When a company like Shell, with a history of extracting carbon from the ground and burning it, says it wants to become the biggest electricity producer in the world, it is best for onlookers to begin with at least an element of suspicion. That suspicion has been well and truly aroused this week when Shell has come out with a plan to spend $300 million, effectively on carbon credits.
The press release says it will invest in natural ecosystems as part of its strategy to act on global climate change. But $300 million over 3 years, is $100 million a year, and as a percentage of its $388 billion revenue, it is less than 0.003%, and of positive cashflow around 0.006%. It is chump change, and poorly considered. It suggests that in 100 years Shell may begin the process of stopping being dependent upon oil, but not before.
As an example Shell’s payout to investors last year was $16 billion, and it allocated $25 billion in a share buy-back scheme.
If Shell were serious about moving a huge revenue of that type out of carbon producing activity, it could afford much broader sweeps of the brush.
Now we admit that Shell has much many broader sweeps of late, investments in smart charging; buying into mini grids; developing a solar park in its native Netherlands and investing in hydrogen compression at – all of this is mostly since the IPCC’s latest report.
Very clearly most of this is clear self-interest, and there is nothing wrong with that. Shell needs investments in emobility, because oil is likely being replaced by it; it needs investments in renewables, because that too is part of the replacement of fossil fuels – it needs to cover its position in case the wind changes rapidly (sic).
But offering customers a discount on fuel for some carbon credits is little more than a gimmick. Carbon credits are as often created and sold by companies by creating new fossil burning activities and then getting paid money, in the form of carbon credit purchases, to stop them. It has been a catastrophic failure which has wasted ten years in the fight against CO2 emissions, with precisely zero results. The only way to respond to the IPCC statements in to invest in renewables, and close or sell fossil based activities. Now we realize that Shell runs a business not a charity, and that over the past two years it has sold a lot of its “downstream” activities around the world, to local interests, which amounts to turning some of its fossil activities into cash. But most of what it has done to date has been paying lip service little more while conducting business as usual, and this press release needs to be treated as such.
Shell said it will use the money to invest at scale in forests, wetlands and other natural ecosystems around the world starting with planting 5 million trees, in partnership with Staatsbosbeheer, the independent Dutch state forestry service. But this is over the key 12 years that the IPCC targets as pivotal in turning the CO2 tide – far too little too late.
Shell says it has also signed a deal with Land Life Company to create a 300-hectare reforestation project in Spain. Around 300,000 trees will be planted in the Castilla y Leon region by the end of this year – a little more urgency there, but still not enough to move the dial.