Shell wants UK to accelerate ban on fossil fuel car sales to 2030

Oil major Shell says that it wants the UK government to make a bold move to ban petrol and diesel vehicles by 2030, accelerating an existing plan by five years even though it seems to undermine one of Big Oil’s key business planks.

The UK government already has a policy in place to ban the sales of new petrol and diesel cars by 2035, and has been mulling over whether to move that target forward to 2032.

Royal Dutch Shell, which has seen significant falls in revenue over the past decade, and fresh from a $US22 billion writedown in the second quarter of 2020 due to global Coronavirus lockdowns, is urging the ban to be brought in even earlier.

“Shell applauds this but believes it could be brought forward to 2030 to make sure the UK meets the 2050 #netzero target,” the company said in a post via Twitter as part of a short thread.

The steps that must be taken were outlined in an article on LinkedIn by Shell’s UK county chair Sinead Lynch, who said “the right policy and incentives could allow the UK to achieve this as soon as 2030, to ensure the UK meets the 2050 net zero target”.

Lynch notes that along with purchase incentives to drive electric vehicle uptake, adequate access to charging infrastructure is required. Lynch says EV owners will charge at home, much like a mobile phone, and will need an “increasing number of faster, high-powered options at forecourts and other public locations.”

Little wonder then, that Shell in February replaced its first service station forecourt with an electric car charging hub, and sees itself becoming a mainstay of the electric vehicle revolution.

Its electric vehicle charging arm Shell Recharge has also expanded into the US, where in late 2019 it installed DC fast charging units made by Australia’s Tritium at Boston airport.

The third piece to the puzzle, Lynch notes, is the use of smart vehicle charging technologies, to help grids manage the extra energy demand that will be created by increasing numbers of electric cars, keeping costs down by reducing the need for grid operators to bolster networks.

“For example, smart technologies can shift the recharge of EVs to happen overnight when the electricity system has surplus capacity. Throughout the day, they can also help to balance the output from renewable electricity production, from wind or solar,” says Lynch.

Of course, Shell has this covered also: in 2017, its energy arm Shell Energy acquired EV charging solution provider NewMotion, which supplies a range of smart AC wall and destination chargers and which recently signed a deal with discount grocery store Aldi to provide 140 charge points across the UK.

Chief market analyst Chris Beauchamp, from UK-based trading firm IG, says that oil companies are at risk of going the way of Kodak and Blu-Ray if they do not keep up with the new era of electrification.

“In a world of falling oil demand and a bigger push towards renewables these energy titans increasingly look like creatures from another era, something which should give investors pause for thought,” Beauchamp was quoted as saying by Marketwatch in regard to Shell’s latest loss predictions.

“While neither Shell nor BP will be going anywhere soon, their importance as dividend payers will likely diminish relative to other sectors,” he added.