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This means net-zero carbon emissions from our operations – our Scope 1 and 2 emissions – and net zero from the end-use of all the energy products we sell – Scope 3 emissions.

The Scope 3 emissions we report account for over 90% of the total emissions we report.

Our target includes the emissions not only from the energy we produce and process ourselves but also from all the energy products that others produce and we sell to our customers.

Our climate target is to be a net-zero emissions energy business by 2050.

In October 2021, we set a target to reduce absolute emissions by 50% by 2030, compared with 2016 levels on a net basis. This covers all emissions in Scope 1, which come directly from our operations, and in Scope 2, from the energy we buy to run our operations.

We have set targets to reduce the net carbon intensity¹ of the energy products we sell by 9-13% by 2025, 15-20% by 2030, and 100% by 2050, compared with 2016. We use net carbon intensity to show our progress in changing the mix of energy products we sell to customers. Net carbon intensity measures emissions associated with each unit of energy we sell, compared with a 2016 baseline. It reflects changes in sales of oil and gas products, and changes in sales of low- and zero-carbon products - such as biofuels and renewable electricity.

In March 2024, we also set a new ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11)². This level of ambition is in line with the European Union's climate goals in the transport sector, among the most progressive in the world.

Achieving this ambition will mean reducing sales of oil products, such as petrol and diesel, as we support customers as they move to electric mobility and lower-carbon fuels, including natural gas, LNG and biofuels.

The delivery of this target will bring down emissions under Shell’s operational control by around 41 million tonnes of CO₂ equivalent by 2030, compared with 2016 levels on a net basis.

Shell’s net carbon intensity is the average intensity, weighted by sales volume, of the energy products sold by Shell.

In other words, it is the average amount of greenhouse gas emissions which are produced for each unit of energy that we sell, and which is used by our customers.

It includes the emissions associated with the production, processing, transport and end-use of the energy products.

Shell’s net carbon intensity is calculated using our Net Carbon Footprint methodology and has been reported annually since 2019.

We have set several specific net carbon intensity targets.

Beginning in 2019, we set an unconditional three-year target to reduce our net carbon intensity by 2-3% by the end of 2021, compared with a 2016 baseline. We achieved this short-term target.

We then announced a target of a 3-4% reduction by the end of 2022. This target was reached by the end of 2022: the net carbon intensity of the energy products we sell had fallen by 3.8%, compared with 2016.

We set a target of a 6-8% reduction by 2023, which we met, achieving a total of 6.3% reduction compared with 2016, and a target of a 9-12% reduction by 2024 which we again met, achieving a 9% reduction compared with 2016.

We have a further short-term target of a 9-13% reduction by 2025 as we move closer to our 15-20% reduction target by 2030.

We use 2016 as the base year for our targets as this was the first year in which we reported the net carbon intensity of our business.

To decarbonise our operations, we are focusing on:

• making portfolio changes such as acquisitions and investments in low-carbon intensity projects, decommissioning plants, divesting assets, while sustaining our oil production with increasingly lower carbon intensity;
• progressing the repurposing of our energy and chemicals parks;
• improving the energy efficiency of our operations;
• using more renewable electricity to power our operations; and
• developing CCS for some of our facilities.

If required, we may choose to use high-quality carbon credits to offset any remaining emissions from our operations, in line with the mitigation hierarchy of avoid, reduce, and compensate. To reduce carbon emissions across sectors, we are partnering with our customers and others, including support for government policies.

Explore our climate target

We retire credits to compensate for emissions, including those associated with the energy our customers use in transport, homes, producing goods and providing services, in line with the carbon mitigation hierarchy of avoid, reduce, and compensate. This approach complements our activities in avoiding and reducing emissions from our own operations, as well as working with customers to help develop more low-carbon energy solutions to meet their needs.

This is part of our approach to meeting our net carbon intensity (NCI) targets.

We may choose to use high-quality carbon credits to offset any remaining emissions from our operations, in line with the carbon mitigation hierarchy of avoid, reduce, and compensate. Not all technologies and energy services can be swapped for low- or zero-carbon energy solutions today. In some sectors, practical alternatives have yet to be developed. To help reach net zero, carbon credits can be used to help compensate for emissions we cannot yet avoid and for the emissions associated with the use of our products.

You can find out more about our climate targets here.

The targets and ambition are captured in our remuneration structures. Our annual bonus scorecard and long-term Performance Share Awards (PSA) contain "Shell's journey in the energy transition" performance metrics designed to ensure that remuneration is clearly aligned with Shell's operating plan and longer-term strategic ambitions that support the energy transition to 2030 and beyond. In the bonus, there are targets around LNG volumes, reducing operational emissions, and supporting customer decarbonisation. The PSA takes account of our progress towards reducing Shell’s operational emissions and supporting our customers to reduce emissions. More details are available in our �鶹��ý Report and Accounts 2024.

