Vision of the future
Sinead Lynch is the Vice President of Low Carbon Fuels at Shell. She takes time out to talk about Shell’s approach to the energy transition and what she sees as the future for biofuels.
Hi Sinead, let’s dive right in: what is Shell trying to achieve with biofuels?
We have an ambitious strategy for our biofuels business but let me first give you some context. As you may know, Shell put forward its new strategy at the end of 2021 called ‘Powering Progress’. This sets out Shell’s strategy to accelerate the transition of our business purposefully and profitably. Our target is to become a net zero emissions energy business by 2050. To achieve this, we have set a new target to reduce absolute emissions from our operations (Scope 1 and 2) by 50% by 2030, compared with 2016 on a net basis. By delivering Powering Progress, we are determined to play a leading role in tackling climate change.
Sustainability is at the heart of our strategy, and sustainable biofuels, such as sustainable aviation fuel (SAF), renewable diesel, bioethanol, and renewable natural gas (both in the form of compressed natural gas and bioLNG) play an important part in achieving this ambition.
Biofuels are a part of a range of low carbon energy solutions we are seeking to provide to our transport customers. We are also providing electric vehicle charging (EV), hydrogen, and liquefied natural gas (LNG). Biofuels specifically will be especially important for harder to abate sectors. For the aviation, marine, and heavy-duty road transport sectors, we see biofuels as a critical lever in decarbonisation.
Achieving our 2050 net zero ambition means that by 2030, Shell would produce eight times more biofuels than we do today, as well as increase low carbon fuels sales to more than 10% of transport fuels (up from 3% in 2020). Moreover, we aim to produce around 2 million tonnes of SAF per year by 2025 and by 2030, have at least 10% of our global aviation fuel sales attributed to the sale of SAF.
Sustainable biofuels, as well as advanced and synthetic biofuels, are an essential part of the fuel offerings we are making to our customers to help them decarbonise.
These sound like ambitious targets. How will you go about achieving them?
What really helps our progress is that this is not a new business for us. Shell is already a big producer of biofuels. In 2021, Raízen, our joint venture with Cosan, produced around 2.5 billion litres of ethanol, and its first cellulosic ethanol plant produced 19 million litres of ethanol from sugarcane residues in that same year. We are excited to be scaling up 2G ethanol production in Raizen in the years to come.
We are also one of the biggest biofuel traders and blenders in the world. In 2021, our Trading and Supply business blended 9.1 billion litres of biofuels into Shell’s petrol and diesel worldwide.
Our strategy is to invest today in projects that use technologies that are commercial and can be scaled (like HEFA and RNG) but also in parallel invest in the de-risking of the advanced technologies that can convert the most abundant and sustainable feedstocks into the biofuels of the future.
In the US, we announced the start-up and production of renewable natural gas (RNG) at our first US biomethane facility, Shell New Energies Junction City in Oregon, in September 2021. The facility utilises locally sourced cow manure and excess agricultural residues to produce an expected 736,000 MMBtu a year of RNG.
In the Netherlands, we announced a final investment decision in 2021 to build an 820,000-tonnes-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam. Once built, the facility will be among the biggest in Europe to produce SAF and renewable diesel made from predominantly waste and residue feedstocks.
There is also a lot of activity as we seek to commercialise exciting new technologies that will provide even lower carbon fuels. We have signed an MoU with our partners SAS, Vattenfall and LanzaTech to jointly investigate the production of the world’s first synthetic SAF using the LanzaJetTM “Alcohol to Jet” technology on a large scale in Sweden. Pending FID, the goal would be for the new production facility to produce up to 50,000 tonnes of synthetic SAF annually.
To achieve our targets, therefore, we will leverage our commercialised technologies and assets, our world class trading and supply business, and our customer base, whilst investing and commercialising critical new technologies.
It sounds like you’re certainly busy. What challenges are you facing in all of this?
