Go ahead, sir.
Thank you very much, Molly. Good morning to all of you, and thank you for joining virtually today. These are, of course, extraordinary times, and we're very grateful for your understanding and also for the fact that you are with us on this call. A special thank, of course, to those of you who are calling in from another time zone, especially those whom it's late at night or early in the morning. A very warm welcome to all of you, our guests on the line today. Of course, before I go any further, let me highlight the disclaimer statement for a second. I appreciate that many of you will be in a lockdown because of COVID-19, the coronavirus. I appreciate that you, like many of others around the world, will be having to manage in the face of very challenging circumstances.
I'm personally very proud of the way Shell staff and contractors and suppliers have all come together in those circumstances to ensure that essential supplies continue to flow. I can assure you Shell is doing all it can to assist the global response to COVID-19. That is work that starts with taking care of our staff and our contractors, the people that are essential to ensure the world gets the energy and the other products that it needs. Whether that is through new, deeper, and more frequent cleaning schedules, through providing the IT support to ensure that up to 70,000 people can work from home each day, or through worker screening programs, Perspex screens for till operators, or new shift patterns to ensure social distancing. Shell is going to great lengths to protect our staff.
Of course, we are doing all we can to take care of our customers too. Whether that is through enhanced health and safety measures at all our retail sites globally or working with business customers to ensure the best possible ways to meet demand for essential hand and surface cleaning products. It's worth remembering that Shell's Geismar site in Louisiana is the largest producer in the world of the base chemicals that are used to make household detergents. Of course, our chemical plants are diverting resources to produce isopropyl alcohol as fast as they can. IPA makes up about half the content of the hand sanitizing liquids that are being used to keep the virus down around the world. Finally, Shell is doing everything we can to support the communities we work within.
That can be small gestures just to make lives easier, like the free food and drink that we are offering at more than 15,000 retail sites across 30 countries for healthcare professionals, such as nurses and doctors, as well as truck drivers and delivery people. It can be working with our business partners to divert resources to make the products that are needed most, like for instance, the lubricants blending plant in Kenya, owned by Shell and Vivo Lubricants. Together, we have converted that plant to now produce hand sanitizer. Helping communities can also sometimes be game-changing, like Shell's donation of 125,000 liters of isopropyl alcohol to the Canadian government for the next three months for use in healthcare facilities. That is enough for almost 1 million bottles of hand sanitizer.
Shell has also donated 2.5 million liters of isopropyl alcohol to the Dutch healthcare sector. As I said, Shell is doing what it can. I'm sure you've seen similar commitments from others. I am certain we have all benefited from the hard work being put in by so many people, far beyond Shell, to keep things going. This is urgent action. This is critical action. Even at a time of immediate challenge, it is important to also keep an eye on the long term as well. Much of the rest of what I'm going to say today will be focused on the long term, because abandoning that focus in the face of urgent short-term need will make the long-term challenges all the harder to tackle when COVID-19 is no longer with us.
Shell is dealing with the challenges at present, and I'm going to outline how we plan to deal with the longer-term challenges that will be with us for some time to come. As you can see from this agenda, we've made some changes to the event. In fact, today is a very unconventional responsible investor day because I will not be touching on many of the areas that you have grown accustomed to in our equivalent events from previous years. We made progress in many ways since the last time we held one of these events, but I must ask you to explore our sustainability report for the detail on any area that I do not touch upon in these remarks. The sustainability report is available to read or to download from shell.com.
The investor relations ESG team also remains available, of course, to you to answer any questions that you may have. While it's COVID-19 that has forced us all to connect virtually today, it is not the health crisis which has determined this change to our usual selection of topics to be covered. It is something else entirely. Instead, today's agenda, determined by the fact that I have something significant to speak to you about in relation to Shell and its plans to respond to climate change. Now, you will recall that Shell has three strategic ambitions: To be a world-class investment case, thrive in the energy transition to a lower carbon future, and to maintain a strong societal license to operate. All of them are of equal importance to the future of Shell.
Everything I say today, as significant as it is for the future of this business, fits within that framework. Being a world-class investment case means being financially robust and resilient, and the importance of that resilience has never been more clear than today, with the twin challenges of COVID-19, the current very low oil prices putting pressure on even the strongest of balance sheets. You can be reassured we continue to focus tightly on that resilience and financial strength, pulling the levers we need to pull as hard as necessary and at the times that it is necessary to pull them. You will have noticed the action that we have taken already. That resilience is critical because it is the solid foundation on which we can build. We wish to build a company that will thrive in the energy transition.
This strategic ambition is all about remaining relevant and resilient in a changing global energy system. It is about finding the business value in the energy transition. It is about being a world-class investment case far into the future. Our third strategic ambition is maintaining a strong societal license to operate. Having the support of society for what we do is essential. Without it, we can't be a world-class investment case. Without it, we will also not be able to thrive in the energy transition. To have the support of society, we must be in step with that society. Being in step with society requires actions, many areas. Safety to ethics and compliance, from responsible supply chains to respecting indigenous communities, transparency to taxes. Shell is active in all those areas.
It is undoubtedly the case that the biggest long-term question for an oil and gas business like Shell is the question raised by climate change, and that is the question I will be addressing today. Now, I have already mentioned the importance of being in step with society. Well, when it comes to climate change, society's attitude is shifting fast. This is a good thing because the world must move fast if it is to tackle climate change, and it is not moving fast enough right now. It was only five years ago in Paris that the world was focused on an ambition to restrict the global average temperature increase to well below 2 degrees Celsius. Shell produced a scenario detailing how the world could achieve that ambition.
The scenario, which we call Sky, laid out a set of measures which could transform the energy system and restrict the temperature increase to around 1.75 degrees Celsius or even to 1.5 degrees Celsius with major reforestation. It was a challenging set of measures, but it was technically possible. Yet, in those five short years, society has raised its expectations further. Today, in many parts of the world, the goal is now the tougher Paris aim of no more than 1.5 degrees Celsius. We have been listening, and we have taken a deeper look at the actions that the world could take to achieve such a goal. Of course, these actions are inevitably more challenging. Time available has shortened. Scale of the action needed is even larger, and the extent of global collaboration required is certainly unprecedented.
This pathway, 1.5 degrees Celsius, is still just about technically and economically possible. Our scenario modeling shows this global pathway to 1.5 degrees Celsius requires the whole of society to have achieved net-zero emissions by around 2060. That's not the same thing as saying that all parts of society have that much time. Those wealthier and more developed countries and regions that can move faster must move faster. If they do not, then those countries and regions which cannot move so quickly will not have the time they need. The European Union, for example, should achieve net-zero emissions by no later than 2050 if the world is to succeed in restricting warming to 1.5 degrees Celsius. That is indeed the EU's aim.
Shell has built a specific scenario looking at what Europe might need to do to decarbonize energy in the next 30 years. Let me give you a quick rundown of the conclusions to give you some insight and appreciation to the scale of change that would be involved. The EU scenario identified nine areas for action, and each of them, each of these nine, will come with challenges and with opportunities. These are the same areas that every part of the world must act in, even if the figures that I give you now are specific for the EU alone. Before I go into these nine areas, I want to emphasize there are challenges and opportunities. Opportunities for our sector and for many others. The task for the EU, all happening at the same time, starts with a doubling of the use of electricity.
