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Shell aiming to cut Scope 1 and 2 emissions by half by 2030

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As reported by Reuters, Shell has set itself tougher emissions cutting targets, even as it reported a lower-than-expected 3Q21 profit of US$4.13 billion.

The oil major said it would cut absolute emissions from its operations and the electricity it uses, known as Scope 1 and 2 emissions, by half by 2030 compared with 2016.

The company has pledged to become a net zero emissions company by 2050, but has come under pressure to make faster progress, with a Dutch court ordering it in May to cut all of its emissions - including from the combustion of its products by customers, or Scope 3 - by 45% by 2030.

Shell is appealing the court ruling.

The company previously set a target to cut the carbon intensity of its products, meaning emissions by unit of energy produced rather than in absolute terms, by at least 6% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, compared to 2016 levels.

As previously flagged, Shell will distribute US$7 billion to its shareholders from next year after a US$9.5 billion deal to sell its US Permian assets to ConocoPhillips closes.

Its third-quarter adjusted earnings came in below an average analyst forecast provided by the company for a US$5.31 billion profit. Earnings were US$5.53 billion in the previous quarter and US$955 million a year ago.

Shell had previously flagged a US$400 million hit to third-quarter earnings from the damage caused by August's Hurricane Ida in the US and a boost to cash flows from soaring natural gas and electricity prices.

Gas and power prices surged this autumn as tight gas supplies have collided with strong demand in economies recovering from the COVID-19 pandemic.

Shell's oil and gas production dropped in the third quarter to 2.08 million boe/d as a result of the COVID-19 pandemic and hurricanes that forced offshore platforms to shut down.

Oil production fell 4% from the second quarter to 1.49 million bpd, while gas output declined 17% to 3.39 million cubic feet per day.

The company guided for its LNG production to rise to 8-8.6 million t in the fourth quarter.

Shell plans to invest around US$20 billion this year, compared with previous guidance for spending to stay below US$22 billion.

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