London Daily

Focus on the big picture.
Friday, Aug 01, 2025

Oil giant Shell says it needs oil to pay for green shift

Oil giant Shell says it needs oil to pay for green shift

The boss of oil giant Shell has insisted it can transition to net zero by 2050, but it will need the cash from its oil and gas business to pay for it.

Ben van Beurden dismissed splitting its legacy oil and gas business from its renewables investment, a move urged by activist shareholder Third Point.

Talking exclusively to the BBC, he said the company's plans for greener energy could only be funded by oil and gas.

"At this point in time [the cash] comes from our legacy business," he said.

Mr van Beurden was speaking at Europe's biggest oil refinery at Pernis near Rotterdam, a facility he plans to transform from refining petrol and diesel, to making biofuels and hydrogen over the next decade.

"These things can only be done if you have a facility (like Pernis) to work with and if you have the cash.
"If we have to build a hydrogen plant from a wind farm that we build in the North Sea for a billion dollars that is not going to be funded by a hydrogen business - it will be funded by the oil and gas business," he said.

New oilfields


But oil and gas is not just a legacy business. Shell wants to develop new oilfields including Cambo in the North Sea which it hopes will produce 170 million barrels of oil.

How does he justify that?

Mr van Beurden says the decision on the Cambo oilfield is ultimately one for government but says it makes no sense to substitute UK resources for foreign imports to satisfy domestic demand.

He said: "Why would you say: Let's not get our oil and gas demands from our own resources but let's import from somewhere else, probably with a larger carbon footprint.

"I don't think that it is going to contribute to the balance of payment for the UK and also will not help the carbon footprint of the world."

Doubt over targets


Shell currently has a global carbon footprint the size of Russia's if you include the emissions from customers using Shell products.

It plans to spend four times as much on oil and gas development as on renewables next year. This is why some doubt that Shell can hit either its own targets and those imposed by a Dutch court which require it to halve its own net emissions by 2030 and eliminate them entirely by 2050. Shell is planning to appeal part of the ruling.


Shell is also expected to make its best efforts to reduce the emissions of its customers - which make up 90% of Shell's overall carbon footprint. Shell intends to appeal that court judgement.

Shu Ling Liauw from research firm Global Climate Insights has analysed the oil firm's spending plans and estimates that Shell will be producing more emissions by 2030 than it is now as it intends to grow its gas business.

"Even if you're very generous, and assume they get all the amounts of carbon capture and storage and offsets that they need, they might just miss their 2030 targets, and they will not be able to deliver on 2050.

"In fact, they will be increasing emissions until 2030, and still be producing significant amounts of emissions in 2050," she says.

Mr van Beurden says these estimates are speculative and insists Shell is on track, having cut the carbon intensity of its own operations by 17% since 2016.

Pension pressure


Shell is a major component of the UK's leading share index. If you have a pension you are almost certainly a part owner of Shell, BP and other oil and gas companies.

There is growing clamour on the part of many pension fund trustees and their scheme members to dump or divest shares in fossil fuel businesses to starve them of capital. That would be a mistake, according the world's largest asset manager Blackrock which looks after 13 trillion dollars in pensions and savings.

"You can't divest from the world. It's much better to engage with companies and use your influence as a shareholder. If you divest, you lose that influence," said Sandy Boss, head of investment stewardship.

Consumers have the power


Others point out that if Shell itself were to sell its oil and gas business, those assets would be hoovered up by companies that might be less transparent and less inclined to make the effort to decarbonise.

As the recent energy crisis brutally exposed, the UK along with the rest of the world is still hugely reliant on fossil fuel. That reliance needs to be managed down over time according to Mr van Beurden otherwise we will see price shocks in the future that will be counterproductive.

"I think this energy transition can be done but it will require a lot of orchestration and a lot of faith of society that it can be done. `

"If you want to destroy the faith by driving up energy prices, by creating shortages or market failures, I think politicians are going to lose societal acceptance that this is actually doable."

As powerful as Shell is, its customers may be more powerful.

As long as there is demand for fossil fuels. Shell or someone else will supply it. That demand can be influenced by government carrot or stick, companies can be squeezed by financiers but consumer behaviour will ultimately determine whether the world can hit net zero by 2050.


Shell boss Ben van Beurden talks to BBC News exclusively about its transition to net zero.