Second, we must ensure that renewables like wind and solar produce around three-quarters of that electricity and that burning coal produces none of it. Third, an effective economy-wide carbon price rising to more than EUR 200 per ton in 2050. The EU needs to improve its energy efficiency by 45% compared to today. The fifth step is to ensure hydrogen is well used as a fuel for heating and for heavy-duty transport, and it needs to reach about 10% of energy use. Sixth, we have to triple the use of biofuels. Seventh is to bring about significant change in consumer and business choices. For instance, a clear shift away from short-haul flights and road freight towards rail. Eight, clean up emissions at source from industry by building an average of two Carbon Capture, Utilization, and Storage facilities a month between 2025 and 2050. Capture, store away carbon dioxide.
Each of these would need to be as large as the Shell-operated Quest facility in Canada, which captures and stores away more than 1 million tons of CO₂ each. The final measure is to deal with the 300 million tons of CO₂ emissions that remain even after taking all the action I have already mentioned. To do that, the EU could reforest an area of around 85,000 sq mi or 220,000 sq km. That is a landmass about the size of Great Britain. Obviously, if less action is taken in one area, it means more in another. If we can only think of one carbon capture facility a month instead of two over the next 25 years, that would translate into need for another forest the size of Great Britain.
If we were to have no carbon capture facilities, that would translate to forests covering the equivalent of Germany and Italy, or almost all of Texas. Just to be clear, all that action is to decarbonize energy. Agriculture needs further action. Emissions caused by industries like cement needs further action again. I hope you can easily see that the scale of action required of society if it is to restrict global warming to under one and a half degrees Celsius is huge. It's clear to us that the rapid shift in society's attitude on climate change, the tougher goal it's setting itself, and the scale of the task in front of us all, of course, also has consequences for Shell. It means that an approach which was considered groundbreaking less than two and a half years ago is already appearing to lag behind.
It is with Shell's ambitions in relation to climate change. In December 9th, 2017, you will remember, Shell announced its net carbon footprint ambition. We said we would aim to reduce the carbon intensity of the energy products we sell by around 50% by 2050. This ambition was calibrated to keep Shell in step with society working to meet the Paris Agreement, and ultimately that society achieving the Paris goal of restricting warming to well below 2 degrees Celsius. That moment was the first time any oil and gas company had announced an ambition that included not only its operational emissions, but also the emissions of its customers when they use its energy products. We followed this up by introducing short-term targets for our net carbon footprint and by linking those targets to the pay of executives.
We are already on the way to achieving our first short-term target. You remember we said we would reduce our net carbon footprint by 2%-3% by 2021. In 2019, Shell's energy products had a net carbon footprint of 78 g of CO₂ equivalent to megajoule of energy consumed, and that compares to 79 g previously. That's a reduction of more than 1% already. In addition, from 2020 on, from this year on, some 16,500 staff at Shell will have their remuneration linked to these short-term targets. Other action has included setting a methane emissions intensity target, implementing the recommendations of the Task Force on Climate-related Financial Disclosures. We have also provided increased transparency on our climate-related lobbying by publishing the Shell Industry Association Climate Review. We are taking action, and we are making progress.
Yet, as I have already mentioned, Shell intends to lead thrive through this transition to a low-carbon energy future. Shell has always said that its ambition was to be in step with society, to be in step with our customers. That is why today we are announcing significantly raised ambitions. We announce this today because large parts of society have now set their sights on limiting the global temperature rise to 1.5 degrees Celsius. Because those that can move fast must move fast. The EU push to reach net-zero emissions by 2050 is right. The U.K.'s push to reach net-zero emissions by 2050 is right. Shell's new ambition is to be net-zero emissions energy business by 2050, as sooner if that's possible. That is right too. Global society overall may have until around 2060 to reach net-zero emissions.
Shell recognizes that it stands within a section of society that needs to move faster. That is what we intend to do. Let me repeat this ambition. By 2050, we intend to be a net-zero emissions energy business, and we will be net-zero emissions before 2050 if that is possible. That is a huge task, a task at least as big as that faced by wider society, and we will work towards it, towards net-zero emissions three ways. The first step is to significantly raise the level of ambition that we stated two and a half years ago. At the end of 2017, our net carbon footprint ambition was designed to be in step with the society leading or heading to a world of well below 2 degrees Celsius.
It meant Shell selling more and more products with a lower carbon intensity, such as renewable power, biofuels, and hydrogen. It also meant finding ways to deal with emissions that could not be avoided through nature and technology. In short, our 2017 ambition already meant seeking to radically transform Shell to establish new business opportunities. It meant finding new ways of running a financially sustainable business. Now, a new ambition still means all of this, but it means moving much faster because we have now recalibrated our net carbon footprint ambition so that it is in step with the large sections of society that want to achieve 1.5 degrees Celsius. From today, Shell's medium-term ambition is to reduce the net carbon footprint of our energy products by 30% by 2035. That's instead of the 20% of our previous ambition.
This means that our long-term ambition is now to reduce the net carbon footprint of our energy products by 65% by 2050. For those of you wondering why being in step with a 1.5 degrees Celsius future doesn't mean reducing the net carbon footprint of our energy products by 100%, I'll get back to that in a moment. We also want to be clear. This ambition is about emitting fewer greenhouse gases on average with each unit of energy that we sell. We calculate the emissions created during the life cycle of our energy products. We subtract the effect of the actions that we as Shell take to mitigate those emissions, whether that's through nature or capture CO₂ from the atmosphere or technology to capture and store it away.
That gives us then the net emissions associated with our energy products. We divide that emissions figure by the amount of energy in megajoules contained in the products that we sell. Our original ambition did not include the emissions from the production of our non-energy products like chemicals and lubricants. These were excluded at the time because they are not products that are burned when they are being consumed. Now, if you want to be a net-zero emissions energy business, that basically means that we have to address all emissions from all our operations. That is why today we are saying that by 2050 at the latest, we aim to be net-zero on all the emissions from the manufacture of all our products, including our non-energy products. That includes our operational emissions.
That includes the emissions associated with the energy that we consume through those operations. For those who like the terminology piece, it means net-zero emissions on Scope 1 and Scope 2. If we can do this sooner than 2050, we will. That is the second step on our way to being a net-zero emissions energy business by 2050. You'll recall, I just said Shell's new net carbon footprint ambition is a reduction of 65% by 2050. Now, that's not enough for Shell to become a net-zero emissions energy business overall because it only deals with the majority of the emissions caused by our customers' use of our products.
To explain it a little more and explain, as I promised, why being in step with a 1.5 degree Celsius future does not mean reducing the net carbon footprint of our energy products by 100%. The net carbon footprint ambition covers the carbon intensity of the products that we sell in society. Today, most of these products that we sell create emissions when they are being used by being burned by our customers. Over time, we aim to sell fewer of these products, create emissions, and more products that are low or no carbon. In all credible scenarios, including the IPCC 1.5 degree C report, all credible scenarios show that society will continue to need some products that create emissions for the foreseeable future because no other option is available yet.
