Shell Singapore outlines path to transform its business in the country
Nov 10, 2020
Shell Singapore wants to transform its business in the country to thrive through the energy transition.
To this end, it has outlined a 10-year plan for how the company could make significant investments in people, assets and capabilities to repurpose its core business and aim to cut its own CO2 emissions here by half within a decade.1 This builds on Shell’s overarching ambition to be a net-zero emissions energy business by 2050 or sooner.
“We welcome Singapore’s goal towards net zero emissions as a country. As a company which has had a long presence in this country, Shell Singapore has a key role to play in supporting the Government’s ambitions. Today, our extensive presence in Singapore’s energy sector carries with it a carbon footprint. Our businesses in Singapore must evolve and transform, and we must act now if we are to achieve our ambition to thrive through the energy transition. Our decisive action today will help Shell in Singapore stay resilient and build a cleaner, more sustainable future for all of us,” said Aw Kah Peng, Chairman of Shell Companies in Singapore.
We will accelerate this transition through three pillars:
- Repurpose our core by building on our strengths of an integrated business here and focus our manufacturing assets to provide more energy transition resilient products;
- Provide low-carbon solutions for customers in the sectors which are also important pillars of Singapore’s economy – power, mobility, shipping, aviation, trading; and
- Partner with key stakeholders to bring about sustainable change.
We are transforming our manufacturing business, making it fit for the new future, where our Pulau Bukom Manufacturing Site will be one of Shell’s approximately six energy and chemicals parks. Bukom will pivot from a crude-oil, fuels-based product slate towards new, low-carbon value chains. We will reduce our crude processing capacity by about half and aim to deliver a significant reduction in CO2 emissions. Repurposing Bukom will not only involve significant changes in our refinery configuration, but also increased investments in our assets, and critically, in our people. A site-wide digitalisation programme that aims to transform the way we operate is already underway. Work has also commenced to study the production of products that are resilient to the energy transition, such as biofuels, and more specialities, like bitumen. We are also looking at the possibility of different future feedstocks that are based on greater circularity and renewable raw materials, such as recycled chemicals.
The changes that will have to take place in our businesses will have a corresponding effect on our staff numbers. As Bukom transforms and becomes smaller and smarter, the resizing of operations will result in fewer jobs but more highly skilled jobs as digitalisation and automation progress. This will be a multi-year journey.
We are evolving our business to drive decarbonisation and partnering with key stakeholders on broader energy transition initiatives:
- We are looking to expand our solar footprint, including looking into utility-scale solar generation. This builds on the more than 3MWp we have already built at our Pandan distribution terminal, Seletar aviation site and Tuas Lubricants Plant.
- By 2030, we aim to have an extensive network of electric vehicle charging options for our customers, all within a short drive, from their home, workplace or when they are on the go. We believe there are opportunities to redefine mobility in Singapore, to be cleaner and smarter.
- In Shipping, our LNG bunkering joint venture, FueLNG, will scale up with the arrival of Singapore’s first bunkering vessel in late 2020, contributing to Singapore’s ambition to decarbonise shipping.
- Given our extensive global experience trading environmental products, we are engaging our customers in Singapore to provide carbon neutral solutions to meet their climate objectives.
- We are working with the National Environment Agency on a joint feasibility study for the set-up of waste segregation facilities and plastic pyrolysis plants to recycle Singapore’s plastic waste.
“Singapore is a key hub for Shell. These decisions show how determined we are to remain a part of Singapore’s energy future, just as we have been partners in economic development over the decades,” said Huibert Vigeveno, Downstream Director and member of the Executive Committee of Shell. “The transformation of our business in Singapore, and in particular our largest refinery on Pulau Bukom into one of our approximately six energy and chemicals parks, is crucial to Shell's ambition of becoming a net-zero emission energy business by 2050 or sooner, in step with society and our customers.”
The Pulau Bukom Manufacturing Site, one of Shell’s approximately six energy and chemicals parks, was selected as the first Shell site globally to pilot a Digital Twin technology.
