Six months after becoming chief executive officer at Shell Global oil company, Wael Sawan has apparently ended the world’s biggest corporate plan to develop carbon offsets, the environmental projects designed to counteract the supposed warming effects of CO2 emissions.
In reporting from Bloomberg News, it appears Sawan is making a pivot by abandoning the company’s carbon offset initiative.
According to Bloomberg, the shift was revealed during an all-day investor event in June, when Sawan presented his updated strategic roadmap for the company, which focused on cutting costs and maximizing profit, but had no reference at all to the company’s previous climate pledge of up to $100 million annually for the development of a comprehensive “carbon credit portfolio.”
The carbon credit initiative formed a cornerstone of Shell’s commitment to achieving net-zero emissions by 2050.
The Dunleavy Administration has been pursuing carbon credits as a revenue stream for the state. One of the aspects of this initiative is to sell carbon storage to energy companies doing oil and gas development.
Shell has yet to disclose any new targets for future offset development or provide specific insights into how it intends to fulfill its forthcoming climate obligations in light of these developments.
Sawan’s realignment shows recommitment to Shell’s core oil and gas operations, which have historically been the backbone of the company’s profits, as well as an acknowledgment that the aspirations related to carbon offsets were fundamentally unattainable.
The carbon market has been lucrative, but is still in its infancy. Shell first set a budget of $200 million for carbon projects from Africa to South America, but results have fallen short of expectation, Bloomberg reports.
“Until now, much of the criticism has focused on quality. Many investigations, including several by Bloomberg Green, have found that many offsets don’t deliver the environmental benefits they promise. Shell set out to solve that problem, with stringent requirements, deep pockets and more than a century of engineering expertise, and quickly learned that focusing on quality limited supply. It could have good offsets, or a lot of them, but not both,” Bloomberg reported.
“It’s really hard to get scale from high-quality credits,” said Gilles Dufrasne, carbon policy officer at Carbon Market Watch. “The two forces”—volume and quality—“work against each other.”