That means that for the foreseeable future, Shell will continue to sell products which create emissions when they are being used. That is why it's not possible for Shell to set an ambition to reduce the net carbon footprint of our energy products by 100%. Even in a net-zero emissions world, people will still need to use some carbon-based fuels for some uses, which create emissions. It doesn't mean that we can't be a net-zero emissions energy business, because our customers can and will themselves take action on the emissions created by their use of our energy products. Any actions by our customers to mitigate their own emissions or increase their energy efficiency, of course, will not count toward the net carbon footprint of our products. They will not count because we do not claim credit for the actions of others.
As society moves towards its lower carbon future, however, our customers will also need to act to mitigate the emissions caused by their energy use because they will need to reduce their Scope 1 and 2 emissions themselves. Their Scope 1 and 2 emissions are the same emissions that count as Shell Scope 3 emissions. That is why such actions by our customers can help Shell become a net-zero emissions energy business itself. That is why we have to make a third step if we are to become a net-zero energy business. That step is working with our customers to address the emissions which are produced when they use the fuels they buy from Shell. That requires action from both sides.
Indeed, we can only achieve our ambition to be a net-zero emissions energy business as part of a society that is also working to be a net-zero emission society. It's not enough to wait. Indeed, we are determined to help society move faster. We will work with our customers to help them find ways to decarbonize. That effort includes working with broad coalitions of businesses, governments, other parties, sector by sector, to identify and enable decarbonization pathways for each sector. Each sector will need to find its own way to achieving net-zero emissions. Each sector is different, and some sectors are highly fragmented, so the actual action needed in any particular sector will vary. All sectors, however, share the same three basic ways to make progress. First, by being more energy efficient. Secondly, by using lower carbon energy products.
Thirdly, by storing away emissions that cannot be avoided, either through nature or using the technology that already exists to capture and store away CO₂. We can help push progress in all those areas. In addition to that, of course, consumption patterns within society must shift towards lower carbon choices as well, encouraged by policies such as, but less carbon pricing mechanisms, et cetera. Action in all these areas will help address the emissions that fall outside the action Shell can take towards the net carbon footprint of our energy products. It still counts towards Shell's progress towards being a net-zero emission energy business. There will need to be a substantial amount of such action in some sectors if they are themselves to reach net-zero emissions. The need for that action means Shell intends to be active in this area.
Shell's work with sectors on decarbonization pathways is therefore part of the answer. As we get closer to 2050, we will work ever more intensely with customers who still have emissions that they have not fully mitigated. We will work with them to find ways to help them do so. That may be through actions they take themselves, or we may agree to find a way to mitigate those emissions on the customer's behalf. To recap, our ambition is to be a net- zero emissions energy business by 2050 or sooner. To achieve that, we have firstly significantly raised our net carbon footprint ambition. Secondly, also have a new ambition to be net-zero emissions on all the emissions from the manufacturer of all our products, including non-energy products.
Finally, we, as a business that supplies energy, will work within sectors which use energy to establish pathways for them to follow towards net-zero emissions. Those customers still have emissions as they're near 2050. We will work with those customers to find a way to mitigate those emissions. That is what our net-zero emissions ambition means in terms of the Shell approach. What does it mean in practice? I'll give you an example. I will walk you through how Shell's progress to net-zero emissions might look in the aviation sector. Now, I appreciate that right now, aviation is experiencing massive challenges as a sector due to COVID-19. What I'm going to outline covers a 30-year period.
More than that, aviation is one of the most challenging sectors to decarbonize, which means it is one of the sectors where Shell's ambition will be tested most strongly. It's only right that I choose an example which will place Shell's ambition under the greatest stress. With the sincerest apologies for those in the aviation sector who are fighting to just deal with the day-to-day issues in front of them, let me continue nevertheless with this as an example. With today's technology, passenger planes need jet fuel to fly. Today, Shell creates emissions during the production of that jet fuel. Using the technical terminology, these are our Scope 1 emissions. We have also emissions from the energy we buy, which we use when we produce that jet fuel. These are our Scope 2 emissions.
Finally, aviation companies create emissions when they use the jet fuel to fly people to their destination. These, the bulk of the emissions associated with our products, are our Scope 3 emissions. There are three ways to deal with the Scope 1 and 2 emissions we create when we make jet fuel. They are the same three courses of action any business can take to reduce their Scope 1 and 2 emissions. First, use the jet fuel more efficiently, using less energy. Secondly, using cleaner energy to produce a jet fuel, such as much zero carbon electricity as the processes involved will allow. Third, to mitigate the emissions that are left, either through nature or by using technology to capture and store away the emissions.
Shell's ambition to be a net-zero energy business means combining those three options until there are no Scope 1 or 2 emissions left that are not removed through nature or stored away. The job of dealing with the Scope 3 emissions from our aviation business will be huge. It starts with reducing the net carbon footprint of the energy that we sell to the aviation industry. That will mean selling increasing amounts of lower carbon fuels over time. At the moment, the only real alternative to jet fuels for large planes is biofuels. Advanced biofuels can indeed lower the carbon intensity of the fuel being used. In time, hydrogen could power commercial flights. Selling hydrogen produced using zero carbon electricity to split water, known as green hydrogen, could lower the carbon intensity of the fuel that Shell provides to planes to almost zero.
Providing products like advanced biofuels and hydrogen can allow Shell to significantly reduce its Scope 3 emissions. To maximize this reduction, Shell will work with all the players in and around the aviation sector to find ways to enable the greater use of these fuels. For example, working with jet engine manufacturers to ensure the chemical properties of the fuels we produce will get the greatest thrust possible. In terms of hydrogen, we can seek to work with the entire aviation sector ecosystem, from airport operators to logistics companies and jet plane manufacturers, to help make hydrogen-powered planes a reality. Selling products like biofuels and hydrogen will not reduce the Scope 3 emissions of the entire sector to net-zero.
That is partly because by 2050, it is unlikely that the world will be able to produce enough biofuel and enough hydrogen to meet the fuel needs of the entire aviation industry. This means that even in 2050, some large planes will still need to use conventional jet fuel. That is why Shell is to be a net-zero emissions energy business. There is a final piece of work to do. We must work with the aviation industry to help them deal with the emissions that are left over. Because it appears to be impossible to capture these emissions directly from a jet engine, answer is likely to be balancing those emissions through nature or technology. Now, either Shell could do that or the individual plane operators could do it, depending on who is best positioned to do so.
That would deal with the remaining issues associated with Shell's products in the aviation industry, the remaining Scope 3 emissions. That, in short, would make Shell a net-zero emission supplier of energy to the aviation sector. By 2050, we aim to do only net-zero business in that sector. Now, of course, it's easy to state an ambition, but it's much harder to achieve it. We're talking here about a fundamental shift for Shell over the next 30 years. We aim to give you an update on what it all means in the second half with some first steps being laid out. I can say this for certain today, to achieve our ambition, we must pivot towards serving the businesses and the sectors by 2050 are net-zero emissions themselves.
