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As the energy transition progresses, governments and regulators across the globe are setting decarbonisation targets. For instance, the US government is targeting a 50% reduction in its economy-wide greenhouse gas (GHG) footprint by 2030, compared with 2005. Likewise, the �鶹��ý government has targeted reducing carbon emissions by 68% by 2030, compared to 1990 levels, and 77% by 2035. The European Commission has also adopted “Fit for 55”, a set of policy proposals that aim to reduce European Union GHG emissions by at least 55% by 2030.

The accelerating pace of change in the energy transition means that there is a compelling rationale to act now. Amid these targets, it is becoming clear that maintaining the status quo will be financially untenable for heavy-emitting sectors. Over the next decade, depending on country and sector-specific conditions, maintaining the status quo may put companies in a challenging commercial position, and the cost of inaction is likely to escalate, growing in proportion to rising regulatory and societal calls for decarbonisation. This cost may eventually surpass that of implementing decarbonisation measures.

The global trends in the energy industry and regulatory positions indicate that acting now may be more cost-effective than doing nothing. According to the IEA, 70% of decarbonisation at the asset level can be achieved cost-effectively, allowing for the integration of sustainability measures while ensuring that businesses can operate at cost, with limited adverse effects on margins. 

In light of these considerations, it is evident that the commercial drive for decarbonisation encompasses both technical and regulatory dimensions. Operators within the European Union (EU), for instance, face a substantial increase in their financial burden for failing to curb emissions. This will be driven by a material reduction of free allowances after 2030 and a potential increase in the Emissions Trading Scheme (ETS) prices. As an example, the study¹ found that the EU ETS price could progressively increase to around €130/tCO₂ by 2040 and skyrocket, exceeding €500/tCO₂ by 2044.

Another increasingly important driver is companies’ social license to operate. Being a good neighbour may drive reduction of local emissions and the manufacturing of low-carbon products. As we approach 2030, companies will need to navigate project planning, the acquisition of permits, and getting plants built with connectivity to the required infrastructure. These require the societal support for operations to be undertaken efficiently. Although decarbonisation is a global movement, it involves local solutions.

Shell has extensive experience in this field, gained during its own decarbonisation journey. Shell Catalysts & Technologies is working with customers from heavy industrial sectors, supporting them in better understanding their decarbonisation pathway options. For example, Shell Catalysts & Technologies can offer solutions to operators of hard-to-abate steel plants and cement plants, where Scope One and Scope Two emissions primarily stem from the high process temperatures required for production, as well as the inherent emissions of CO₂ resulting from the chemical processes involved. Although these companies appear different, their assets share the same objectives as Shell’s – reducing their carbon footprint.

By considering the region-specific nuances of decarbonisation policy and value drivers, we explore multiple options to identify the most effective pathway for each client’s plant and location. We then formulate a risk-mitigated decarbonisation strategy by using a proprietary model capable of analysing thousands of scenarios involving a mix of technologies. This enables us to craft a comprehensive pathway designed to ensure resilience for the next 10–15 years.

Shell presents an array of decarbonisation options including carbon capture and storage (CCS), electrification, decarbonised (blue) hydrogen and renewable power. We work with clients around the globe to help them understand which levers present the best decarbonisation option for an asset. Our solution-agnostic stance presents families of technological solutions which Shell can implement as required.

To learn more, , where we dive into the possibilities of a decarbonisation journey with Shell Catalysts & Technologies.

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