Taking a long-term view - developing fuels for the future
A Shell case study

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Introduction

How we use oil is becoming an increasingly important issue. There has been growing concern over society's dependence on oil, the impact of vehicle's exhaust emissions on health and the global effect of greenhouse gas emissions - particularly carbon dioxide - on climate change.

Therefore, it is vital that large companies use their research and development capabilities to bring to the market new, alternative forms of fuel and energy, whilst at the same time modifying existing fuels derived from crude oil to make them more ecologically efficient.

The UK government has recognised climate change as a priority. The Prime Minister, Tony Blair, has made climate change a focus for 2005 in the UK and the world - at a time when the UK government holds Presidencies of the G8 and EU. Climate change also played a major role at the Davos summit (a conference in Switzerland convened to address fundamental world problems). At Davos, Tony Blair stated that 'climate change is the most important issue we face as a global community'.

In making decisions, businesses are strongly influenced by changes in their operational environment e.g. customers' changing needs and requirements, rivals' activities, new legislation, government pressure and changes in social attitudes. One of the most significant changes in the last twenty years has been an increased sensitivity towards environmental issues at a global, national and local level.

James Smith, Shell UK Country Chairman hosted the London launch of the interim report of the International Climate Change Taskforce, 'Meeting the Climate Challenge'. He said "There is an energy transition that needs to take place this century from principally hydrocarbon based sources of energy and mobility through to more sustainable sources. Hydrocarbon resources are finite and we need to avoid environmental damage particularly through tackling climate change. Shell is trying to play its part in this transition. We wholeheartedly support using market-based cap and trade systems as an essential part of the response for carbon mitigation. We are making ultra clean transport fuels from gas, we are the world's largest blender of biofuels and we are working on biofuels from crop waste. We are involved in hydrogen and 20% of the world's solar panels come from Shell's business. We have a wind business and we are hoping to develop large-scale offshore wind farms in the UK".

The interim report sets out the main conclusions and recommendations of the Taskforce. The International Climate Change Taskforce brings together political leaders, business leaders, scientific experts and non-governmental experts from both developed and developing nations. The Taskforce's purpose is to develop and promote proposals aimed at consolidating and building on the gains achieved by the United Nations framework Convention on Climate Change (UNFCCC) and the Kyoto Protocol at the international level, in order to ensure that climate change is addressed effectively over the long term. Its recommendations are to governments and policy makers worldwide.

Over the last hundred years we have benefited from massive technological innovation e.g. oil-dependent engines for road vehicles, railways and aircraft. In recent years, however, scientists, technologists and other interested parties have compiled convincing evidence that human economic activity is producing adverse environmental impacts. If we are to continue to benefit from new technologies in a sustainable way we need to scrutinise carefully their impact on life support systems.

This involves asking questions about vehicle size, fuel types and recycling of materials. Businesses need to take a much longer term view than in the past. Sustainable solutions depend on embracing technologies that will minimise or eliminate negative environmental impacts.

This Case Study focuses on the Royal Dutch/Shell Group of Companies (Shell) and some of the possible long term solutions its technical knowhow is providing. These include developing 'future fuels' such as GtL (gas to liquid), hydrogen, biofuels, and low sulphur fuels e.g.10 parts per million (ppm).

Shell | Taking a long-term view - developing fuels for the future