We must pivot to serve the businesses and the customers of the future to make Shell a business of the future. A society that succeeds being net-zero emissions by 2050 is a society in which there will be no business that is not net-zero. This is going to take a lot of work. It won't be easy. Some of the necessary technologies like hydrogen-powered planes or zero-emission ships don't exist yet. Today, Shell's business plan will not get us where we want to be. That means that our business plans will have to change over time as society and our customers will have to change over time. Ultimately, succeeding in our ambition will mean that by 2050, all Shell's own operations and the customers that we serve will in combination be net-zero emissions.
This would be in line with society's ambition to achieve a 1.5 degree C outcome. It would be in step with society, and it would be in line with our own strategic ambition. Being in step with society is key. It's key to maintaining a strong societal license to operate. By staying in step with society as it shifts towards a net-zero emissions future, we are also setting ourselves up to thrive through the energy transition. By thriving through the energy transition, we are doing the work we need to do to be a world-class investment case many decades to come. If Shell can succeed in its ambition, if we can succeed in becoming net-zero emissions energy business by 2050, we will truly have succeeded in being an integral part of that net-zero world.
There is no more ambition we can have than this, to be a core part of the future. A future that society wants, a future that society needs. That is what being a net-zero emissions energy business means to Shell. That is what Shell now intends to do, and we will work with our customers that we can achieve it together. Thank you. Now, with that, let's go for your questions. On the line also is Harry Brekelmans. Harry is Shell's Projects and Technology Director, well known. He is the Executive Committee member that's accountable for matters of climate change, and he will, together with me, address some of your questions. Harry, welcome to the call as well.
Thank you.
I think you already heard the instructions. Type your question in the Q&A box. We have on the line also our Investor Relations, EVP, Tjerk Huysinga, and he will help facilitate the Q&A session. Tjerk, it's over to you.
Okay. Thank you, Ben. Good morning. Good afternoon to everyone. Indeed, this is Tjerk Huysinga. I'd like to facilitate this for you. Let me pose the first question. It's actually from Oswald Clint from Bernstein. Thank you, Oswald. He asked two questions, Ben. First of all, impressive to see the confirmation and extension today of your net carbon footprint target, and you've outlined many ways to get there. Within that, I want to get a sense of the success you're having in changing the mix of products you supply and the customer uptake for those. That's the first question.
Second question is, given the price environment we have today, which none of us had really imagined, but is adversely affecting everything you currently sell, do you see any constraints on funding these low carbon ambitions and ultimately pivoting your business to a net-zero sectors and businesses, especially given the other demands you have on your cash flows? A lot of calls on Shell's cash flow, does anything have to give? Ben, over to you.
Okay, thanks very much. I also see the question in front of me. If you please leave it up, Tjerk, just as a bit of logistics. Yeah, thanks, Oswald. Thank you for the confirmation. I think we are changing, and we are seeing the initial successes. Of course, we are very early on in the change process. I talked about the net carbon footprint of our energy products. Has come down with, I believe, 1.25% to be precise. Now you can say that's not an awful lot, but it's of course a massive amount of products that we are selling. Bear in mind, we sell six times as much oil products as we take oil out of the ground. It is quite a change. Sorry, can we just go back to Oswald's question, please?
Sorry for the Because I see another piece of text in front of me now. It is indeed quite a change. It happens in areas that are easiest to do. Yes, we are, of course, selling more power, more low-carbon power. We are selling increasingly more fuels with nature-based solutions attached to it, so they are compensated. As a result of this, we see these initial changes happening. It needs to go, of course, much further. It needs to go much faster. We need to have much larger scale, low-carbon power sales. We need to have, of course, much larger scale biofuels. Hydrogen needs to become a larger part of the mix. All these things do indeed take time.
You will see that we have taken investment decisions on some of these facilities, like offshore wind farms, that will then start to contribute to us having access to cleaner fuels or lower carbon energy carriers that will help us progressively on this journey. Yes, there is uptake. It is surprisingly strong. It is surprisingly innovative in some cases as well. We also have been selling zero carbon LNG cargos, for instance. Of course, it is a start. It needs to accelerate. It needs to go much, much faster and much further. Yeah, the price environment today is not helping. I don't think I would be honest if I said, no, don't worry, the price environment doesn't matter. Then again, we are talking about a 30-year change that we are working on.
The other thing you have to bear in mind, it is not only heavily investing in assets, but because it's very important to recognize also what we are talking about here is changing the mix of products that we sell. Yes, that will mean that we have to invest in the value chains that produce these products as well. It's not just a matter of changing a lot of our assets. That will come and that will change over time, but it's not necessarily the main driver. You can also recycle capital. Getting into a renewable power facility, selling it down, holding onto the electrons, using the freed-up cash to do another renewable power project is another way of accelerating the process without necessarily using new cash all the time. Yes, I recognize the challenges.
I recognize that we have a long way to go, but we are moving the supertanker. Can we go to the next question, please?
Yes. Thanks, Ben. The next question is from Adam Matthews, from the Church of England.
Yeah.
His question and statement is as follows: On behalf of Climate Action 100+, we have welcomed the increased ambitions and commitments announced today. We also welcome the manner of the engagement that continues between Shell and the Climate Action 100+, which is focused on our collective objective to achieve a net-zero transition in line with the Paris Agreement. The point about pivoting towards those companies sectors that support net-zero is hugely significant. Can you please offer some insights into the role you believe investors can play in supporting this approach? Ben, over to you.
Yeah. Thanks very much. Thank you very much, Adam, and not only for the question, but indeed for the very constructive and successful engagement that we've had. I think it's the great example of how companies and investors can and should work together to address these challenges. I think to your question of the pivot, as we have discussed so many times, I said before, we can only succeed, of course, if we can pivot to the sectors of the future, the sectors that themselves need and want to be net-zero. We're not going to wait for those sectors to figure it out by themselves. We're going to really help them in areas where we have expertise and where we have a role to play. That's why we are so actively engaged in the sectorial approach.
It will only be through a complete change in all the sectors that we serve, that we can also be successful in our pivot. There needs to be something to pivot to, of course. I think that's also where I believe you can help. It is hugely important that in all these sectors that we talk about, and it's about 15 odd sectors to consider, that we have all the players in these sectors together. Not just with the aviation example, the airlines, but everybody that is involved in the aviation ecosystem. The airport operators, the turbine manufacturers, the plane manufacturers, the fuel providers, et cetera. Also, it would be great if there was also a strong drive and support from investors to just say, yes, we need to have energy use also decarbonized.
We need to actively participate in these sectors to encourage, to reward, to challenge even, if that is going to be needed, much in the same way as you have challenged us to make that progress and to collaborate. Yes, I do think you have a role to play as we have a role to play in making these sectors that we can pivot to when we approach 2050. Thank you.
Thanks, Ben. The next question is from Peter Low from Redburn, and his question is: How will Shell become net-zero by 2050 if there's only 65% reduction in the net carbon footprint of the products sold? Can you please walk through the scope of the net-zero target?