The scope of our net carbon intensity target includes:

• Shell’s Scope 1 and 2 emissions, these are the direct and indirect emissions from our own operations associated with the production and processing of energy products.
• Scope 3 emissions include the emissions from the use of the energy products we sell, regardless of whether they are produced by Shell or a third party. Also included are the emissions associated with the manufacturing of the energy products that we purchase from third parties for resale.
• Mitigation of emissions using carbon sinks, such as reforestation or carbon capture and storage.

The following supply chains and steps in the product lifecycles are included in Shell’s net carbon intensity:

• Oil products: (i) crude oil production, (ii) transportation of crude oil (pipeline/shipping), (iii) refining, (iv) distribution of oil products, and (v) end use of oil products;
• Pipeline gas: (i) gas production, (ii) transportation of gas via pipeline, and (iii) end use of gas;
• Liquefied Natural Gas (LNG): (i) gas production, (ii) transportation of gas via pipeline, (iii) liquefaction, (iv) shipping of LNG products, (iv) regasification of LNG in recipient terminals, (v) local distribution of gas, and (vi) end use of gas;
• Gas-to-Liquids (GTL) fuels: (i) gas production, (ii) transportation of gas via pipeline, (iii) gas-to-liquid processing, (iv) shipping of GTL products, (v) local distribution of GTL fuel products, (vi) end use of GTL fuels;
• Biofuels: (i) production, (ii) transportation (domestic/shipping), (iii) distribution and (iv) end-use of biofuels;
• Electricity from renewable sources, solar and wind, converted to fossil energy equivalent and electricity purchased and re-sold from the national transmission/distribution networks;
• CO₂ reductions: the impact of CO₂ reductions from carbon capture usage and storage (CCUS) projects on our operations, and carbon credit offsets.

Our net carbon intensity target includes the emissions associated with the energy products sold by Shell.

Non-energy products such as chemicals, lubricants and bitumen are not included. This is because their end-use is not combustion, and so they are not consumed as energy in the way that fuels like liquefied natural gas (LNG), petrol or diesel are consumed.

Our sales volumes exclude certain contracts held for trading purposes and reported net rather than gross. Business-specific methodologies are applied to net volumes of oil products, pipeline gas and power. Paper trades that do not result in physical product delivery are excluded.

Retail sales volumes from markets where Shell operates under trademark licensing agreements are not included in the sales volumes reported by Shell and are therefore excluded from Shell’s NCI.

The following greenhouse gas emissions are not included in the net carbon intensity:

• emissions from production, processing, use and end-of-life treatment of non-energy products, such as chemicals and lubricants;
• emissions from third-party processing of sold intermediate products, such as the manufacture of plastics from feedstocks sold by Shell;
• emissions associated with the construction and decommissioning of production and manufacturing facilities;
• emissions associated with the production of fuels purchased to generate energy on site at a Shell facility;
• other indirect emissions from waste generated in operations, business travel, employee commuting, transmission and distribution losses associated with imported electricity, franchises and investments; and
• emissions from capital goods, defined by the GHG Protocol as including fixed assets or property, plant and equipment, and other goods and services not related to purchased energy feedstocks sourced from third parties or energy products manufactured by third parties and sold by Shell.

Lifecycle analysis can be used to assess the overall greenhouse gas (GHG) impacts of a fuel, including each stage of its production and use.

As an example, the net carbon intensity of gasoline would include the emissions associated with: a) the production, transport and refining of crude oil; b) the transport of the fuel to a service station, and; c) the final combustion of the fuel in a vehicle.

Shell uses this approach to measure the net carbon intensity of each of the different energy products we sell. Specifically, we calculate the intensity (gCO₂e/MJ) in terms of the grams of carbon dioxide equivalent (gCO₂e) per unit of energy (MJ) sold.

Once we have calculated the net carbon intensity for each of the individual energy products, we then calculate the overall net carbon intensity by taking a weighted average of the individual product intensities, with the weighting based on their sales volumes.

Finally, we deduct, or "net off", any emissions that are stored in sinks. For example, we subtract emissions that are stored using carbon capture and storage in our own operations. We also subtract any carbon dioxide emissions that are removed from the atmosphere and stored using natural carbon sinks created using nature-based solutions, such as reforestation.

