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Shell’s 2Q results saw significant developments in LNG, contributing to approximately half of its 20-30% sales growth ambitions. While Shell continues to frame LNG as a decarbonisation lever, its impact will be minimal. Set-backs in biofuels highlight a broader issue with Shell’s strategy; Shell will struggle to meet its emission intensity target without a material use of offsets and divestments.

Our view

Shell’s current strategy falls short of ambition. To deliver real emission reductions, Shell needs to raise capex ambitions for low-carbon, increase its focus on transitioning customers away from oil to low-carbon, and move away from its reliance on offsets to deliver targets. 

Investors engaging with Shell should ask for:

1) Increase capital expenditure in low-carbon from FY26, moving towards 50% by FY30 

2) Increase its focus on transitioning customers from oil to low-carbon, quantifying the use of divestments 

3) Set boundaries on offsets, recognising their limitations and providing a breakdown of its offset portfolio

Key findings