Okay. I think that is probably indeed one of the challenges to really address, and I hope if you sort of reflect on what I've said to you, it'll make sense. Ultimately, of course, what we need to get to as a society is that as a society, we have net-zero emissions in the energy system that we adopt in society. That doesn't mean that all the energy products need to be net-zero. As a matter of fact, it's probably impossible. It's not because we like it to be like that. That is what every credible expert also believes. By 2050, when society is at net-zero, there will still be energy products being consumed, sold and consumed, that in principle, are carbon-based.
It will be a minority, it will be a small fraction, but it will still be there, because there will still be certain users of energy, like the aviation example that I mentioned, that can only be serviced with carbon-based energy products. That then means that these customers of these energy products will have to have ways and means to deal with it. Whether it is a plane that needs to offset its carbon emissions because they still have to use a certain portion of their fuel as petroleum-based jet fuel, or whether it is a gas-fired power plant that still may exist in 2050, believe it or not, that will have to burn gas and do something with the CO₂. Something will have to be done about it. Those players also want to be net-zero. They will have to resort to carbon capture and storage.
They will have to resort to other ways and means to mitigate those emissions. We will help them with that, and we will only service those segments of society that will mitigate, whether we will do it for them or they will do it themselves. Every business that we will engage in will have, from cradle to grave, net-zero emissions. Doesn't mean that we will only sell net-zero products, but it does mean that whatever product we sell that still has carbon in it, will ultimately be mitigated, either because our customer will do it or because we will do it on their behalf. Again, that will be the only business we will be engaged in.
Thanks, Ben. The next question. We have quite a few questions coming in here, so bear with us. We're trying to give you all the time possible. The next question here is from Lydia, from Barclays.
Yep.
Two questions from Lydia for you, Ben. Thanks, Ben. The COVID-19 response examples have been uplifting and inspiring. Can you talk about whether the recent movements in the oil price has changed the way Shell thinks about the risk-reward profile of investments in renewables or low-carbon businesses compared to the upstream business? That's the first question, Ben. Let me read the second question for you as well. The second one is, how does the acceleration of the reduction in carbon ambition changes Shell's capital allocation process? Can you talk through the economics of hydrogen and what you need for commerciality?
Yeah. Thank you, Lydia. Thanks, first of all, for the acknowledgement and two really good questions. If you look at what is happening in oil markets, it is, of course, an overused word, but it is unprecedented. We have to understand what's going to happen next. Very hard, by the way, because nobody, of course, has ever dealt with situation like this in living memory. It's therefore quite a challenge to predict how oil markets will play out. A lot of scenario testing, a lot of resilience testing, et cetera, is going to be needed at this point in time. Some people say, Well, this is what's going to happen when we finally do the energy transition. I think that is probably a little bit overdone.
I do not think the energy, and certainly do not hope the energy transition will be as disruptive as this COVID-19 crisis is. It does indeed show that, well, first of all, that even a reduction of 20% in energy use comes with a massive change in how society looks like and what it is we can and can't do. In a way, it does show how difficult it is to make this energy transition. Yeah, I think it's fair enough. We will see probably changed attitudes, changed ways of working, maybe a certain economic downturn following from this, that will all have their effects on energy markets, and with it, of course, on oil and gas markets. You could argue that what keeps a lot of things going today is electricity, and therefore power is perhaps also a more interesting opportunity to look into.
Yeah, I think it's probably too simple to say, This is the dress rehearsal for the energy transition, so therefore we may as well step out of it. We are thinking very hard, of course, on the back of all of this, what this means for our ongoing investment plans. What you will see, Lydia, is a continued focus on pivoting away, as we had been doing, pivoting away from the more traditional energy markets into the energy markets of the future and the customers of the future. You will have seen in our strategy updates, and also basically what we are saying now, it will be serving more the customers of the future with the energy of the future. With that, indeed, we will change our investment profiles. The capital allocation will change over time.
That is not a matter of next month or next quarter, but it will change over time. Indeed, in areas like hydrogen, in areas like biofuels, we need to invest a whole lot more than what we are doing at the moment. At the moment, I think we are probably one of the largest hydrogen investors, other than the industrial gas companies, in the world. It doesn't show up in our capital allocation because it is so nascent. Now, we have to push that. You heard me talk about hydrogen for planes. That's not gonna happen next year, but it will happen over time. When we see it happen, we want to be part of that emerging market, and we want to be a major innovative player in it. Yes, we are finding ways and means to accelerate it, hydrogen, biofuels, renewable power as well.
Of course, other technologies that will help. They scale up, unfortunately, from a relatively modest number, but it will have to grow significantly over time, Lydia.
Thanks, Ben. The next question is from Bruce from Hermes Investment. His question is: When Shell helps its customers to reduce its own emissions, which makes the gap between 65% and 100%, is this likely to be further natural carbon sinks? If so, is this really feasible in terms of land areas? Many thanks.
Thanks, Bruce. Very good question. Well, natural carbon sinks will be part of it, but the philosophy that we have adopted also for our own issues for that matter, is to use natural carbon sinks as much as possible for those emissions that cannot be treated or dealt with in any other way. To, again, give obvious examples, cars that still run on fossil fuels, the only way to deal with it is to offset the CO₂ emissions, with some sort of natural sink. Of course, you can say, No, we shouldn't do that. We should just change them all out to electrical cars. I don't disagree with it. It's just not going to happen tomorrow. It will take time.
In the time that society migrates away from the internal combustion engine for personal mobility to electrical and hydrogen, in that intervening decades, we will have to do something else. Offering natural sinks is a sensible thing that can be done today, and for which we have business models that work. That we do at the moment, have the opportunity, channel contributions of our customers into really high quality nature-based products to offset it. The same is true indeed for those emissions, for instance, from airplanes that I mentioned early on. As much as possible, it will need to be other technologies as well, like direct air capture or carbon capture and storage. The natural gas that we will probably still be selling to industrial consumers around the world increasingly will have to be mitigated by CCS facilities on those industrial facilities.
In some cases, that is not going to be easy, so some natural sinks may be needed. In some cases, it's not needed because they will find other technologies to avoid using fossil fuel-based energy. For instance, hydrogen or electricity or something else. It will be a mix of things. Natural sinks will be part of the solution. We believe if you do it well, I gave you the European example, but if you apply that to the world and you look into our Sky scenarios, yeah, it will be a lot of landscape projects, and we always simplistically put it a forest the size of Brazil. That's not inconceivable. As a matter of fact, that is actually also probably quite welcome. I think, yes, it is feasible in land terms. It doesn't bite land use for other purposes.
I think many others who are much closer to this issue will agree with us.
Ben, it's Harry. Would you mind if I just add.
Oh, yeah, sorry. Yeah. Please.
Yeah. I think, Bruce, thanks for the question, and I think you raise a point that we see often made around, is this viable, first and foremost, and is it desirable? I think in most of the respective scenario work that we see by credible parties, first and foremost, of course, the IPCC, we do see the use of natural climate solutions entertained significantly, as inevitable, an indispensable part of the solution to get to net-zero by 2050. The Nature Conservancy recently did a piece of work you may have seen that they claimed there to be something like 11 gigatons of natural climate solutions potential by 2030 at a cost of below $100 a ton, and another 12 and a half gigaton at above $100 per ton in the two decades thereafter.
