United Kingdom – Oil giant Shell has revealed its intention to invest up to $1 billion yearly in hydrogen and carbon capture and storage (CCS) technologies in 2024 and 2025, marking a significant step toward decarbonization.
The majority of the capital investment will go toward areas like Northwest Europe, the Middle East, and North America, where Shell already has a presence, where policies are in place, where consumer demand is anticipated to be strong, and where a road to profitability is clear.
The development of these technologies requires more robust legislative and regulatory backing, according to Shell’s Downstream Director Huibert Vigeveno. Vigeveno used the US Inflation Reduction Act (IRA), which provides tax credits and subsidies for green hydrogen production and CCS projects, as an example. The IRA supports the commercial viability of such ventures by offering tax credits of up to $3 for each kilogram of green hydrogen produced.
Vigeveno touted the Holland Hydrogen 1 project in the Netherlands as a hydrogen production facility that would obtain its energy from a Shell offshore wind farm, while specifics on the percentage of financing given to hydrogen and CCS were not published.
Energy transition
Shell’s investment approach is in line with its goal to provide special attention to industries that are difficult to regulate, such as biofuels and electric vehicles, where lucrative prospects for emission reduction exist. While the company is aware that the path to a low-carbon future won’t be straight, it nevertheless wants to position itself as a reliable and successful investment case for the duration of the energy transition.
In early 2024, Shell is anticipated to give an update on its energy transition strategy, explaining its all-encompassing strategy to combating climate change and attaining long-term sustainability goals.
