Slide 1: Delivering more value, with less emissions
Delivering more value, with less emissions Energy Transition Strategy 2024 #PoweringProgress Shell plc | Annual ESG Update 2024 Copyright of Shell International B.V.
Slide 2: Our agenda and speakers for today
Annual ESG Update 2024 Our agenda and speakers for today (GMT) 15:00 – 15:05 Welcome 15:05 – 16:00 Shell’s strategy to 2030 Delivering more value, with less emissions 16:00 – 16:15 Break 16:15 – 16:50 Fireside Chat and Q&A Wael Sawan Sinead Gorman Chief Executive Officer Chief Financial Officer 16:5
Slide 3: Cautionary note
Cautionary note The companies in which Shell plc directly and indirectly owns investments are separate legal entities. In this presentation “Shell”, “Shell Group” and “Group” are sometimes used for convenience where references are made to Shell plc and its subsidiaries in general. Likewise, the word
Slide 4: Our strategy to 2030
Our strategy to 2030 Delivering more value, with less emissions Annual ESG Update 2024 | March 27 4
Slide 5: Progress in the energy transition has not been uniform
Our beliefs Progress in the energy transition has not been uniform Share of the world’s Share of energy today being final energy demand supplied by low carbon sources a 29% 44% b Buildings [A] Industry Transport 27% c 64% 36% 6% a Buildings [A] b Industry c Transport For Transport, Industry and Buil
Slide 6: Countries are moving at different paces
Our beliefs Countries are moving at different paces End Use Sector Position of each G20 country as at end 2022 Passenger Road Commercial road Aviation Shipping Buildings Power Heavy Industry Pre-transition Pre-commercial Early stage Intermediate stage Advanced stage Shell internal analysis of progre
Slide 7: The shape of the future energy system remains uncertain
Our beliefs The shape of the future energy system remains uncertain Share of Global Primary Energy Mix a Hydrocarbon 100% b Renewables [A] c Low-carbon molecules [B] 80% a 60 % 40% b 20 % c 0% 2015 2020 2025 2030 2035 2040 2045 2050 Scenarios included: Shell Sky2050 and Archipelagos; C1 & C2 from AR
Slide 8: Evolving demand requires a balanced and orderly transition
Our beliefs Evolving demand requires a balanced and orderly transition World primary energy mix Our core energy transition beliefs 100% 90% Energy Demand (EJ/year) LNG will play a critical role in the energy transition, 80% including replacing coal in heavy industry 70% 60% Oil will have a continued
Slide 9: Oil and gas will have a role for the foreseeable future
Our beliefs Oil and gas will have a role for the foreseeable future LNG demand will continue to grow, driven by Asian markets, Oil demand growth will slow and then decline with while playing a key role in the transition a key role remaining in the transport sector Demand by region [A] Role in the tr
Slide 10: Low and negative carbon solutions will accelerate to drive decarbonisation
Our beliefs Low and negative carbon solutions will accelerate to drive decarbonisation Accelerating electrification Exponential growth in Unparalleled scaling of of energy demand low-carbon molecules carbon removal solutions Share of final energy electrified (%) Low Carbon Molecule Demand (Mboe/day)
Slide 11: Net-zero emissions by 2050
Net-zero emissions by 2050 Aiming to lead where we have competitive strengths and where we believe we can make the most impact in the energy transition Annual ESG Update 2024 | March 27 11
Slide 12: The investment case through the energy transition
The investment case through the energy transition Providing Energy Security Committed to oil and gas, with a focus on LNG growth Investing ~$40 billion[A] in Leading Integrated Gas & Advantaged Upstream Enabling the Energy Transition Providing molecules to decarbonise the transport and industry sect
Slide 13: Delivering more value, with less emissions
Our strategy Delivering more value, with less emissions Trading & Optimisation CFFO Net Absolute Emissions [A] ~25% Leading Integrated Gas ~70% Advantaged Upstream ~30% ~75% Differentiated Downstream/R&ES Scope 3 Scope 1 & 2 [A] Net Absolute Emissions cover the Scope 1, 2 and 3 emissions from our en
Slide 14: Continuing to reduce emissions from our own operations
Our progress towards net zero Continuing to reduce emissions from our own operations Today Today Scope 1 & 2 emissions [A] Methane emissions [B] Million tonnes CO2e 31% Thousand tonnes 70% reduction 138 reduction (vs 2016) (vs 2016) 83 2030 Target 55 2030 Target 40 41 68 Near-zero 58 57 50% methane
Slide 15: Reducing emissions from the products we sell
Our progress towards net zero Reducing emissions from the products we sell Net carbon intensity [A] Scope 3 emissions from Oil Products [B] Grams of CO2e per megajoule (gCO2e/MJ) Million tonnes CO2e Today 2030 Target Today 2030 Ambition 6.3% 9% 15-20% Introducing a range of 15–20% for our target red