That fits well with the overall projections in a number of the IPCC 1.5 scenarios. In all the projections we do, first of all, we acknowledge that piece of work shows that those are not significantly in competition with food or otherwise important use of land. In fact, there are many co-benefits that are beneficial in every possible aspect of biodiversity and livelihoods. In our own projections with respect to our net carbon footprint and our net-zero business ambition, we don't take any disproportionate view on how much of that we could claim or we are entitled to. Yes, it's possible, and we don't make any disproportionate use of it. If you were to want to know any more about it, I'm happy to connect offline and give you a bit more insight into the work we're doing also with others.
Back to you, Tjerk.
Yeah. Thanks, Harry. We've got a next question here from Colette. Colette from Axiom. It's a bit the same theme again, Harry and Ben, but her question is, great to hear the increased ambitions. I still would like to ask why you do not set an ambition to 100% in 2050, even though this is a huge leap given that not all the technologies and products are available yet for a zero carbon footprint. This would incentivize Shell, its customers, and society to collaborate together on all those alternatives. Thanks, Ben.
Yeah. Thank you, Colette. Let me say a few things about it, and then maybe, Harry, just step in with any further adds. It's a bit more difficult if you have to do this all virtually and you can't use body language to signal. Indeed, it is one way of looking at it. You have to bear in mind, of course, in a way we do set 100% target or a 0% target or whatever it is that you want to look at.
It is 100% net-zero emissions, it is across the entire chain of products that we are associated with. Admittedly, indeed, some of the products that will leave our company and enter into our customer premises will still have carbon in it. Indeed, that carbon will be either used or mitigated or dealt with in a way that it doesn't create emissions. That's how we get to this net-zero emission outcome. If you were to say, well, why can't we get to 100%? That is, I think, simply the techno-economical reality of the world we will be living in by 2050. I do not think anybody in this world, including the experts, including the very deep scientists in the IPCC, nobody believes that we will live in a world by 2050, where all the energy products will have no carbon in them.
The reality is that we have to deal with that. The reality is that if you want to be in the energy business, you may as well be in that part of the energy business that still has a carbon component, provided that carbon component doesn't result in emissions. To be part of that, to also be part of that part of the solution is, I think, helpful. If you say, well, we will limit ourselves to only selling those products that don't have carbon in it anymore because that then can be done by somebody else, not entirely sure, but that is a better outcome of the company that will have a lot of solutions at hand to work with customers to deal with carbon-based energy. Harry, anything you want to add?
A couple of points perhaps, Ben. Indeed, I think it's important that the NCF, of course, as you've laid out, relates to our energy products. So it's very distinct around our own responsibilities. Of course, what we're linking to that now is the net-zero business ambition, which very much, of course, highlights the interdependency with our customers, and in some ways then connects us very tightly, making it very clear that we have to do something together here to get to 100%. I'm even a little worried if we would say 100%, that it then becomes somebody else's problem in some ways, from the vantage points of our customers.
I think the distinction between the two approaches of a net carbon footprint in relation to our energy products, within what we think is plausible and yet challenging, as well as, and in addition to the 100% net-zero ambition with respect to our customers, I think is the appropriate combination. I think it also brings about the importance of entertaining all solutions up to and including natural climate solutions, which we know are contested, but we also very much feel that we can't do without. Even creating the impression that we could do without may actually put us on a path that we may regret later. I actually think it's quite important to position it in that regard in the way we have done.
Thanks, Harry and Ben. Let me ask the next question. This is Johnny from Morgan Stanley. His question is, through what methods do you intend to offset your Scope 3 emissions? Is this going to be through voluntary or regulated markets?
Harry, you want to take it?
Yeah, I can make a start, Ben, then for you or Tjerk to add to it. Certainly at this point in time, we're on this path. In a number of markets, we are offering the opportunity for customers to acquire the natural or nature-based solutions, together with our fuels offering. Actually, the uptake is quite positive. For those customers who at the moment don't have another choice, this is a solution, and we certainly see that continue going forward with more markets and a greater volume. The solutions we're now drawing on is a combination between regulated and voluntary markets, depending a bit on where you are. It's a good question because one of the challenges we see is the fungibility and the scale of the market is, in our minds, not big enough at this point to entertain, over time, a very material volume.
That's what we need to do. It's not that there isn't a potential, but simply there aren't the markets and there isn't the fungibility. What we also would say is that I think regulated markets are a good thing, because in many ways, they then provide the requirements on users of the market with respect to verification, standards, and a variety of other things that we think are important. Also it provides, we think, the access to international mechanisms such as Article 6 of the Paris Agreement that still needs to be concluded. Only if that is concluded, we feel will there be access to a market that's material enough in the end, to gain the scale that we need as a world, to make it a relevant and material instrument that helps us to get to net-zero by 2050.
I think for the foreseeable future, we'll be using a combination of the two. It's not bad, of course, to have voluntary markets, but in the end, I think to get to materiality, I believe that we will need to see something like a global regulated market, that manages these solutions at a very material scale. Also in a way, of course, that drives efficiency with respect to the overall cost and making sure that the dollars go to where they are needed and best deployed. Ben, anything to add to that?
No, I think that's a very complete answer. Thanks, Harry.
Thanks, Harry, and thanks, Ben. Next question here we have from Jon Rigby from UBS. He has got three questions. The first one is: Is the pivot a cost/tax on the energy business, or is there a return to be made from this change? Second question is: Are you describing a new technology or consulting business to work with your customers to address their Scope 1 and 2, i.e., your Scope 3? And his last question is: Why is 65% mitigation of your Scope 3 emissions the right number with 35% dealt with by your customers? Thank you.
Okay, great. I'll take one and two, Harry. If you do three and with the IPCC chart. No, the first one, Jon, it's not a cost or a tax on the energy business that we currently have. We need to make money from this change, otherwise it doesn't work. We're talking here about, of course, a pivot, which is actually going to be a complete overhaul of our company in the next 30 years. We can't overhaul ourselves into a charity or an NGO, or a not-for-profit organization. We have shareholders, therefore we need to find profit in this change. That's not because we are profit-motivated, that is simply because otherwise this change won't happen. We're talking here about, think again, all the examples or all the measures that I mentioned about what needs happening in Europe.
This will only work and only come about if there is money to be made. Otherwise, it is just not going to be viable, sustainable. The technology and consulting business you refer to, no, that's not the idea behind it. What we will do is we work with the customer segments that we currently service or that we could service in a new future to actually help them figure out how they decarbonize with products that we will sell them. Again, if I use the aviation example, if we want to decarbonize aviation, we have to find a way to make biofuels and hydrogen a techno-economic proposition. To just wait until that somehow happens automatically is just waiting too long.
We have to work with them to understand what is the supportive policy environment that is going to be needed to make biofuels a reality, to make hydrogen at scale a reality. That actually, they, and with them, of course, aircraft manufacturers and the Rolls-Royce of this world, et cetera, actually have an incentive to do this because it actually works. Then, of course, it is for us to serve that need. It's not a consulting business. It is actually business development that we are talking about here. It is doing this because if we don't do it's just going to take too long. The same is true, for instance, with hydrogen for mobility.
