in a statement. Last year, Shell created a renewable energy unit as a fifth "core" company and pledged to triple its investment into solar power, biomass forestry and other renewables (ENDS Daily 16 October 1997).

In the short term, Shell's initiative is symbolic, since Kyoto targets apply only to governments of industrialised countries. But the firm believes that there will inevitably be a squeeze on international companies, and that it can gain useful experience by taking action now, even before discussions begin formally on implementing the Kyoto protocol.

"We need to be able to take advantage of the interplay of different parts of the group," a spokesperson told ENDS Daily. Shell would be unhappy with a system that imposed emissions reductions targets for individual parts of the firm, he said.

Like BP, Shell is to set up pilot internal emissions trading schemes; it will also be examining the possibilities of other actions it might take being counted officially under the other two Kyoto "flexibility mechanisms" of joint implementation and the clean development mechanism.

Follow Up:
Shell, tel: +44 171 934 1234. References: A statement on the climate emissions cut commitment is available on the web at http://www.shell.com/c/take_act.html

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