Nature may not be the root cause of climate change, yet Shell is using natural climate solutions as part of its strategy for reducing its net carbon footprint (NCF). Established in 2018 as part of the New Energies business, Nature-Based Solutions invests in the restoration and protection of natural ecosystems to offset Shell’s carbon emissions and increases the ways in which Shell and our customers can avoid, reduce and mitigate its greenhouse gas emissions to help meet the goals of the Paris Agreement. Laura from GOS spoke with Jessica Hinojosa, a geoscientist supporting Nature-Based Solutions, about her challenges and perspectives working in this field.
Laura: why is Nature-Based Solutions important?
Jessica: In short, we can’t meet the goals of the Paris Agreement – both globally and within Shell – without utilizing nature’s ability to absorb CO2, especially in the next few decades before clean energy becomes globally widespread. That’s the crux of our Nature-Based Solutions business: the protection and restoration of natural ecosystems through managed projects, such as planting new trees or protecting existing peatlands. These projects typically last 30 years or more, and you’re getting carbon credits, associated with CO2 uptake, throughout the project’s entire lifetime. Of course, skeptics will say: how can you prove in year 10 that the trees are still there? So we have to have these regular verification events where accredited organizations go out and say, yep, the trees are still there, they’ve grown as much as expected, and then a third party agency issues the carbon credits. So it’s really critical when the auditor comes that you can quantitatively demonstrate how much carbon is there. My team at Shell is trying to develop different technologies and techniques to make that as robust, low-cost, and scalable as possible.
What is the most surprising aspect of the work?
Just the pace of evolution in this field, and by that, I mean the evolution of the business. It seems every week or every month there’s this exciting headline, where a new ‘first-of-a-kind’ project is announced. And then there’s also these big carbon reduction commitments from major companies, both in the oil sector and elsewhere. Since I’ve been in this role, both Apple and Microsoft have made pledges to become carbon neutral – all these big companies are making these pledges and all of them have nature-based solutions part of their toolkit that they are going to use to reach that ambition. It’s really quite crazy to see the scale of growth in NBS markets and the pace of its adoption among big companies. So that’s kind of exciting because I think it will become much more of a household concept within the next decade.
“The longer we wait, the more Nature-Based Solutions becomes critical…”
What are the challenges?
I think one of the biggest challenges is just understanding how this will take shape in the future. A lot of the projects, you commit to a 20 or 30 year project – sometimes even longer – and in order to predict whether this is a viable opportunity, you have to forecast both how you think the ecosystem will change over 30 years, and then also another layer of uncertainty is how the carbon price will change. When we generate a carbon credit, we can sell it to our customers or trade those credits on a market, or use the credits towards offsets of Shell’s NCF. Right now, you can buy offsets for a tonne of CO2 from anywhere between roughly a few to a few tens of dollars, depending on the marketplace, and we expect that to go up significantly in the future as countries start regulating CO2 and greenhouse gas emissions – but we don’t really know. So, when you say, “I think this project will break even in terms of the amount that we invest and the amount of credits that we get out”, it’s just really hard to forecast. There are all sorts of uncertainties with the future.
What do you enjoy the most from the role?
One thing that has been very fun compared to both previous life in academia and my previous role within Shell, is this role has a really international scope and it’s looking at a lot of things at once. If I take my PhD for example, I was studying this one area of Southern New Zealand for years, and I got to know that one little area of Southern New Zealand very, very well. Now, this is the total opposite, it’s like every other week there’s a potential project that comes across my desk and it’s in some cool exotic region of the world, and it allows me the opportunity to wander into that country’s politics and learn what they are doing in terms of their commitment to the Paris Agreement. So I feel like I’ve learned a lot already about different countries – it opens up the world to me, which is really cool.
What are the goals for the future?
I think the biggest thing is just growth of the business. We are really keen to launch projects in spaces outside of forestry, so looking at other ecosystem types like grasslands, wetlands, mangroves and coastal ecosystems. I think those are the primary goals – to have a ‘first-of-a-kind’ project in these different ecosystems, learn from those and then scale up pretty quickly. And, I think as Shell’s net carbon footprint ambition has evolved, Nature-Based Solutions has become a bigger and bigger part of it. So as time continues to pass and we are all trying to meet a emission reductions set by the Paris Agreement, the longer we wait, the more Nature-Based Solutions becomes critical, because it’s the only thing we can do in the near term that we know works and is affordable.
For more information, please visit www.shell.com/naturebasedsolutions
Jessica Hinojosa is a scientist and researcher with Biodomain, supporting the Nature-Based Solutions business. She has a PhD in geochemistry and currently lives in Houston, Texas, where she works for Shell USA.