If we want to see a very significant amount of hydrogen uptake in Europe, I talked about 10% of the system in Europe being supplied in the form of hydrogen. That means hundreds of thousands of hydrogen trucks. They're not going to come about without there being hydrogen, without there being a business case for it. I think it is for us to help incubate that together with truck manufacturers, together with transportation companies, together with port facilities, using our own renewable power, et cetera. It is basically large-scale systems engineering to figure out how we are going to do it as society, and then basically collectively turning up in places like Brussels and London and The Hague and say, you need to have these policies if you want to have this come about. It's not going to happen if you just wait for the market.
It is indeed business development. It's not a consultancy business. Harry, do you want to deal with the 65% versus 35%?
Yeah. Thanks, Ben. Jon, if I can refer you and others to what I think is slide 11, which depicts the net carbon footprint ambition and the trajectory that goes with that, which shows the two way points that Ben referred to, the 30% and the 65%. Indeed, you're referring to the 65% in 2050. The way we constructed this was to look at a range of IPCC scenarios that get the world to a 1.5 degrees Celsius objective. We use that range by scrubbing what we felt were less plausible scenarios, and then decided to target to be in the middle of that. That then constitutes a 65% improvement in our net carbon footprint of the energy mix that we provide.
What that constitutes, of course, is an improvement in the context of these energy products, where we are moving to a lower carbon mix altogether. We do that by means of providing more renewable power, more biofuels, more hydrogen, all the levers that Ben spoke to. That in its own right will make, of course, for most of the improvement there. Then in that, indeed, I think that is what you're pointing to. There's also mitigation in the context of some CCS, and some natural climate or nature-based solutions that we will provide, and we will have accompanied with our fuels and our energy propositions delivered to customers. Then there is the customer piece that is implicit in our net-zero Carbon Business Ambition, that will be dealt with by the customers, as Ben spoke to.
I think what you're suggesting here is that we take care of 65% of that, and the customers of 35% of that. That is not entirely how it works. Of course, the improvement of 65% we see here is primarily achieved by changing the energy mix or the carbon mix of the products we provide. The big levers again to pull there is to have a lot more renewable power in the mix, for example, a lot more hydrogen in the mix. Then indeed, a volume of nature-based solutions to bring us to that 65% improvement. What exactly the mix is for our customers will also constitute, of course, the carbon mix we provide. For individual customers, that could be very different. We may still have customers who are supplied with gas for a gas-powered power station.
They will then have to either provide their own CCS or their own nature-based solutions to provide for the offset. For them, of course, that component of mitigation offset will be significantly different than it would be for us. How eventually it pans out in terms of the absolute volume of mitigation versus the absolute volume of abatement and reduction we get in terms of different energy products, well, that's not deterministic at this point. Of course, we're led by this overall number. As exactly how we get there, we have a variety of scenarios, but we don't have a single one that we adhere to. Directionally, your suggestion is not incorrect. It is also in the end, not exactly as if we would provide 65% of the reduction by mitigation.
No, in fact, most of it will be by changing the energy mix of the products we provide. I hope that answers your question.
Thanks, Harry. Just for everyone on the call, we've got lots and lots of questions, and we will probably not get through all of them, but we go through quite a lot, and the others we will pick up later via direct contact with investor relations. Don't worry. I'm gonna move now to the next question. It is Patrick from Alliance. His question is, Ben, you touched well on planned industry actions needed to reach the goal from slide eight by focusing on sectors and working with the industry. Can you touch more on the policy levers you can help to pull to reach the policy goals? For instance, your role or call to support in a EUR 200 price per ton of CO₂.
Yeah. Thanks, Patrick. Yeah, indeed. I think we have to be really vocal on these things. I like to think that we have been quite vocal on things like carbon pricing, but we can clearly always do more. I think what is new here, if you like, not necessarily new by Shell, but what is clearly emerging is that these sort of blanket policy measures, like, hey, if you put a price on carbon, that will really help. People are finding out that that is actually not precise enough. You cannot, for instance, say, let's put a price on carbon, and then all of a sudden planes will start flying on biofuels. That's not the way it works.
If you really want to have planes flying on biofuels, or if you really want to have ships doing something else or different types of trucks or different behavior from customers that drive cars, you have to have much more targeted and much more precise policy intervention, maybe even mandates to make things happen. These mandates are quite often, of course, difficult to design. There's lots of opinions on it. There's lots of different push and pushback and whatever. Therefore, the whole idea about the sectorial approach is that if you get an ecosystem around the sector together, and they, on the basis of true techno-economic and political reasoning, they figure out this is the best way to go for this sector.
You can actually have a sector saying, listen, if these regulations or these policy measures are being put in place, we can move. Then it starts to make commercial sense. We have a level playing field. It will start make sense to make these investments. Maybe you have to help us here with subsidies or whatever else, it becomes a much more practical set of questions. The more generic thing like, please put a price on carbon, is quite often too blunt, too high level, and too imprecise, make these changes. That is what we propose to do. Through sectors, work with very targeted policy asks to make that sector go on its way to net-zero.
Thanks, Ben. Next question is from Lucas, from Exane BNP Paribas. What does this imply for your upstream and downstream production profiles as you drive away from fuel oil and jet fuel supply?
Let me take that one, and I think, Harry, you can take the next one that I see coming. Thanks, Lucas. Well, the short answer is less. Over time, of course, we have always been very clear for years already, we believe that through the energy transition, oil demand will peak. It will peak later this decade. It will probably peak at different parts of the world at different times. Yeah, if we are going to be successful in this energy transition, of course we will use less oil. Well, yeah, definitely, if planes increasingly start flying on bio and hydrogen, even some electricity as well, yes, you will see less jet fuel uptake, and therefore, we will have to pivot away from these products to other products.
That's exactly the reason why we can drive our net carbon footprint down, precisely because we pivot away to another type of product.
Thanks, Ben. Maybe indeed, the next question is for Harry. This is a question from Jonathan from Sustainalytics. Thank you for the presentation. It seems that achieving a net-zero ambition depends on cooperation of customers, e.g., through energy efficient choices and helping to store remaining emissions. How will you incentivize customers to do that?
Thanks, Tjerk. I saw just the question shifting on my screen. I'm not sure that is the one that Ben referred to. Any part, I think he actually addressed the question in his previous answer. If I can just add one example. Today, of course, we are trying to incentivize our customers at our forecourts by providing them choice. You will find on many of our forecourts, the opportunity for customers to do electrical charging, but also to acquire and purchase conventional out of carbon fuels, with a negative emissions or a nature-based solution added to it. The incentivization for customers in that sense is just providing them that choice to move to a lower carbon option. Also recognizing that not everybody has that option at this point in time. We're doing the same with some of our other customers.
We're actually providing gas to utilities with the option there to also offset and neutralize the carbon footprint that goes with that. I think we are seeing that increasingly expanding across the line of products that we offer to customers. In that way, we would incentivize it. There are clearly other constructs where we are working together with customers at the industrial level, industrial complexes to think of ways of moving the hydrogen economy and hydrogen solutions to scale, to the extent that it can serve multiple customers and suppliers of the hydrogen. There are a variety of tools that we feel as an energy company, and certainly the energy company that we are, we can provide rather uniquely that will incentivize our customers to work with us and to move to these products.
