Shell will become the first gas retailer in Canada to offset emissions from customers' fuel purchases with an optional buy-in at the pump, recreating a program it runs in Europe as it signals its intention to help meet global goals to slow climate change as outlined in the Paris Accord.
The carbon offset program is part of a broader move by the company to reach net-zero greenhouse gas emissions by 2050, a target Shell Canada president Michael Crothers says is being driven by customers and investors. It’s a mandate shared by a handful of energy companies in Canada, including Cenovus Energy Inc., Enbridge Inc., and Suncor Energy Inc.
Mr. Crothers acknowledged the shift toward net-zero among oil and gas companies isn’t just about meeting environmental goals, but also signalling to the public that a sector that plays a huge role in driving climate change is doing its part to help turn that around.
“It’s incumbent upon us as companies to be listening to society at large, to customers, to our investors, and being part of the change, being part of the solution,” he told The Globe and Mail.
However, the new program is incumbent on consumers making the choice to pay extra for their gasoline to offset their driving.
Customers who want to buy into the new carbon-offset program will pay an extra two cents per litre at the pump, after an initial free rollout period. The cash will be invested in a range of conservation programs around the world, from Australia to Asia and Europe.
Shell is separately funding a reforestation project in Tsilhqot’in territory, B.C., to plant around 840,000 native trees in a region hard-hit by wildfires. The partnership with the communities will be managed by Central Chilcotin Rehabilitation, a Tsilhqot’in-owned forestry company.
Shell first used a carbon-offset program in the Netherlands. Around 20 per cent of customers opt to buy into that program, but Mr. Crothers said he’s not sure what the uptake will be in Canada.
“This is an experiment, so we’ll see how it goes,” he said.
Shell’s net-zero emissions goals apply to direct and indirect emissions that come from its own facilities and production, as well as the energy it purchases.
It also wants to reduce the end-use emissions from the products it sells – by far the largest share of emissions connected to the company, according to Reuters. The goal there isn’t hitting zero by 2050, but lowering the carbon footprint of its products by 65 per cent by 2050. It plans to do that by increasing the amount of lower-emission fuels it sells, such as renewable power, biofuels and hydrogen.
That pivot from oil and gas to lower-carbon fuels was behind Royal Dutch Shell’s September announcement it would cut up to 9,000 jobs by 2022, reducing its global work force by around 10 per cent.
Mr. Crothers said the resulting hit to the Shell Canada work force is yet to be determined.
However, he expects it to be “modest” because most of the losses will come from central offices, rather than the kind of projects Shell has invested in here in Canada, such as the Coastal GasLink pipeline project, the LNG Canada gas-processing facility in Kitimat, B.C., and shifting its Scotford Refinery complex outside Edmonton toward renewable power and fuels.
The company has also taken its Sarnia refinery in Ontario off the market as it figures out how the asset can fit into Shell’s long-term plans around renewable energy.
“Yes, we have to continue to be efficient in our base business, but we’re investing to grow as well,” Mr. Crothers said.
“We’re deeply embedded in Canada and I see lots of opportunity here."
The federal government has also pledged to hit net-zero emissions by 2050, but has not yet explained how it will reach that goal. And while B.C. and companies like Shell are moving forward with tree-planting in spite of the pandemic, the minority Liberals in Ottawa have not yet set their tree-planting plan in motion.
In last fall’s election, Prime Minister Justin Trudeau promised to plant two billion trees by 2030. More than a year later no tree has been planted, nor any money budgeted for the program.
The tree-planting program is a critical piece of Canada’s emissions-reduction goals. A research note written last year by Dave Sawyer and Seton Stiebert for the Smart Prosperity Institute estimated that planting two billion trees would reduce emissions by another three megatonnes by 2030 rising to six megatonnes by 2050.
So far Canada’s data show the country is on track to miss its 2030 emissions-reduction targets. While the federal government has repeatedly promised to not only meet the target but also surpass it, it has not yet released any updated plans to meet those goals.
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