By 2030, we aim to have an extensive network of electric vehicle charging options for our customers, all within a short drive, from their home, workplace or when they are on the go.
Head, Southeast Asia and South Asia Media Relations
Shell Spokesperson, Asia-Pacific
Shell Spokesperson, Asia-Pacific
Notes to Editors
- Number of trees is based on a ‘global average tree’, of approximately 20cm diameter at breast height. The quantity of carbon stored in such a tree is estimated from peer-reviewed studies to estimate the global tree count (Crowther et al. 2015) and global carbon storage in tree vegetation (Erb et al. 2017): ~3 trillion trees and ~400 Gt of carbon. The actual quantity of carbon stored in a specific tree is dependent on species, soil, climate, maturity and other factors, which are not fully captured here.
- Shell has announced a new ambition to be a net-zero emissions energy business by 2050, or sooner if possible, in step with society. We will work towards this ambition in three ways:
- We have significantly raised our Net Carbon Footprint ambition so that it is in step with the large sections of society that want to achieve a 1.5° Celsius future. Shell’s long-term ambition is to reduce the Net Carbon Footprint of the energy products we sell by 65% by 2050, instead of 50%. And our medium-term ambition is to reduce the Net Carbon Footprint of the energy products 30% by 2035, in step with society, instead of 20%.
- We also have a new ambition to achieve net-zero operational emissions (Scope 1 and 2) by 2050 or sooner, which includes the emissions associated with manufacturing and bringing Shell’s energy and non-energy products to the market.
- Finally, as a business that supplies energy, we will work with sectors which use energy to help identify and enable decarbonisation pathways for them to follow towards a net-zero emissions future. And for those customers who still have emissions as they near 2050, we will work ever more intensely with them to find a way to mitigate those emissions.
The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this release, “Shell”, “Shell Group” and “Royal Dutch Shell” are sometimes used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general. Likewise, the words “we”, “us” and “our” are also used to refer to Royal Dutch Shell plc and its subsidiaries in general or to those who work for them. These terms are also used where no useful purpose is served by identifying the particular entity or entities. ‘‘Subsidiaries’’, “Shell subsidiaries” and “Shell companies” as used in this release refer to entities over which Royal Dutch Shell plc either directly or indirectly has control. Entities and unincorporated arrangements over which Shell has joint control are generally referred to as “joint ventures” and “joint operations”, respectively. Entities over which Shell has significant influence but neither control nor joint control are referred to as “associates”. The term “Shell interest” is used for convenience to indicate the direct and/or indirect ownership interest held by Shell in an entity or unincorporated joint arrangement, after exclusion of all third-party interest.
Analogies used in this release are for illustrative purposes only. Shell does not make any representation or warranty, whether express or implied, regarding the accuracy, completeness, reliability or relevance of the analogies, and is not liable in any way for any loss, damages or expenses arising out of, or in connection with the calculation of the analogies, or with the use of or claims made regarding such analogies.
This release contains data and analysis from Shell’s Sky scenario. Unlike Shell’s previously published Mountains and Oceans exploratory scenarios, the Sky scenario is based on the assumption that society reaches the Paris Agreement’s goal of holding the rise in global average temperatures this century to well below two degrees Celsius (2°C) above pre-industrial levels. Unlike Shell’s Mountains and Oceans scenarios, which unfolded in an open-ended way based upon plausible assumptions and quantifications, the Sky scenario was specifically designed to reach the Paris Agreement’s goal in a technically possible manner. These scenarios are a part of an ongoing process used in Shell for over 40 years to challenge executives’ perspectives on the future business environment. They are designed to stretch management to consider even events that may only be remotely possible. Scenarios, therefore, are not intended to be predictions of likely future events or outcomes.
Additionally, it is important to note that as of 10 November 2020, Shell’s operating plans and budgets do not reflect Shell’s Net-Zero Emissions ambition. Shell’s aim is that, in the future, its operating plans and budgets will change to reflect this movement towards its new Net-Zero Emissions ambition. However, these plans and budgets need to be in step with the movement towards a Net-Zero Emissions economy within society and among Shell’s customers.