Do you want me to take the other question as well, Tjerk, from Carlota?
Yeah, I'll read it, so you don't need to read it, Harry. The next question is indeed from Carlota, from Royal London Asset Management. Which fiscal measures do you favor to support the decarbonization of the air industry? Carbon price applied at the production level or at the consumer level? Will it be more efficient for Shell or the airline customers to invest in the negative emissions you've been mentioning? Yeah. Over to you, Harry. Actually, the question you answered earlier was the question you're supposed to answer, so thanks for that. That was the question from Jonathan from Sustainalytics, just to be clear to Jonathan. Thanks, Harry.
Okay. Thanks, Tjerk. Thanks, Carlota. I'll make a start. Perhaps Ben wants to add to it.
Yeah.
I think that the notion of a global carbon price, I think at this point is, in some ways it would be great, but at the same time, I think it's very difficult to imagine. I think realistically what we see is a variety of instruments and mechanisms, I think, entertained to incentivize customers and producers to move to a lower carbon economy. Now, they could be various. They could be mandates, lower carbon fuel standards. They could be taxes, they could be a carbon price. It will come in a number of different flavors. Of course, what is important is that they actually are targeted and focused to be effective, and that they can operate at scale. Are we in favor or against a carbon price at the production or at the consumer level?
I think both can work. We see, of course, at present, both working. Your question also goes to, will it be more efficient for Shell or its airline customers to invest on negative emissions? Which is a bit linked to your previous question when you think about the decarbonization of the air industry. What I think will happen is the airline industry and the aviation industry will be confronted with a number of these instruments, whether it's fuel standards, whether it's a carbon cost in some shape or form. Any response, it will have to move to deploying a number of instruments that include lower carbon fuels. Ben spoke to it, I think eloquently. Also negative emissions, because it is very difficult to see the airline industry move to 100% sustainable and no carbon fuels by 2050. We are already doing that.
We're in discussions with a number of airline customers with respect to offering them fuels in addition to a negative emission solution and a natural climate solution at this point. In some places, maybe the airline industry will move in a cluster because that gives them buying power. In other places, they will look to us because we provide them the fuel, to have the fuel accompanied with a negative emission. We are very capable in providing it, not in the least, because we have a very capable material trading business that can source these negative emissions at scale, and efficiently for those customers. It will depend, but I think we are very well positioned to provide these solutions to the customers in addition to simply providing them lower carbon fuels or fuels altogether. Back to you, Tjerk.
Thanks, Harry. As I said earlier, there's still quite a few questions, but we will aim to answer the last one or two, and the rest we will pick up separately. The next question here is from Helena, from Skandia. In several scenarios, CCS is crucial in order to achieve the low carbon objectives. The technology of CCS is there, but what was needed for CCS to really take off at large scale? Thanks, Ben.
Thanks, Helena. You're absolutely right. Technology is there. Of course, it's nowhere near applied at a scale that is needed. We need to really scale this up at orders of magnitude. The challenge, of course, is there is no business model for it. We don't get rewarded, at this point in time, it's just a cost. The way this needs to therefore go is that somehow a business model needs to be created. Easiest way to do that is to put a price on carbon that is high enough for it to be an economically viable proposition to capture the CO₂ and store it rather than emit it and pay a price for it. That, of course, at this point in time, is still a relatively high price. Therefore, the second thing that needs to happen is, actually for CCS costs to come down.
For that to happen, we basically need to go onto a Moore's law curve for CCS. If we start deploying this technology time and time again, the cost will come down, much in the same way as the cost for solar and wind came down through subsequent replication and innovation in that replication. We have to somehow kickstart that Moore's law for CCS. That can happen indeed by government mandates, government subsidies, other ways and means to do things. I'm convinced that if we have another 2030 CCS plants going worldwide, the cost of that will come down significantly and will come down to a level that with a reasonable CO₂ price, it starts to come into the money to do these things as a matter of course. You're absolutely right also. In several scenarios, actually in all scenarios, CCS is crucial.
If we do not have CCS in the toolkit, it's going to be so much more difficult, if not somewhat impossible, really, to get to this 1.5 degrees C.
Thanks, Ben. I would like to ask the last question, and then we will take all the other questions offline, and answer them directly. The last question is here from Harry, from the Church of England. If the first NCF target is 30%, is there an accompanying interim target for emissions reductions through working with your customers? Back to you, Ben, and then we can wrap up afterwards.
Yeah. Okay. Thanks, Harry. That's a really good question. I think we have to really think about that to be perfectly honest. I don't have a ready-made answer like it. I think it is worthwhile having. Let me use your question to say something else about this emissions reductions, through working with our customers. Of course, we set a target of 30% for 2035. Yeah, absolutely. By 2035, we need to have made a lot of progress on our sectorial approach. As a matter of fact, we need to have cracked it. We need to have, for all the main sectors, and when I say we, I don't mean Shell, but society, for all the main sectors that we have that make up the economy that uses energy, we have to have these pathways.
We have to know what it is that we're going to do to get aviation to zero, to get petrochemicals to zero, to get deep sea transportation to zero, heavy duty road transport to zero, personal mobility to zero. We need to know all these pathways. Of course, we need to figure out, not only how we are going to provide the fuels for it and everything else. We actually then need to have a mechanism or a management system to measure progress, because otherwise, how do we know that we are making progress? We will have to measure how are we getting on with getting to net-zero in this particular sector.
There needs to be actually quite a complex accounting mechanism, if you like, not accounting in the sort of literal sense of the word, but some sort of measurement system where we can see how we are getting on to our way to net-zero. Of course, the more we can see that, the more we can, as a steward of the products that get used in these sectors, also say, okay, now we know where society is moving. We actually know where individual customers are moving. We can actually be a lot more choiceful where to work with customers, which customers have already pivoted, which customers we need to work with, what sort of solutions are going to be needed for the customers that really struggle because of the techno-economical challenges that are there.
Therefore, I would imagine, yeah, by 2035, we can start to have these measurement systems and systems actually working. We have recognized, of course, that if we want to have an ambition, get to net-zero by 2050 in our value chains, we better start thinking right now, how are we going to measure and account for it and how are we going to report on it? That will come next. I would definitely hope that by 2035, not only is it operational, but also that we have clear ambitions and interim targets for that metric as well. Let me leave it at that. I think we are indeed at time or probably slightly over. As Chair said, there's probably more questions. One way or another, we will get back to you with answers. I'm sure that our IR team already has a plan for that.
Leaves me to say, again, thank you very much for joining us today. Thank you for doing this virtually and putting up with the very minor logistical glitches that we had on our end here. The time that you spent with us on this is very much appreciated, particularly also from those investors who really work hard with us to figure out how we need to play the role that we uniquely can play as a leading company in the sector. I really look forward to the continued engagement. Thank you very much again, and hope to see you soon and next time in person. Thanks again.