Energy giant Shell reported that its total greenhouse gas emissions remained broadly stable in 2025 at approximately 1.1 billion metric tons of carbon dioxide equivalent (CO₂e), according to the company’s latest annual report and calculations referenced by Reuters.

The figure reflects emissions associated with both Shell’s operational activities and the fuels it sells globally. Despite increasing global pressure on energy companies to accelerate decarbonization efforts, the company’s latest disclosures indicate that its overall emissions profile has remained largely unchanged, highlighting the continued reliance of the global economy on fossil fuels.

To put the scale of the company’s emissions into perspective, the United Kingdom’s total greenhouse gas emissions stood at roughly 480 million metric tons of CO₂ equivalent in 2024, less than half the footprint associated with Shell’s operations and the fuels it supplies to global markets.

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Scope 3 Emissions Dominate Shell’s Carbon Footprint

The vast majority of Shell’s emissions fall under Scope 3 emissions, which account for greenhouse gases produced when customers burn the fuels a company sells.

Scope 3 emissions are typically the largest component of an oil and gas company’s carbon footprint because they capture the downstream impact of fossil fuel consumption across global energy systems. This includes emissions generated when gasoline powers vehicles, when natural gas is used to heat homes and buildings, and when fossil fuels are burned in power plants to generate electricity.

Corporate climate reporting frameworks categorize emissions into three major groups.

Scope 1 emissions represent direct emissions from company-owned operations such as oil extraction, refining processes, and industrial facilities.
Scope 2 emissions refer to indirect emissions generated from electricity used in company facilities.
Scope 3 emissions, however, extend beyond the company’s immediate operations to include emissions produced across the value chain, particularly those generated when consumers use the fuels supplied by the company.

For major energy suppliers such as Shell, Scope 3 emissions can account for more than 80 percent of the company’s total climate impact. This means the majority of emissions associated with oil and gas companies occur not at production sites but at the point where fuels are consumed across the global economy.

The dominance of Scope 3 emissions highlights a key challenge facing fossil fuel companies: even if operational emissions decline, the broader carbon footprint of their products remains tied to global energy demand.

As a result, debates about the oil and gas industry’s role in climate change often focus on how companies address these downstream emissions and whether their strategies adequately account for the environmental impact of the fuels they sell.

Net Carbon Intensity Remains at 71 gCO₂e/MJ

Shell said its Net Carbon Intensity (NCI)—the main metric it uses to track progress in its energy transition strategy—stood at 71 grams of CO₂ equivalent per megajoule in 2025, unchanged from 2024.

The company has set a long-term goal of net zero emissions by 2050 as part of its strategy to align with global climate targets and international efforts to limit global warming.

Net carbon intensity measures the amount of carbon emissions produced per unit of energy supplied, rather than the total volume of emissions generated by the company. This metric reflects how the company’s overall energy mix evolves over time as it incorporates more lower-carbon energy sources.

Shell’s energy portfolio includes a range of products beyond traditional fossil fuels, including:

• renewable electricity
• biofuels
• hydrogen
• other emerging low-carbon energy technologies

By increasing the share of these lower-carbon energy sources within its portfolio, the company aims to gradually reduce the carbon intensity of the energy it provides to global markets.

For large integrated energy companies, intensity metrics provide a way to measure progress in decarbonizing their energy supply while continuing to meet rising global demand for energy.

However, the use of intensity-based metrics has also sparked debate among climate analysts and environmental groups who argue that such measures may not always reflect the full scale of emissions associated with fossil fuel production.

Debate Over Intensity-Based Climate Targets

Carbon intensity metrics have become one of the most debated aspects of climate reporting within the oil and gas industry.

Because intensity measures emissions relative to the amount of energy produced, a company can technically increase overall fossil fuel production while still lowering its carbon intensity metric.

This situation can occur when companies expand renewable energy capacity, add biofuels to their energy mix, or use carbon offset mechanisms to lower the average emissions associated with the energy they supply.

Critics argue that intensity-based targets may sometimes mask the true scale of emissions generated by fossil fuel production, particularly if companies continue to expand oil and gas output while reporting improvements in carbon intensity.