Also, in this release we may refer to Shell’s “Net Carbon Footprint”, which includes Shell’s carbon emissions from the production of our energy products, our suppliers’ carbon emissions in supplying energy for that production and our customers’ carbon emissions associated with their use of the energy products we sell. Shell only controls its own emissions. The use of the term Shell’s “Net Carbon Footprint” is for convenience only and not intended to suggest these emissions are those of Shell or its subsidiaries.
This release contains forward-looking statements (within the meaning of the U.S. Private Securities Litigation Reform Act of 1995) concerning the financial condition, results of operations and businesses of Royal Dutch Shell. All statements other than statements of historical fact are, or may be deemed to be, forward-looking statements. Forward-looking statements are statements of future expectations that are based on management’s current expectations and assumptions and involve known and unknown risks and uncertainties that could cause actual results, performance or events to differ materially from those expressed or implied in these statements. Forward-looking statements include, among other things, statements concerning the potential exposure of Royal Dutch Shell to market risks and statements expressing management’s expectations, beliefs, estimates, forecasts, projections and assumptions. These forward-looking statements are identified by their use of terms and phrases such as “aim”, “ambition”, ‘‘anticipate’’, ‘‘believe’’, ‘‘could’’, ‘‘estimate’’, ‘‘expect’’, ‘‘goals’’, ‘‘intend’’, ‘‘may’’, ‘‘objectives’’, ‘‘outlook’’, ‘‘plan’’, ‘‘probably’’, ‘‘project’’, ‘‘risks’’, “schedule”, ‘‘seek’’, ‘‘should’’, ‘‘target’’, ‘‘will’’ and similar terms and phrases. There are a number of factors that could affect the future operations of Royal Dutch Shell and could cause those results to differ materially from those expressed in the forward-looking statements included in this release, including (without limitation): (a) price fluctuations in crude oil and natural gas; (b) changes in demand for Shell’s products; (c) currency fluctuations; (d) drilling and production results; (e) reserves estimates; (f) loss of market share and industry competition; (g) environmental and physical risks; (h) risks associated with the identification of suitable potential acquisition properties and targets, and successful negotiation and completion of such transactions; (i) the risk of doing business in developing countries and countries subject to international sanctions; (j) legislative, fiscal and regulatory developments including regulatory measures addressing climate change; (k) economic and financial market conditions in various countries and regions; (l) political risks, including the risks of expropriation and renegotiation of the terms of contracts with governmental entities, delays or advancements in the approval of projects and delays in the reimbursement for shared costs; (m) risks associated with the impact of pandemics, such as the COVID-19 (coronavirus) outbreak; and (n) changes in trading conditions. No assurance is provided that future dividend payments will match or exceed previous dividend payments. All forward-looking statements contained in this release are expressly qualified in their entirety by the cautionary statements contained or referred to in this section. Readers should not place undue reliance on forward-looking statements. Additional risk factors that may affect future results are contained in Royal Dutch Shell’s Form 20-F for the year ended December 31, 2019 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this release and should be considered by the reader. Each forward-looking statement speaks only as of the date of this release, 10 November 2020. Neither Royal Dutch Shell plc nor any of its subsidiaries undertake any obligation to publicly update or revise any forward-looking statement as a result of new information, future events or other information. In light of these risks, results could differ materially from those stated, implied or inferred from the forward-looking statements contained in this release.
We may have used certain terms, such as resources, in this release that the United States Securities and Exchange Commission (SEC) strictly prohibits us from including in our filings with the SEC. Investors are urged to consider closely the disclosure in our Form 20-F, File No 1-32575, available on the SEC website www.sec.gov.
1 The reduction is in Scope 1 and 2 emissions and for 100% Shell-controlled operations in Singapore. The reduction is measured against the baseline year of 2018.
2 Singapore has a total of about seven million urban trees, of which six million of them are managed by the National Parks Board. ‘Urban trees’ do not include trees in the nature parks and reserves. See Notes to the Editor at the end of the release for background on the analogy of trees.