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Royal Dutch Shell committed to greener China market

By ZHENG XIN | China Daily | Updated: 2021-03-12 09:38
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A Shell logo at a petrol station in west London, on Jan 29, 2015. [Photo/Agencies]

Global energy giant Royal Dutch Shell said it will constantly seek cleaner energy investment opportunities in China to further tap the potential of the sector as the country pledges solid efforts to peak carbon emissions and achieve carbon neutrality.

"The company sees big potential in the country's cleaner energy business, and we want to do more to empower China's progress through innovation and cleaner energies," said Huibert Vigeveno, the company's downstream director, during a recent interview in Beijing.

China is currently the company's biggest liquefied natural gas market. Shell is a key supplier of LNG to the country. The company has also set up a new energy business team to look for new investment opportunities in the clean fuel sector, Vigeveno said.

China's commitment to green development was again highlighted by Premier Li Keqiang during the two sessions. He reiterated the goals of peaking carbon emissions and achieving carbon neutrality while delivering the Government Work Report on March 5.

China is aiming to peak carbon emissions by 2030 and achieve carbon neutrality by 2060.

Vigeveno said one of Shell's core aims in China is to allow the company to continue growing through more investments-particularly via the China National Offshore Oil Corp and Shell Petrochemical Co 50:50 joint venture located in Huizhou, Guangdong province, that will supply products like ethylene glycol, polyethylene and polypropylene, among others.

The products will be used in a wide range of end products across industries like healthcare, construction, fabrics, packaging, transport and electronics.

"The project, one of the largest chemical joint ventures of Royal Dutch Shell in China, underlines our confidence in the expansion of our chemical business in China and our long-standing partnership with CNOOC," Vigeveno said.

Shell, already a leading international oil retailer in China, has inked a deal with CNOOC, the largest offshore oil and gas producer in China, to sell LNG from offset carbon emissions last June, thus constituting China's first gas imports of this kind, according to the Shanghai Oil and Gas Exchange.

The two companies will offset the carbon emissions involved in producing and consuming the imports using carbon credits won in projects in the Xinjiang Uygur autonomous region and Qinghai province.

Tang Sisi, an analyst at research firm BloombergNEF, said China's large population base and increasing wealth make it an attractive option for international oil companies' retail business.

Vigeveno said Shell will also continue investing in China in the downstream sector to better serve its growing number of customers in the country-a key future growth market for the company.

"China is absolutely one of the key growth markets for retail and we now have more than 1,700 retail stations in China. Shell plans to increase the number of retail sites we have worldwide from 46,000 to 55,000 this year, and that growth will particularly come from core growth countries like China," he said.

As part of efforts to support China's growth of renewable energy through partnerships, the company is also cooperating with Envision-a top-five global wind turbine original equipment manufacturer-to provide the latter with lubricants for turbines.

Shell currently has five lubricant blending plants in China with three already having solar panels, which has helped reduce the company's emissions. Shell also provides carbon-neutral lubricants across a range of products for passenger cars, heavy-duty diesel engines and industrial applications worldwide including in China, Vigeveno added.

Foreseeing strong ongoing growth over the coming years, he said the company will offer more electric vehicle charging services, in addition to more retail sites and convenience retailing. It is also looking for more business opportunities, having opened its first EV charging facility in Tianjin in 2018.

Shell has also established its first hydrogen-integrated value chain venture in Zhangjiakou, Hebei province, and will invest and build a 20-megawatt renewable power-to-hydrogen electrolyser project and hydrogen refueling stations in the city.

"I believe that hydrogen has very big potential in China as the government has an ambitious growth target of 100,000 hydrogen-cell vehicles by 2025 and 1 million by 2030. The growth potential for infrastructure is huge because there were only 50 hydrogen stations in the country in 2020," Vigeveno said.

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