Shell, Baker Hughes Partner on Net-zero Targets & Solutions

Oil major Royal Dutch Shell’s clean energy unit will provide renewable energy credits (REC) to oilfield firm Baker Hughes’ facilities in United States for a two-year period, the companies said on Wednesday. Baker Hughes will provide low-carbon technology solutions for Shell’s LNG fleet.

The RECs are tradable instruments substantiating that electricity has been generated from renewable energy sources.

The move comes as climate activists, investors, banks and some governments mount pressure on oil and gas companies to announce net zero emission targets and explore ways to move away from traditional oil and gas businesses, to tackle global warming and address climate change.

This year, Shell announced its net-zero strategy to reduce net-carbon intensity by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using a baseline of 2016. Shell also announced investments worth US$2 billion and US$3 billion on renewables and energy solutions annually to help it attain a net zero status by 2050.

Yet, the Anglo-Dutch oil and gas giant remains largely dependant on fossil fuels. The company recently came under fire for its unwillingness to regulate its Scope 3 emissions, i.e. the emissions released by the consumers of its products, such as utility companies and gas stations that are providers of electricity and gasoline.

With the latest agreement, Baker Hughes’ global renewable electricity consumption is expected to grow 2% to 24% annually, the company said in a statement.

The agreement includes options for supplying up to 100 Gigawatt hours (GWh) of renewable power for Baker Hughes’ facilities in Europe and developing an on-site solar solution for its chemical blending plant in Singapore.

“The urgency around the energy transition to meet Paris Agreement goals requires collaboration to accelerate actionable steps to reduce emissions in various ways,” said Lorenzo Simonelli, Baker Hughes chairman and chief executive officer.

“Shell and Baker Hughes both have clear ambitions to decarbonize and have already made progress through technical innovations. I’m proud of the work that has been done so far, and with this new agreement, we are taking it one step further,” Harry Brekelmans, projects and technology director at Shell, said.