Shell sees its future in negative emissions

Climate Models. Reaching global climate targets calls for removing large amounts of greenhouse gases from the atmosphere. The possibilities for doing this are limited. Who has a right to these so-called ‘negative emissions’, asks Ina Möller.

In May 2021, the Dutch judicial system made international headlines with its verdict on Milieudefensie vs. Royal Dutch Shell. In this one-of-a-kind climate case, a group of civil society organisations took a multinational oil and gas corporation to court because their business model contributes to future climate change. The court agreed with this and sentenced Shell to align its policies with a more ambitious emissions reductions pathway. But in their verdict, they also agreed with the oil company that in realizing this pathway, it should be up to Shell to decide how emissions would be reduced.

While Milieudefensie argued that the only safe way of limiting climate change was to stop emitting greenhouse gases and divesting from coal, oil and gas, Shell argued that there was no consensus on the need to stop using fossil fuels. By pointing to models published by the Intergovernmental Panel on Climate Change (IPCC), Shell could show that even the most stringent scenarios include 9%-61% of oil and gas in the global energy mix of 2050. By demonstrating that its own emissions scenario was compatible with both the IPCC and the goals of the Paris Agreement, Shell convinced the court that divesting from fossil fuels was not the only way forward.

How do Shell and the IPCC envision reaching global climate targets while still using fossil fuels? One important answer to this question lies in the term ‘negative emissions’.

Emissions keep increasing

For a long time, climate policy was concerned primarily with ‘positive emissions’, the release of greenhouse gases through the burning of fossil fuels. Positive emissions contributed to rising temperatures and reducing these was the key focus in climate change policy. But because not much changed and emissions kept increasing, it became more and more difficult for climate models to reach ambitious temperature targets.

Climate modelers thus needed to find a way of still achieving these targets, without drastically changing to the energy system. As a result, they turned their attention to the ‘negative’ part of the emissions accounting sheet, where man-made carbon dioxide emissions could be re-absorbed from the atmosphere through technology and changes in land-use.

The worldwide capacity for removing CO₂ is limited

Carbon dioxide removal is usually imagined through a range of large-scale interventions, including afforestation, the combustion of biomass with carbon capture and storage, and the use of machines to filter CO₂ from the atmosphere. In the latest IPCC report, climate models that limit warming to 2 degrees or lower estimate that these interventions will absorb 188-1520 gigatons of CO₂ between 2020 and 2100. To put this into perspective, in 2020, the entire country of China emitted about 10 gigatons of CO₂, while the global collection of forests absorbs about 7.6 gigatons of CO₂ per year.

The Sky Scenario

Similar estimates are made by Shell. In Shell’s Sky scenario, the corporation envisions the construction of 10,000 large-scale carbon-capture and storage facilities that, in combination with a growing use of biomass feedstock and afforestation of an area the size of Brazil, would help achieve the 1.5 degree target while allowing for the use of fossil fuels to meet growing energy demands.

Given the parallels between the IPCC’s and Shell’s scenarios, is Shell right in arguing that it can use future negative emissions to compensate for the climate impact of fossil fuels? The global capacity to remove carbon dioxide is limited. And removing CO₂from the atmosphere is vastly more difficult than not putting it there in the first place. It requires energy, water, land and money. And given the limited economic incentives for CO₂removal, it is likely that the majority of this global clean-up action will need to be paid for by the public. In the IPCC’s scenarios, negative emissions are therefore consistently used for offsetting so-called residual, or ‘hard-to-abate’ emissions, meaning those emissions that are otherwisereally difficultto get rid of.

The definition and distribution of these residual emissions is political. There is currently no consensus about what or whose emissions are considered ‘hard-to-abate’, and who has a right to continue emitting. And as long as individual companies like Shell claim such residual emissions for themselves, the limited capacity available for absorbing CO₂(a number that is still highly unclear), will no doubt be exceeded. It is therefore imperative that both modelers and policy makers are crystal clear about what they mean by residual emissions, and who they think has a right to claim these. Without a common understanding of how the pie should be divided, large emitters can continue to delay emissions reductions, and no-one can hold them accountable for it.