This approach enables like-for-like comparisons across a range of energy products and allows us to establish the average net carbon intensity for all the energy products we sell. Lower heating values are used for the energy content of the different products and a fossil-equivalence approach is used to account for electrical energy, so that it is assessed on the same basis as our other energy products.

Shell’s net carbon intensity is measured using our Net Carbon Footprint methodology, a detailed description of the methodology is available on our website (PDF)

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Shell’s target is to become a net-zero emissions energy business by 2050.

Reducing the net carbon intensity of the energy products we sell to net zero is equivalent to reducing our absolute emissions to net zero.

We already report our absolute emissions on an annual basis and have a target to reduce absolute emissions by 50% by 2030, compared with 2016 levels on a net basis. This covers all emissions in Scope 1, which come directly from our operations, and in Scope 2, from the energy we buy to run our operations.

In March 2024, we introduced an ambition to reduce customer emissions from the use of our oil products by 15-20% by 2030 compared with 2021 (Scope 3, Category 11). That is more than 40% compared with 2016 reported emissions.³

Since 2019, we have also published the net carbon intensity of the energy products we sell.

These measures complement each other and allow Shell’s progress towards our net-zero target to be tracked.

The Paris Agreement aims to strengthen the global response to the threat of climate change by “holding the increase in the global average temperature to well below 2°C above pre-industrial levels and pursuing efforts to limit the temperature increase to 1.5°C above pre-industrial levels.” Shell supports the more ambitious goal of the Paris Agreement, which is to limit the rise in global average temperature this century to 1.5°C above pre-industrial levels. There is no established standard for aligning an energy supplier's decarbonisation targets and ambitions with the 1.5°C temperature goal of the Paris Agreement. For this reason, we have defined our net carbon intensity target using 1.5°C scenarios developed for the Intergovernmental Panel on Climate Change (IPCC) Sixth Assessment Report (AR6).

We start with the complete set of 1.5°C scenarios and then exclude scenarios which are too reliant on carbon removals or use of bioenergy before removing outliers. We then calculate an emissions intensity for each scenario which is comparable to our own net carbon intensity. Finally, we produce a 1.5°C pathway based on the reductions in emissions intensity over time. We have chosen to use a range instead of any individual scenario to better reflect the uncertainty of the energy transition.

We undertake external verification of our greenhouse gas (GHG) emissions annually. Our net carbon intensity, Scope 1 and 2 GHG emissions from assets and activities under our operational control, and the emissions associated with the use of our energy products (Scope 3) included in our net carbon intensity have been verified to a level of limited assurance. See our �鶹��ý Report 2024 for details.

Progress against Shell's absolute emissions and net carbon intensity targets and ambition is reported annually in our �鶹��ý Report. This is in line with best practice as set by the Task Force on Climate-related Financial Disclosures.

The intended use of the metric is to track progress in reducing the overall net carbon intensity of the energy products sold by Shell, as described in Shell’s climate targets.

The calculation includes greenhouse gas emissions – on an equity basis – from several sources, including direct emissions from Shell operations; those third parties’ emissions caused by supplying energy for the production of the products we sell; and our customers’ emissions from consumption of the products we sell.

Emissions from the extraction, transport and processing of crude oil, gas or other feedstocks, the transport of products to our customers, and our customers’ emissions from the use of products we sell are included.

Also included are emissions from elements of this lifecycle not owned by Shell, such as oil and gas processed by Shell but not produced by Shell; or from oil products and electricity marketed by Shell that have not been processed or generated at a Shell facility.

Emissions compensated through various measures, such as by working with nature to create carbon sinks – including forests and wetlands – or mitigated by using carbon capture and storage technology are also taken into account.

The net carbon intensity is not a mathematical derivation of total emissions divided by total energy, nor is it an inventory of absolute emissions.

It is a weighted average of the life-cycle CO₂ intensities of different energy products, normalising them to the same point relative to their final end-use. The use of a consistent functional unit, grams of carbon dioxide equivalent per megajoule (gCO₂e/MJ), allows like-for-like comparisons and the aggregation of individual life-cycle intensities for a range of energy products including renewable power.

In order to calculate the energy content of the different products, their lower heating values are used to derive their energy content in megajoules using a fossil-equivalence approach for electricity.

Our net carbon intensity is a comprehensive measure of the lifecycle intensity of the energy products we sell. As such the boundary definitions used in calculating the net carbon intensity cover a different scope than the reporting boundaries for Shell’s annual GHG reporting (Scope 1/2/3) under the Greenhouse Gas Protocol. As a result, the notional CO₂e emissions included within the scope of the net carbon intensity calculation will differ from the sum of the Scope 1, 2 and 3 emissions Shell reports.