5 Ways Shell Is Rethinking Fuel

THE HAGUE, Netherlands —As the second-largest oil company in the world by revenue, Royal Dutch Shell has made trillions of dollars from drilling, refining and marketing fossil fuels. But it also has a reputation among major oil companies for embracing alternative fuels and for confronting the issue of climate change, recently joining BP in proposing a carbon tax and quitting the American Fuel & Petrochemical Manufacturers (AFPM), a refining industry group, out of differences over climate policy.

As investor pressure increases on climate issues, The Hague, Netherlands-based Shell is ramping up its pace on developing—and scaling up—fuel alternatives.

“Since transport accounts for nearly 30% of the world’s energy use and around a quarter of global energy-related carbon-dioxide emissions, Shell’s major contribution begins with meeting the needs of consumers and companies who are changing the way they move about,” according to comments from Shell shared with CSP Fuels. “It is critical to use a range of different fuels.”

These developments include …

Shell was an early mover with hydrogen fuel cells, and today it has 35 fueling locations in California, with plans to expand to 100 in the next two years. It has partnered with Toyota and truck manufacturer Kenworth to develop hydrogen fueling stations at the Port of Los Angeles; has opened hydrogen fueling stations in Canada and throughout Europe; and is exploring projects in China.  

“Car manufacturers, fuel suppliers and governments need to work together if hydrogen is to become a commercially available fuel for drivers,” the company said. “Shell is helping to build the infrastructure needed for hydrogen to grow as a transport fuel.”

One issue that caused friction between Shell and AFPM was renewable fuels. AFPM, which represents many independent refiners, had lobbied against the Renewable Fuel Standard and its increasing biofuel blending requirements, while Shell and other major refiners have been investing in renewable fuels, Reuters reported.

Shell is one of the largest blenders and distributors of biofuels worldwide, according to the company, and it was the first major brand to market a branded 85% ethanol product in the United States. The company sees a big opportunity for renewable fuels in heavy-duty trucks and overseas, where government policies are driving the adoption of lower-carbon fuels. Part of Shell’s development work is with second-generation, advanced biofuels, including those formed from crop waste, inedible crops and forestry products, as well as renewable natural gas for natural gas-powered vehicles.

In 2017, Shell launched its Shell Recharge electric-vehicle (EV) charging service at several sites in the United Kingdom, and it has a network of sites in the Netherlands with EV service developer Allego. It now plans to introduce EV fast charging—using DC fast-charging stations that can provide about an 80% charge in 30 minutes—at “a number of Shell-branded retail outlets in the U.S. in the next five years,” the company said. “We aspire to provide EV drivers the same exceptional customer experience that they have now when filling up with traditional fuels.”

In February, Shell announced its acquisition of Greenlots, a Los Angeles-based provider of EV charging posts, charging network software and grid services in the United States, Canada, Thailand, Malaysia and Singapore. “With Shell, Greenlots will intensify its growth efforts and expand its range of mobility services to utilities, cities, automakers, fleets and drivers around the world,” the company said.

While Shell has been developing alternative fuels, it has also been testing alternative approaches to fueling. In 2017, it launched the Shell TapUp on-demand, mobile fueling service in the Netherlands. In 2018, it began piloting the service in Houston.

“The reception and feedback from users so far has been positive, and interest in the service from a quality fuels supplier has been increasing in the Houston market both for on-site campus refueling and small businesses,” the company said. “We are looking to grow even more in the coming months and are excited about the interest in both fueling and additional services we’ve seen from our customer base.”

Beyond its support of a carbon tax, Shell recently launched a carbon-offset program for fuel customers in the Netherlands and United Kingdom. Shell is investing in forest replanting and protection efforts with purchases of its premium V-Power gasoline or diesel, and offering those who buy regular-grade fuel the ability to pay for carbon credits.

“What happens in practice depends for a large part on choices from consumers,” the company said. “In the end, governments provide the framework, but the market will decide which energy solutions will flourish in the future. If Shell wants to thrive in this energy transition to a lower-carbon energy system, it needs to make sure it delivers the energy products that consumers want.”

Shell has set a goal of cutting the net carbon footprint for its energy products by about half by 2050.

“Our portfolio is evolving from that of an oil and gas company to one of an all-round energy company,” Shell representatives said.