Royal Dutch Shell is launching a $3oom forestry programme in an attempt to reduce its emissions, at a time when an increasing number of oil companies are investing in carbon offset plans to comply with climate goals. The energy company will spend $3oom over the next three years on projects to store carbon, including large forests in the Netherlands and Spain, and will start offering motorists the option of purchasing carbon offsets when they buy petrol or diesel at the pump. Maarten Wetselaar, Shell’s director of gas and new energy, said that these carbon offset projects were a new business opportunity for Shell, as well as a way to meet its climate targets.
“We believe that over time we will be building a business, because these carbon credits will become more valuable as carbon becomes more constrained,” he said. “How profitable the business will be is a big question, because that market is just so immature.” Shell recently adopted a target of cutting its net carbon footprint by 2-3 percent in 2021, compared with 2016 levels, which includes emissions from the products it sells.
The company plans to generate carbon credits from the forest projects, then sell these credits on to customers buying its oil and gas products or apply the credits to its own operations to lower its carbon footprint.’The hole that this initiative tries to plug, is that there will still be a lot of people driving gasoline and diesel cars for a long time to come.”Maarten Wetselaar, Shell
The move comes as a growing number of oil companies are investing in ways to store carbon dioxide, often referred to as “carbon offset” schemes because these can offset a company’s inherent emissions. Italian oil group Eni recently announced it will plant large forests in Africa to help mop up its emissions, while BP has invested in forest offset schemes in the US and China.
Because plants and trees absorb carbon dioxide as they grow, restoring forests and other natural areas are considered one of the simplest ways to store carbon. However, the voluntary market for carbon credits based on forestry projects has long faced concerns about its lack of transparency, because many projects in developing countries are hard to monitor, and Shell’s move was criticised by some environmental groups.