Shell Notes Main Energy Trends For 2023

Shell has noted five trends in its 2023 energy sector outlook related to energy security, economics, and transition to low-carbon sources.


Supermajor Shell has noted five trends in its 2023 energy sector outlook related to energy security, economics, and transition to low-carbon sources.

Shell said in its energy outlook for 2023 that the energy transition was not something that stands on its own and that it must exist as a natural balance with energy security and economics.

Within the context of those three elements, the supermajor noted five trends that Shell sees as most impactful in the energy sector in 2023.

“As we enter 2023 and learned even more from 2022, it is important that we continue to remain flexible to adapt to changing world markets and geopolitical dynamics. The world has a growing need of energy and an urgency to limit global warming – all means needed to strive through with current core products in a more sustained way as well as thriving into the future energy transition, while delivering energy sources to all people worldwide,” Elise H. Nowee, President of Shell Catalysts & Technologies, said.

Impact of inflationary pressures resulting in high supply chain cost

Shell believes that work will continue in a tough and severe environment. The industry will remain exposed to the challenges of higher energy prices, higher raw material costs, and logistics shortages. These market dynamics will continue to impact the business and prices of catalyst products well into 2023.

Now, things are slowly and steadily improving on logistics, and though hard to predict the energy prices should come down with a changing supply and demand balance. According to Shell, there will be an equilibrium in energy usage in many regions. Consumers and industries reducing their energy demand by lower consumption, optimization, and transformation. The supermajor expects that the wave of traditional investments, travel and consumer buying hype that we had seen coming out of Covid, will be slowing down with high inflations.

The company believes that the world will focus and move more and more into the energy transition where investments will continue to be high in the coming decades to make a material difference to climate.

Resilience in the context of geopolitical pressures

Countries are moving away from being highly dependent on imports and exports. Many governments want companies to not only have a presence in the country they are headquartered but also to have their assets there. Through the challenges of Covid-19 and the Russia-Ukraine war, people increasingly focus on more local products and businesses with a shorter and more secure supply chain.

Shell said that it invested tremendously in the security of full value chain to continue to supply customers in time. The company believes that its global footprint helps with resiliency through local and geopolitical tensions.

Innovation in decarbonization solutions to achieve net-zero ambitions

The varied pace of change inhibits advancement toward Paris Agreement goals. Shell claimed it has great potential in joint value chains to accelerate progress toward net-zero ambitions. Additionally, there is a growing need to diversify energy sources and engage in the circular economy.

The company added that it was investing in new energy sources like hydrogen and CO2 to produce liquid fuels and treating and processing biowaste into renewable fuels. Also, Shell, KLM, and the Dutch Ministry provided sustainable aviation fuel for a February 2021 passenger flight from Schiphol to Madrid. A leg of the flight was completed using synthetic kerosene.

On top of this, Shell is looking to decarbonize. That means that in the 20-30 years to come, oil and gas will still be needed. Shell claimed that there were not sufficient alternative sources that can supply the energy required for a growing population of 8 to 10 billion by 2050.

To meet these demands for more and cleaner energy, there are multiple solutions for refineries to maximize the value out of the barrel, increase energy efficiencies in production, lower emission levels and increasingly recycle material, waste and used products back to plastics, lubricants, or base oils to support the circular economy.

Along with decarbonizing existing assets, Shell said it would be continuing to advance the availability and affordability of different energy sources to reach our energy transition ambitions.

Innovation in core refining and petrochemical businesses

The advanced technologies developed by the R&D team supports Shell’s target to become a net-zero emissions energy business by 2050. The breakthroughs from the lab and testing sites are now being realized at scale at the Shell Energy and Chemicals Park Rotterdam where facilities once used to process crude oil are now being transformed to process low-carbon fuels from industrial and agricultural waste.

At the Shell Energy and Chemicals Park Rheinland, Germany, existing facilities are being repurposed to chemically recycle lubricants for reuse.

Collaborate to accelerate energy transition progress

“If the planet wants to limit global warming to 1.5 degrees by 2050, we must work very closely together. We can only be successful if we collaborate to accelerate. We all know that we must accelerate to reach Paris Agreement goals,” Shell said in the outlook.

Shell has been focused on the early stages of progress, but it is not only Shell and the industry that must drive change – it also requires communities, governments, and countries to work together.

“As a company, we want to provide access of energy to all people over the world. Shell Catalysts & Technologies is working closely with many parties in the value chain to powering and transforming energy together. We do bring our great expertise, technical solutions, and track record of high-quality delivery over decades,” the company stated.

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