From this perspective, absolute emissions reductions are seen as a more meaningful indicator of progress toward global climate goals.

Supporters of the intensity approach, however, argue that it reflects the practical realities of the global energy system. Energy demand continues to rise worldwide, particularly in developing economies where economic growth is closely linked to increased energy consumption.

For large energy companies operating across global markets, balancing emissions reductions with reliable energy supply remains a complex challenge.

Shell’s unchanged carbon intensity metric in 2025 highlights this tension. While the company has made commitments to expand lower-carbon energy sources, global demand for oil and gas continues to play a central role in shaping the company’s emissions profile.

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Strategy Shift and Recalibrated Climate Targets

Shell’s latest emissions disclosures come at a time when the company has been recalibrating elements of its long-term climate strategy.

The company previously announced that it would drop its 2035 carbon intensity reduction targets and revise certain 2030 climate goals. Executives cited uncertainty surrounding the pace of the global energy transition and shifting market conditions as key factors behind the adjustment.

Instead, Shell has emphasized a strategy focused on strengthening core business segments such as liquefied natural gas (LNG) trading and upstream oil and gas production, areas where the company expects sustained global demand.

Natural gas, in particular, is viewed by many energy companies as a transitional fuel that can help reduce emissions compared with coal while providing reliable energy supply during the broader transition toward renewable energy systems.

At the same time, Shell has begun reviewing parts of its low-carbon investment portfolio, signaling a more cautious approach toward large-scale investments in some renewable energy projects.

The strategic shift reflects broader tensions within the energy sector as companies attempt to balance climate commitments, shareholder expectations and the continued importance of fossil fuels within the global energy system.

For multinational energy companies operating in complex international markets, navigating the energy transition involves not only technological change but also regulatory uncertainty, evolving investor expectations and shifting geopolitical dynamics.

Why This Reporting Matters

Shell’s emissions disclosure highlights the growing importance of climate transparency among major energy companies, particularly as investors, regulators and policymakers increasingly scrutinize how fossil fuel producers are managing climate risks.

With total emissions remaining around 1.1 billion tons of CO₂ equivalent, the report underscores the enormous scale of emissions associated with global oil and gas supply chains and the challenges involved in reducing them while energy demand continues to grow.

The data also brings renewed attention to the ongoing debate over intensity-based climate targets. While carbon intensity metrics can demonstrate improvements in emissions per unit of energy supplied, they may not necessarily indicate reductions in overall emissions if fossil fuel production expands.

For investors evaluating long-term climate risks, these distinctions are increasingly important. Financial institutions are under growing pressure to assess how companies align with global climate targets and whether their transition strategies are credible in the context of rising regulatory scrutiny.

Climate disclosures therefore provide critical insights into whether companies are making substantive progress toward decarbonization or primarily adjusting reporting metrics as part of their transition strategies.

As sustainability reporting standards continue to evolve worldwide, emissions disclosures from companies like Shell are becoming essential tools for evaluating transition risks, corporate climate commitments and the long-term resilience of energy business models.

Outlook: Growing Scrutiny of Energy Transition Strategies

Looking ahead, emissions reporting from major oil and gas companies is expected to face increasing scrutiny from investors, regulators and climate advocates.

Global energy demand continues to grow, particularly in emerging markets where economic development and industrial expansion require significant energy resources. At the same time, governments and international institutions are pushing for faster progress toward climate goals and lower-carbon energy systems.

This dual pressure creates a challenging environment for large energy companies. They must continue supplying energy to global markets while simultaneously reducing the carbon intensity of their operations and products.

For companies like Shell, the credibility of their transition strategies will likely be evaluated through future emissions disclosures, climate targets and investment decisions in both fossil fuel and renewable energy sectors.

As climate reporting frameworks continue to strengthen globally, transparent and consistent emissions data will play a critical role in shaping how investors and policymakers assess corporate climate performance.

Ultimately, how companies manage and report their emissions will remain central to determining their role in the global effort to address climate change and transition toward a more sustainable energy system.

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Photo Source: Google

By: Rosemary Wambui

16th March 2026