Slide 16: A focused multi-energy company enabling decarbonisation
Our Strategy A focused multi-energy company enabling decarbonisation Our energy transition plans cover all our businesses Differentiated Downstream, Leading Advantaged Renewables & Energy Integrated Gas Upstream Solutions Growing our world-leading Cutting emissions from Transforming our businesses L
Slide 17: Supplying LNG with some of the lowest carbon intensity
Leading Integrated Gas Supplying LNG with some of the lowest carbon intensity Developing projects with some of Consistently ahead of the industry average the lowest GHG emission intensity in methane emission performance [A] GHG Emission Intensity (tCO2e/kboe) Methane emissions intensity (%) 45 0.4 4
Slide 18: Delivering high value, low carbon oil
Advantaged Upstream Delivering high value, low carbon oil More value: Shell deep-water unit CFFO excluding Less emissions: intensity of Shell deep-water working capital compared with peers assets compared with peers [B] $ per barrel of oil equivalent tCO2e/kboe 60 50 40 a 30 b 20 10 2019 2020 2021 2
Slide 19: Focused pathways for sectoral decarbonisation
Differentiated Downstream, Renewables & Energy Solutions Focused pathways for sectoral decarbonisation 2023 - 2030 2030 - 2040 2040 - 2050+ Passenger road Strategic decarbonisation transport OIL PRODUCTS BIOFUEL SOLUTIONS ELECTRIC CHARGING ELECTRIC CHARGING BIOFUEL SOLUTIONS OIL PRODUCTS ELECTRIC CH
Slide 20: Evolving our product mix and reducing emissions
Differentiated Downstream, Renewables & Energy Solutions Evolving our product mix and reducing emissions Repurposing Reducing Absolute Scope 3 Oil Products [A] Energy & Chemicals parks oil product sales Million tonnes CO2e 2030 Ambition 569 15-20% reduction -9% High-grading Marketing network Growing
Slide 21: Lowering the net carbon intensity of the products we sell
Differentiated Downstream, Renewables & Energy Solutions Lowering the net carbon intensity of the products we sell Reducing oil Growing low carbon Net carbon intensity [A] product sales offerings (EV + biofuels) gCO2e/MJ 2030 Target 79 15-20% reduction -6.3% Growing renewable Developing carbon power
Slide 22: Investing in the energy transition
Capital Expenditure Investing in the energy transition Total cash capital Total cash capital expenditure in 2023 expenditure in 2024-2025 23% ~20% $10-15 Low Carbon Low Carbon Energy Solutions Energy Solutions billion in low-carbon $24.4 bn Non- $22-25 bn Non- Energy energy solutions Energy annually
Slide 23: Evolving our portfolio as the world transitions
A net zero emissions business by 2050 Evolving our portfolio as the world transitions Mix of sales per energy product 2016 – 2030 [A] Critical factors on the (%) path to net zero Policy & Advocacy Technology & Innovation Continued investment [A] Share of energy products sold, aggregated on energy ba
Slide 24: Profitably transitioning towards Net Zero by 2050
Profitably transitioning towards Net Zero by 2050 Delivering more value with less emissions Emissions from our own operations (Scope 1&2) Shareholder >6% p.a. absolute Halving Scope Eliminating distributions of 30-40% free cash flow growth 1 and 2 emissions routine flaring by 2025 [C] of CFFO throug
Slide 25: Appendix
Appendix Annual ESG Update 2024 | March 27 25
Slide 26: Disciplined, value-focused capital allocation
Appendix Disciplined, value-focused capital allocation Cash Capex Cash Capex after power dilutions FCF IRR hurdle rates 2023 Power $ billion 24-25 24-25 2025 [A] CMD 2023 Actual dilutions Integrated Gas 4 ~5 ~5 ~8 11% Upstream 8 ~8 ~8 ~10 15% Integrated Gas 13 ~13 ~13 17-18 and Upstream Marketing ex
Slide 27: Our climate commitments & progress
Appendix Our climate commitments & progress Actual Target/Ambition unit 2016 2021 2022 2023 2025 2030 2050 Emissions from our own operations [A] Million tonnes Routine flaring from upstream operations 1.1 0.2 0.1 0.1 Eliminated [B] N/A hydrocarbons flared Methane emissions intensity % 0.06% 0.05% 0.
Slide 28: Supporting the goals of the Paris agreement
Paris alignment Supporting the goals of the Paris agreement Shell’s Paris aligned targets Reasons they are aligned Derived from 1.5°C scenarios by the Intergovernmental Panel on Climate Change Cover short, medium, and long-term targets for all emissions, from production through to the use of our ene
Slide 29: Definitions
Appendix Definitions Metric Definition Cash capital expenditure Cash capital expenditure monitors investing activities on a cash basis, excluding items such as lease additions which do not necessarily result in cash outflows for the period. Cash capital expenditure comprises the following lines from
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