As the world’s largest energy consumer and carbon emitter, the top producer of renewable energy as well as the leader in electric vehicle manufacturing and adoption, China is an important part of the global climate challenge and solution. China’s pledge in 2020 to achieve peak emissions before 2030 and carbon neutrality by 2060 (the 3060 targets) is a defining moment in the global decarbonisation journey towards a more sustainable future.

Building a net-zero energy system in China by 2060 is hugely challenging, not least because China’s economy – and energy demand – continues to grow, even as the country seeks to decarbonise. However, Shell believes it is economically and technically possible for China to achieve its ambitions — if it acts swiftly with a goal-oriented approach. But the window for success is quickly closing. Key actions to be taken to make progress this decade to put China on the pathway to carbon-neutrality by 2060 are:

1. Invest in reliable, renewables-based electricity networks.
2. Position China as the market leader in low-carbon manufacturing.
3. Demonstrate technologies that transform heavy industry through hydrogen, bioenergy and CCUS.
4. Begin an orderly transition out of coal.
5. Accelerate action through integrated policies, sectoral coalitions and cities as incubators of change.

The scenario Sketch sets out a deep and rapid decarbonisation pathway which relies on electrifying as much of the economy as possible with low-carbon and no-carbon sources of power generation. Low-carbon hydrogen and biofuels will be needed for hard-to-electrify sectors. To realize its full potential for energy efficiency, China will also need to drive consumer and business choices towards low-carbon alternatives, while massively scaling up its carbon capture, utilisation and storage (CCUS) capacity.

To be more specific, in order to achieve the 2060 goal, China needs to: 

Accelerate clean technologies

1. Triple electricity generation for end use.
2. Quadruple the size of the electricity system for end use and hydrogen production.
3. Increase wind and solar’s share of the energy mix to 80%.
4. Raise hydrogen’s share of final energy consumption from negligible today to 16%.
5. Increase the use of bio-resources for energy eightfold and significantly raise the use of biomass commercially. 

Support energy-efficient and low-carbon choices

6. Invest in energy efficiency improvements to halve the energy intensity of the economy over the next four decades.
7. Ramp up the government-led carbon price by at least fourfold between 2030 and 2060.

Remove carbon emissions

8. Scale up CCUS capacity by more than 400-fold in the next four decades.

Mallika Ishwaran, Chief Economist, Shell International said: “China is critical to the world achieving the goals of the 2015 Paris Climate Agreement. The 2060 carbon-neutrality target is challenging, but it also creates opportunities – to position China as the global leader in low carbon manufacturing. With early and systematic action, China can deliver better environmental and social outcomes for its citizens while being a force for good in the global fight against climate change.”

Jason Wong, Executive Chairman of Shell Companies in China said: “Our view, that it is economically and technically possible for China to achieve its goal, is informed by deep analysis, as well as our experience and long history of serving China’s energy needs. Shell’s Powering Progress strategy – to be a net-zero emissions energy business by 2050, in step with society – positions us well to provide the clean, sustainable energy solutions that China needs to fulfil its net-zero emissions pledge and vision of an ecological civilization.”

View full version of Shell Scenarios China Sketch at

Notes to editors:

About Shell in China:

All of Shell Group's core businesses have grown considerably in China. Shell works with PetroChina and CNOOC to develop onshore and offshore oil and gas resources at home and abroad, including the Changbei Onshore Gas Project, developed in collaboration with PetroChina, to provide the energy needed for China's rapid economic development. Shell is also a leading supplier of LNG in China.

Shell operates a retail network of more than 1,700 gas stations in China through joint ventures and sole proprietorships, with more than 2,000 EV charging points. As one of the leading international lubricant and bitumen suppliers in China, Shell has 5 lubricant blending plants and 1 grease production plant in China. Shell is also operating a world-class petrochemical plant in the Daya Bay Area of Huizhou City, Guangdong Province, in a joint venture with CNOOC.

Shell Energy (China) Co., Ltd. is an important part of Shell's global trading network, providing Chinese clients with a competitive and diversified LNG portfolio, CO2 emissions management and strategic solutions. Shell Ventures has a dedicated team in China to accelerate innovation in the energy and mobility sector by investing in disruptive technologies and business models outside the Shell system.

About Powering Progress:

In early 2021, Shell set out its Power Progress strategy with goals of generating shareholder value, achieving net-zero emissions, powering lives and respecting nature. Powering Progress supports the most ambitious goal of the Paris Agreement on climate change to limit the global temperature rise to 1.5° Celsius. Shell set out details of how it will achieve its target to be a net-zero emissions energy business by 2050, in step with society’s progress towards achieving net zero. Powered by growth in its customer-facing businesses Shell will accelerate transformation into a provider of net-zero emissions energy products and services. Learn more: https://www.shell.com/media/news-and-media-releases/2021/shell-accelerates-drive-for-net-zero-emissions-with-customer-first-strategy.html

Enquiries:

Media China: SCHINA-Spokesperson@shell.com

Cautionary note:

This scenario starts with data from Shell’s Sky scenario. In developing this scenario, we have assumed that China’s energy system reaches net-zero CO₂ by 2060, consistent with President Xi Jinping’s statement to the United Nations General Assembly in September 2020. We then work back to see how this could occur. Of course, there are many possible paths for China to travel to a net-zero CO₂ energy system, but this is what we believe to be a technically possible path while maintaining a growing Chinese economy. While this scenario is more aggressive in its goal and assumptions than our Sky scenario, we believe, while extremely challenging it is still today technically possible. However, we believe the window for success is quickly closing and without significant action it may take longer for China to achieve a net-zero CO₂ energy system.

Shell scenarios, including this scenario, should not be confused with Shell strategy or business plan. When developing Shell’s strategy, our scenarios are only one variable among many that we consider. Ultimately, whether society meets its goals to decarbonise, is not within Shell’s control. While we intend to travel this journey in step with society, only governments can create the framework for success.

Shell’s operating plan, outlook and budgets are forecasted for a ten-year period and are updated every year. They reflect the current economic environment and what we can reasonably expect to see over the next ten years. Accordingly, Shell’s operating plans, outlooks, budgets and pricing assumptions do not reflect our net-zero emissions target. In the future, as society moves towards net-zero emissions, we expect Shell’s operating plans, outlooks, budgets and pricing assumptions to reflect this movement.

The companies in which Royal Dutch Shell plc directly and indirectly owns are separate legal entities. In this announcement “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 announcement to 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. This announcement 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 announcement, 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, or 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 announcement 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, 2021 (available at www.shell.com/investor and www.sec.gov). These risk factors also expressly qualify all forward-looking statements contained in this announcement and should be considered by the reader. Each forward-looking statement speaks only as of the date of this announcement January 17, 2022. 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 announcement. We may have used certain terms, such as resources, in this announcement that the U.S. 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.