LONDON (ICIS)--Shell is now more aligned with the American Chemistry Council (ACC) after the US trade group welcomed in January the return of the US to the Paris Agreement to slow down climate change, the Anglo-Dutch energy major said on Wednesday.
The company is now also more in line with the European trade group Cefic, it added in its bi-annual advocacy report.
Shell spent at least $1.5m in 2020 to contribute towards ACC and Cefic’s budgets.
Despite potential for crude oil to contribute less to Shell's earnings in line with increased electrification of transport, the producer wants to retain its petrochemicals operations.
The company’s financing towards ACC and Cefic took in at least 16.5% of the total spent on advocacy, which stood at least at $19.1m.
Shell did not disclose exact amounts for its advocacy; for ACC, it said it had contributed in 2020 between $1m-2.5m, and for Cefic it said the figure stood at $500,000-1m.
Shell’s previous advocacy report for 2019 had concluded the company’s stance had 'some misalignment' with the views of both trade groups.
In the latest report, however, Shell backed ACC’s new stance on the Paris Agreement signed in 2015, which aims to slow down global warming by limiting the rise in temperatures to 1.5 degree Celsius by 2100, compared to pre-industrial levels.
The US trade group welcomed in January the executive order by President Joe Biden to re-join the Paris Agreement, from which the previous administration had decided to withdraw in 2017.
Apart from its current support for the Paris Agreement, Shell also praised ACC’s commitment to net-zero carbon dioxide (CO2) emissions, its support for carbon pricing policies, plastics recycling and carbon capture, utilisation and storage (CCUS) technologies.
However, Shell added: “ACC does not currently have a position on whether there should be direct regulation of methane emissions.”
Methane is a highly polluting gas of which the US Gulf Coast's petrochemicals industry is a large emitter.
Cefic, meanwhile, published its long-term strategy in 2020 declaring full alignment with the EU’s target of fully decarbonising the economy by 2050.
Its director general, Marco Mensink, however, said in an interview with ICIS in September 2020 the newly approved EU targets were “hugely challenging” to fulfil for the chemicals industry without more support from a stronger industrial policy.
Shell said it was aligned with Cefic as the trade group supports the Paris Agreement, net-zero by 2050, carbon pricing, a more circular economy, renewables, lower-carbon gases like hydrogen as well as methane emissions reduction.
“Cefic has stated support for recycling carbon from carbon dioxide and industrial waste gases as a means for the chemical industry to reduce the environmental footprint of chemicals and polymers,” it added.
Shell contributed financially to 36 advocacy groups in 2020; the full list can be seen in the 66-page report (page 9 of this document, opens PDF on new tab).
The highest contribution, at $10m-12.5m, was to the US American Petroleum Institute (API), although Shell concluded it had ‘some misalignment’ with it and urged the group “to take a more proactive and constructive approach” to the Paris Agreement.
Of the 36 groups, Shell has ‘some misalignment’ with seven; apart from API, the company also placed under this category the US National Association of Manufacturers (NAM), the Texas Oil & Gas Association (TXOGA), the US Chamber of Commerce, and WindEurope, among others.
With Australia's mining trade group Queensland Resources Council (QRC, $100,000-500,000 contribution), Shell concluded there was ‘material misalignment’ due to the group’s staunch opposition to the Paris Agreement.
Shell has left some trade groups in the past for the same reason; in 2019, it withdrew from the American Fuel & Petrochemical Manufacturers (AFPM), citing climate change policy differences.
The AFPM is the organiser of the International Petrochemical Conference (IPC), the key industry networking event in the Americas.
With the other 28, Shell has ‘alignment’ in objectives; in this category the company placed, including Cefic and ACC: Australian, Canadian, UK and European general and crude oil trade groups, as well as upcoming groups like Hydrogen Europe or aviation global groups.
The $19.1m total in advocacy was calculated taking the lowest end of the ranges for all companies, although excluding the bottom six for which the range stands at $0-50,000.
If all contributions had stood at the top of the ranges, Shell would have spent $36.9m in advocacy during 2020.
Thumbnail image shows a Shell service station. Source: Shell