Shell places its bet on rapid hydrogen growth, biofuels and power trading

Shell places its bet on rapid hydrogen growth, biofuels and power trading

February 3, 2021 0 By Tami Hood

The energy giant is expanding its shift away from oil instead of following the direction of its competition.

Royal Dutch Shell is taking aim at rapid hydrogen growth, the rise in the biofuel market, and in power trading. The company has been strategically making these moves away from oil, in an angle strikingly different from its rivals, which are grabbing for renewable power assets.

The company and its EU competition are recreating their business models to reduce fossil fuel dependency.

Beyond shifting away from fossil fuel, Shell is also hoping to boost its appeal to investors who are concerned over the outlook of energy giants in a world moving to hack down its greenhouse gas emissions. Biofuel and hydrogen growth have both taken their place in the spotlight as Shell sees their potential in the immediate future.

The company’s official strategy will be presented on February 11. It is expected to greatly differ from those already revealed by BP and Total as it intends to position itself as an intermediary between the producers of green energy and the consumers powered by it. Other energy giants have been investing billions into renewable projects, but this won’t be Shell’s angle, said a report in The Telegram.

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In October 2020, Shell announced that it would raise its spending on low-carbon power to 25 percent of its overall capital expenditure in five years. According to sources cited in The Telegraph report, that would represent over $5 billion per year, which is a substantial increase over the current $1.5 billion to $2 billion.

While Shell invests in hydrogen growth and biofuels, it will keep its oil and gas output stable.

For at least the next decade, Shell will maintain the stability of its oil and gas output in order to ensure the necessary funding for its own greener energy transition. That said, it is likely that gas will become an important part of the overall future energy mix, said a recent Reuters article cited in the report.

Hydrogen growth - Shell - logo at gas stationShell is currently declining the opportunity to discuss the details of its investments into biofuel and hydrogen growth ahead of its official announcements later this month.