Shell's target to become a net-zero emissions business by 2050 covers the emissions from its operations and the emissions from the use of all the energy products it sells.

Using a baseline of 2016, the world's largest oil and gas trader said it would cut its “carbon intensity” by 6-8 per cent by 2023; 20 per cent by 2030; 45 per cent by 2035, and 100 per cent by 2050.

It predicts that its total carbon emissions already peaked in 2018 at 1.7 gigatons per annum and that its oil production peaked in 2019.

Rather than cutting the emissions it produces to zero, it will rely on a raft of technologies like carbon capture and storage and “nature-based solutions” to offset emissions from its operations and products.

Shell also plans to invest around $4bn (£2.9bn) every year to allow it to add another seven million tonnes of liquid natural gas production to its capacity by 2025 and around $8bn annually for exploration of new oil and gas.

The oil giant has proposed ramping up its renewable power generation, although it did not give definitive figures on exactly how it would go about this other than to say it aims to sell “some 560 terawatt hours a year by 2030” - approximately twice as much electricity (renewable or otherwise) as it sells today.

Greenpeace slammed Shell’s plans claiming it had no requirement to cut absolute carbon emissions, only setting 'emissions intensity' targets, as well as putting the onus on customers and society to change behaviour.

The environmental pressure group also criticised Shell's lack of commitment to cut upstream production and an “impossible reliance” on tree-planting.

“Shell’s grotesque ‘customer first’ strategy seeks to blame customers first for climate change,” said Mel Evans, head of Greenpeace UK’s oil campaign. “Meanwhile Shell, the powerful oil major, brazenly says it will dodge oil production cuts and will simply let output dwindle.

“Without commitments to reduce absolute emissions by making actual oil production cuts, this new strategy can’t succeed nor can it be taken seriously. Shell’s plans include a delusional reliance on tree-planting.

“Communities around the world have been flooded, while others are on fire. Governments are upping their commitments on renewables, while competitors are pivoting, but Shell’s big plan is to self-destruct and take the planet down with it.”

Russ Mould, investment director at AJ Bell, said that Shell’s statement that its oil production peaked in 2019 was “a major turning point” for the oil major, although “some people will be surprised that it isn’t being more aggressive with its move towards renewable energy”.

Mould added: “The company says it will invest roughly twice as much in gas and chemicals and up to four times as much in drilling for oil and gas than in renewables.”

Shell's announcement won warmer support from the Church of England Pensions Board, a major investor in the firm, which has been pushing for the companies in which it is a shareholder to include more ambitious climate targets.

Adam Matthews, director of ethics and engagement for the Church, said: “Shell’s net-zero target is industry-leading and comprehensive as it covers all their carbon emissions.

“In a major step for climate accountability, shareholders will be given a right to an advisory vote on Shell’s climate transition plan at this year’s AGM, which is a first in the oil and gas sector.”

Shell's ambition differs from that of rival energy firm BP in that it covers the emissions from the end-use of products other companies have produced but which Shell sells to customers. BP aims to reduce its oil output by 40 per cent by 2030.

In its 2020 annual report about the future of energy, published in September, BP declared that oil will inevitably be replaced by clean electricity, as the Covid-19 pandemic has almost certainly permanently changed demand. The company also said that the worldwide demand for oil may have peaked and that the fossil fuel industry now faces an inevitable slow decline over the coming decades.

E&T recently investigated the state of the oil market in 2021, asking if the global pandemic, collapsing prices and the green energy revolution all spell terminal trouble for 'black gold'.