There are of course plenty of challenges, as is the way with all transformations! The energy transition is highly complex, and will require everyone, from the private sector to governments and civil society, to work together in a way we have not done before, to synchronise supply and demand and ensure the necessary infrastructure is in place. This is why Shell has embarked on its sectoral decarbonisation approach, where we aim to help customers who still depend on carbon-based energy products to address their emissions – in sectors such as aviation, heavy freight and shipping.
Key in this equation are governments. In order for all of society to move to net zero, we need governments to enable and support development of new decarbonisation solutions.
The EU has put in place ambitious targets and mandates, which we welcome. These provide clarity on the direction of travel in the EU and support investment. We would like to see clarity extended beyond 2030 to provide certainty of investment through the 2030s.
However, targets and mandates alone are not sufficient to incentivise investment.
We also need greater clarity and flexibility on what feedstocks can be used, all under robust sustainability guidelines. Diverse sustainable feedstock options as well as specific policy support for power to liquid fuels and recycled carbon fuels would enable long term goals to be set, provide investment certainty for synthetic fuels and develop robust feedstock supply chains.
Investments in new technologies, such as Shell’s IH2 technology, Power to Liquids and Waste to Jet to name just a few also need significant capital investment, as especially the early projects will carry technology risk. Support from governments in advancing these technologies can play an important part in companies investing in these.
Thank you for your time, Sinead, and for your insight into what biofuels mean for Shell. What keeps you going in this role and what is your hope for the future?
I believe we should always start with the ‘why’, why you (as a professional and a person) do what you do and why it matters. Once that is clear, it sets the framework for everything you do. I choose to do what I do because I believe that what I do in Shell can make a real difference to tackling climate change and that’s very important to me. I also know that I am surrounded by thoughtful people, in Shell and in our partners, with strong values and great behaviours who have that similar sense of belief and purpose.
Sustainable biofuels, advanced biofuels, and synthetic fuels have an important role to play in helping society to achieve net zero. I’m excited to play my part in that.
For more information and legal disclaimer please check here
Hi Sinead, let’s dive right in: what is Shell trying to achieve with biofuels?
We have an ambitious strategy for our biofuels business but let me first give you some context. As you may know, Shell put forward its new strategy at the end of 2021 called ‘Powering Progress’. This sets out Shell’s strategy to accelerate the transition of our business purposefully and profitably. Our target is to become a net zero emissions energy business by 2050. To achieve this, we have set a new target to reduce absolute emissions from our operations (Scope 1 and 2) by 50% by 2030, compared with 2016 on a net basis. By delivering Powering Progress, we are determined to play a leading role in tackling climate change.
Sustainability is at the heart of our strategy, and sustainable biofuels, such as sustainable aviation fuel (SAF), renewable diesel, bioethanol, and renewable natural gas (both in the form of compressed natural gas and bioLNG) play an important part in achieving this ambition.
Biofuels are a part of a range of low carbon energy solutions we are seeking to provide to our transport customers. We are also providing electric vehicle charging (EV), hydrogen, and liquefied natural gas (LNG). Biofuels specifically will be especially important for harder to abate sectors. For the aviation, marine, and heavy-duty road transport sectors, we see biofuels as a critical lever in decarbonisation.
Achieving our 2050 net zero ambition means that by 2030, Shell would produce eight times more biofuels than we do today, as well as increase low carbon fuels sales to more than 10% of transport fuels (up from 3% in 2020). Moreover, we aim to produce around 2 million tonnes of SAF per year by 2025 and by 2030, have at least 10% of our global aviation fuel sales attributed to the sale of SAF.
Sustainable biofuels, as well as advanced and synthetic biofuels, are an essential part of the fuel offerings we are making to our customers to help them decarbonise.
These sound like ambitious targets. How will you go about achieving them?
