Greenwashing Files: Shell

GHGs stands for greenhouse gases - this is the group of seven gases generally seen as contributing to global warming, including carbon dioxide (CO2) and methane (CH4).

The goals which countries agreed on in Article 2(1) of the 2015 Paris Agreement on climate change, to hold the increase in global average temperature to well below 2°C above pre-industrial levels and to pursue efforts to limit the temperature increase to 1.5°C above pre-industrial levels.

CO2e stands for carbon dioxide equivalent, a measure of greenhouse gases. Other non-carbon dioxide greenhouse gases are converted to the equivalent amount of carbon dioxide on the basis of their global warming potential in order to produce a single greenhouse gases measure.

Scope 1-3 emissions are the most widely used international carbon accounting tool. The Greenhouse Gas Protocol categorises a company’s GHG emissions into three groups:

• Scope 1 covers direct emissions from the company’s owned or controlled sources (e.g. burning fuel, company vehicles, emissions from the company’s own industrial processes).
• Scope 2 covers indirect emissions from the generation of electricity, steam, heating and cooling consumed by the company.
• Scope 3 includes all other indirect emissions that occur in a company’s value chain, including emissions from the use of its products.

Many fossil fuel companies make questionable claims about the sustainability of fossil fuel 'natural' gas, frequently marketed as ‘the cleanest-burning’ fossil fuel. Burning gas may produce less CO2 than burning coal or oil, but it is still carbon intensive, and not a viable long-term energy source – unlike renewable energy. Climate goals mean that gas use must be reduced, not increased.

On a full ‘lifecycle’ basis, generating electricity by burning gas produces on average more than 10 times the emissions of real low-carbon electricity sources like solar, and more than 40 times the emissions from wind power. As well as emitting significant CO2 when burnt, extracting, transporting and storing fossil fuel gas leaks methane, a powerful greenhouse gas. How much is leaked is critical - if leakage isn’t kept to low enough levels, the overall climate impact of gas can be worse than coal, the dirtiest fossil fuel. Measuring leakage is challenging, and significant advances in reducing leakage are needed.

Currently gas power is not typically limited to a ‘backup’ function when variable wind and solar renewable energy drops off. Instead, gas is a significant source of regular electricity generation globally, providing electricity that could be replaced by increasingly cheaper renewables. Meanwhile, investments in new gas infrastructure with decades-long operating lifetimes are set to 'lock in' unsustainable greenhouse gas emissions.

Companies’ climate plans increasingly rely on vague talk of huge ‘offsets’ or ‘nature-based solutions’ schemes instead of near-term reductions in fossil fuel production.  These plans, even if costed and scalable, can in practice often involve vast commercial monoculture tree plantations, which can cause negative impacts on biodiversity and communities, and struggle to guarantee carbon storage for the hundreds of years which fossil fuel emissions will remain in the atmosphere.  Some companies plan to claim the carbon ‘credits’ from existing forests by relying on questionable claims that the corporate offset schemes are the only way to stop deforestation.  Carbon removals and offsetting schemes like this can be a part of tackling climate change.  But they are not an alternative to prioritising cutting emissions for any sector, let alone for the fossil fuel industry.

Analysis shows that reaching climate targets whilst continuing with today’s oil and gas projects would require a rapid and massive acceleration in carbon capture and storage (CCS). Despite long-running talk of big plans for CCS, companies have never operated it at anything like sufficient scale.

Today, global operational CCS capacity accounts for about 0.1% of global fossil fuel emissions, and the technology cannot capture 100% of emissions.  Some companies plan to use, rather than store, captured CO2, often to extract yet more oil.  CCS also does not avoid upstream methane emissions and may even increase these due to the additional energy required to run the technology.

There is a history of repeated failures to scale-up CCS, and plans for economically viable CCS have been called ‘wishful thinking’.  Experts highlight numerous problems and barriers to short-term deployment and consider that any future development of CCS will now be too little, too late for urgent pathways to a safe climate.

Some companies are now turning from fossil fuels to forest biomass energy. Wood biomass is treated as ‘renewable’ under EU and UK law, based on a carbon accounting rule where the GHG emissions from burning biomass are counted as ‘zero’.

However, in reality, burning wood biomass can produce even more CO2 emissions than burning fossil fuels.  Sourcing the fuel for biomass through logging is also linked to deforestation - degrading the natural carbon sinks we need for a safe climate.  The carbon accounting rule is highly controversial, and does not mean that biomass is in reality ‘low-carbon’ or ‘carbon-neutral’. Because of this, scientists warn that burning wood biomass for energy creates a double climate problem - because it is a false solution to climate change that is replacing real solutions.

Emissions intensity targets – An intensity target is relative to product output, for example the amount of GHGs per barrel of oil produced.

Absolute emissions targets - An absolute target simply refers to the overall amount of GHG emissions attributable to the company.  Under many intensity targets, a company can maintain or even increase its overall GHG emissions, provided it increases production enough.

CCS stands for carbon capture and storage. This is the process of trapping carbon dioxide produced, for example, by burning fossil fuels and then storing it permanently so that it will not contribute to global heating. CCUS, or carbon capture, use or storage, additionally refers to the use of trapped carbon dioxide for some other process.

Capital expenditure is investment by a company on major fixed assets such as buildings, vehicles, equipment or land. This is different from operating expenditure, which represents day-to-day recurring costs like salaries or rent.