Innovation, profit and purpose on the road to net zero

As a highly regarded scientist and Chair of UK Research and Innovation, do you think there is enough investment in the right technology and is there enough innovation taking place to achieve net zero by 2050?

The first point to make is that a collective effort is needed from industry, consumers and government if the world is to succeed in achieving net zero. If we then look at industry alone, it could be more successful if it had a clear mission: electrify as much as possible, make it renewable as much as possible, seize opportunities to remove the carbon dioxide in the atmosphere, for example by direct air capture, and use carbon capture and storage (CCS) to create things like low-carbon hydrogen. The world is going to have to electrify an awful lot more sources of power than it previously has. This electricity can then be provided as zero carbon from renewables or from nuclear or, indeed through other sources. But it will ultimately become inefficient to use a source of energy, a “fuel”, to create electricity. This is when the world will need a next-generation energy step: the development of low-carbon molecular solutions that can power, be shipped, or be stored over long time periods. An obvious alternative to hydrocarbons in the longer term is hydrogen and in the short term it’s biofuels. The world also needs to work towards the development of low-carbon hydrogen, and this means having to push on with CCS. The fight against climate change is urgent. In the absence of clear signals from the demand side, the danger is the tendency to keep adding to the possibilities. The world should focus on what solutions will get society as far along the way to net zero as possible, such as renewables, biofuels, hydrogen, and CCS.

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In some countries, many people have little or no access to modern forms of energy, preventing their economic progress. But the world must apparently achieve net-zero through low- and zero-carbon energy. Can the world achieve this? It is hard to see how the world can both decarbonise and deliver a big increase in energy supply so that less energy-rich people can enjoy opportunities for development, without the continued use of oil and gas. If the world stops using oil and gas too quickly, the reality is that energy will become much more expensive. This will delay the development of those countries which need to enjoy access to affordable energy that other countries, like those in Europe, have taken for granted for most of the last 100 years. The good news is that the world can continue to become more prosperous by using oil and gas, while investing in low-carbon energy sources and working to decarbonise sector-by-sector. That prosperity will increase energy demand, and low-carbon products can supply the increase in demand. Society can also increasingly use fossil fuels that produce less carbon when they are burned or extracted. People must also think about how to use less energy and this can come about through innovation and efficiencies. People can make lifestyle choices and stop doing certain things that are very energy intensive. When it comes to the sectors that are hard to decarbonise, CCS and direct air capture will potentially become very important. Looking at how the energy transition is progressing, what more do you think needs to be done by governments, business, and society? While collective action will get the world to net zero faster, society and business shouldn’t wait for governments to shape the future. To help tackle climate change, Shell needs to maintain the conviction to make things happen. We must do this with innovation and where our weight can have an impact. Some things are more obviously within our skill set than others. We first need to understand what can help make our customers transition quicker and then determine how we can continue to satisfy their need for affordable, reliable, and convenient energy, with less and less carbon. Shell has to be selective in how we help the world to decarbonise. We must work incredibly hard to ensure that what we do passes the tests of shareholder return, customer satisfaction and low-carbon emissions. Can workers in the oil and gas industry expect to develop new careers in the renewables industry using their traditional skills? Up to a point. There are areas that traditional oil and gas businesses know about and that they are good at. The skills that our people have obtained working on deep-water platforms can be helpful to the building of offshore wind farms. What our reservoir engineers have learned can be applied to carbon capture and storage, and our traders are already working out how they would trade green electrons. Then, there are some clean, green energy areas where it may be prudent to invest in developing new skills. One thing I am struck by is the strength of the intellect that exists at Shell. I am incredibly privileged to work alongside such talented and bold people. People who are not afraid to think outside the box and face challenges head on. I firmly believe that Shell’s people have a real and honest commitment to the energy transition. I admire that greatly.