What really helps our progress is that this is not a new business for us. Shell is already a big producer of biofuels. In 2021, Raízen, our joint venture with Cosan, produced around 2.5 billion litres of ethanol, and its first cellulosic ethanol plant produced 19 million litres of ethanol from sugarcane residues in that same year. We are excited to be scaling up 2G ethanol production in Raizen in the years to come.
We are also one of the biggest biofuel traders and blenders in the world. In 2021, our Trading and Supply business blended 9.1 billion litres of biofuels into Shell’s petrol and diesel worldwide.
Our strategy is to invest today in projects that use technologies that are commercial and can be scaled (like HEFA and RNG) but also in parallel invest in the de-risking of the advanced technologies that can convert the most abundant and sustainable feedstocks into the biofuels of the future.
In the US, we announced the start-up and production of renewable natural gas (RNG) at our first US biomethane facility, Shell New Energies Junction City in Oregon, in September 2021. The facility utilises locally sourced cow manure and excess agricultural residues to produce an expected 736,000 MMBtu a year of RNG.
In the Netherlands, we announced a final investment decision in 2021 to build an 820,000-tonnes-a-year biofuels facility at the Shell Energy and Chemicals Park Rotterdam. Once built, the facility will be among the biggest in Europe to produce SAF and renewable diesel made from predominantly waste and residue feedstocks.
There is also a lot of activity as we seek to commercialise exciting new technologies that will provide even lower carbon fuels. We have signed an MoU with our partners SAS, Vattenfall and LanzaTech to jointly investigate the production of the world’s first synthetic SAF using the LanzaJetTM “Alcohol to Jet” technology on a large scale in Sweden. Pending FID, the goal would be for the new production facility to produce up to 50,000 tonnes of synthetic SAF annually.
To achieve our targets, therefore, we will leverage our commercialised technologies and assets, our world class trading and supply business, and our customer base, whilst investing and commercialising critical new technologies.
It sounds like you’re certainly busy. What challenges are you facing in all of this?
There are of course plenty of challenges, as is the way with all transformations! The energy transition is highly complex, and will require everyone, from the private sector to governments and civil society, to work together in a way we have not done before, to synchronise supply and demand and ensure the necessary infrastructure is in place. This is why Shell has embarked on its sectoral decarbonisation approach, where we aim to help customers who still depend on carbon-based energy products to address their emissions – in sectors such as aviation, heavy freight and shipping.
Key in this equation are governments. In order for all of society to move to net zero, we need governments to enable and support development of new decarbonisation solutions.
The EU has put in place ambitious targets and mandates, which we welcome. These provide clarity on the direction of travel in the EU and support investment. We would like to see clarity extended beyond 2030 to provide certainty of investment through the 2030s.
However, targets and mandates alone are not sufficient to incentivise investment.
We also need greater clarity and flexibility on what feedstocks can be used, all under robust sustainability guidelines. Diverse sustainable feedstock options as well as specific policy support for power to liquid fuels and recycled carbon fuels would enable long term goals to be set, provide investment certainty for synthetic fuels and develop robust feedstock supply chains.
Investments in new technologies, such as Shell’s IH2 technology, Power to Liquids and Waste to Jet to name just a few also need significant capital investment, as especially the early projects will carry technology risk. Support from governments in advancing these technologies can play an important part in companies investing in these.
Thank you for your time, Sinead, and for your insight into what biofuels mean for Shell. What keeps you going in this role and what is your hope for the future?
I believe we should always start with the ‘why’, why you (as a professional and a person) do what you do and why it matters. Once that is clear, it sets the framework for everything you do. I choose to do what I do because I believe that what I do in Shell can make a real difference to tackling climate change and that’s very important to me. I also know that I am surrounded by thoughtful people, in Shell and in our partners, with strong values and great behaviours who have that similar sense of belief and purpose.
Sustainable biofuels, advanced biofuels, and synthetic fuels have an important role to play in helping society to achieve net zero. I’m excited to play my part in that.
For more information and legal disclaimer please check here
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