Shell eyes bright future for biofuels despite potential combustion engine phase-out

9 Apr 2018 |

Shell has proposed that the US, EU and China ban the sale of new petrol and diesel cars by 2035 to meet emissions goals set out in the 2015 Paris Agreement, in view of the company's longer-term plans to focus on higher margin distillates and advanced biofuels.

The oil, gas and petrochemicals giant laid out its vision for global energy demand in its 'what if' report, entitled 'Sky', that envisions global compliance with commitments set out in the 2015 Paris climate agreement.

The report concludes that passenger vehicles can become fully electricly-powered by 2035, and that road freight will continue to use diesel – owing to “the need for a high-energy density fuel”.

"Biofuels technology, which has the potential to provide essential, high-energy density, low carbon footprint fuels for certain transport applications. Biofuel production could also be developed as a route to negative emissions, as seen in the US today, where CCS has been attached to a bio-ethanol plant," the report says. But it acknowledges that biofuels is another sector "where progress has been slower than originally anticipated".

The Sky report envisages that governments achieve full implementation of carbon pricing by the late 2030s, spurring significant shifts in consumer and producer behaviour including the widespread adoption of hydrogen in the power generation, aviation and marine sectors.

Ahead of a big shift in favour of hydrogen, the adoption of carbon pricing will enable a greater market share of fuel synthesised from biomass, the Shell report says.

"Sky assumes that this is in the form of liquid biofuels, given its greatest flexibility, but if the conversion to methane proves the more successful, then this equally could be in the form of compressed or liquefied bio-gas for ship, rail and road uses," Shell said.

The report highlighted continued reliance on liquid fuels for freight and the existing pool of petrol- and diesel-powered cars, combined with the need to reduce CO2 emissions, sets a framework in which "biofuel use expands rapidly".

In Shell's Sky scenario, the transformation of the passenger vehicle market is largely complete by 2070 and liquid hydrocarbon fuel consumption almost halves between 2020 and 2050, falling by 90% by 2070.

"Even though road freight holds on to diesel into the 2050s, because of the need for a high-energy-density fuel, this sector also experiences its own transformation, split along biodiesel, hydrogen, and electrification lines," it adds.

Shell is a major producer of first-generation ethanol from sugar cane, and is one of the largest blenders and distributors of biofuels, according to its website. 

However the company is viewed as been relatively far behind some other major oil companies in terms of investments in biomethane, and is largely still at an R&D stage in advanced biofuels. 

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