Newsletter

Related Articles

0:00
0:00
Close
Trump Administration Finalizes Broad Tariff Increases on Global Trade Partners
J.K. Rowling Limits Public Engagements Citing Safety Fears
JD.com Launches €2.2 Billion Bid for German Electronics Retailer Ceconomy
Azerbaijan Proceeds with Plan to Legalise Casinos on Artificial Islands
Former Judge Charged After Drunk Driving Crash Kills Comedian in Brazil
Jeff Bezos hasn’t paid a dollar in taxes for decades. He makes billions and pays $0 in taxes, LEGALLY
China Increases Use of Exit Bans Amid Rising U.S. Tensions
IMF Upgrades Global Growth Forecast as Weaker Dollar Supports Outlook
Procter & Gamble to Raise U.S. Prices to Offset One‑Billion‑Dollar Tariff Cost
House Republicans Move to Defund OECD Over Global Tax Dispute
Botswana Seeks Controlling Stake in De Beers as Anglo American Prepares Exit
Trump Administration Proposes Repeal of Obama‑Era Endangerment Finding, Dismantling Regulatory Basis for CO₂ Emissions Limits
France Opens Criminal Investigation into X Over Algorithm Manipulation Allegations
A family has been arrested in the UK for displaying the British flag
Mel Gibson refuses to work with Robert De Niro, saying, "Keep that woke clown away from me."
Trump Steamrolls EU in Landmark Trade Win: US–EU Trade Deal Imposes 15% Tariff on European Imports
ChatGPT CEO Sam Altman says people share personal info with ChatGPT but don’t know chats can be used as court evidence in legal cases.
The British propaganda channel BBC News lies again.
Deputy attorney general's second day of meeting with Ghislaine Maxwell has concluded
Controversial March in Switzerland Features Men Dressed in Nazi Uniforms
Politics is a good business: Barack Obama’s Reported Net Worth Growth, 1990–2025
Thai Civilian Death Toll Rises to 12 in Cambodian Cross-Border Attacks
TSUNAMI: Trump Just Crossed the Rubicon—And There’s No Turning Back
Over 120 Criminal Cases Dismissed in Boston Amid Public Defender Shortage
UN's Top Court Declares Environmental Protection a Legal Obligation Under International Law
"Crazy Thing": OpenAI's Sam Altman Warns Of AI Voice Fraud Crisis In Banking
The Podcaster Who Accidentally Revealed He Earns Over $10 Million a Year
Trump Announces $550 Billion Japanese Investment and New Trade Agreements with Indonesia and the Philippines
US Treasury Secretary Calls for Institutional Review of Federal Reserve Amid AI‑Driven Growth Expectations
UK Government Considers Dropping Demand for Apple Encryption Backdoor
Severe Flooding in South Korea Claims Lives Amid Ongoing Rescue Operations
Japanese Man Discovers Family Connection Through DNA Testing After Decades of Separation
Russia Signals Openness to Ukraine Peace Talks Amid Escalating Drone Warfare
Switzerland Implements Ban on Mammography Screening
Japanese Prime Minister Vows to Stay After Coalition Loses Upper House Majority
Pogacar Extends Dominance with Stage Fifteen Triumph at Tour de France
CEO Resigns Amid Controversy Over Relationship with HR Executive
Man Dies After Being Pulled Into MRI Machine Due to Metal Chain in New York Clinic
NVIDIA Achieves $4 Trillion Valuation Amid AI Demand
US Revokes Visas of Brazilian Corrupted Judges Amid Fake Bolsonaro Investigation
U.S. Congress Approves Rescissions Act Cutting Federal Funding for NPR and PBS
North Korea Restricts Foreign Tourist Access to New Seaside Resort
Brazil's Supreme Court Imposes Radical Restrictions on Former President Bolsonaro
Centrist Criticism of von der Leyen Resurfaces as she Survives EU Confidence Vote
Judge Criticizes DOJ Over Secrecy in Dropping Charges Against Gang Leader
Apple Closes $16.5 Billion Tax Dispute With Ireland
Von der Leyen Faces Setback Over €2 Trillion EU Budget Proposal
UK and Germany Collaborate on Global Military Equipment Sales
Trump Plans Over 10% Tariffs on African and Caribbean Nations
Flying Taxi CEO Reclaims Billionaire Status After Stock Surge
×