Providing customers with carbon-neutral¹ solutions

Shell provides approximately 5 billion liters of finished lubricants to customers worldwide each year. From aviation and power generation to maritime transport and mining, whether for passenger cars or commercial vehicles, these lubricants help keep the world running by ensuring that machinery continues to operate efficiently at peak performance.

However, behind this performance, it remains essential to strike a balance between boosting operational output and reducing environmental impact. As demand evolves, so too do expectations. Today, both customers and consumers expect brands to offer sustainable solutions that make it easier for them to make environmentally responsible choices.

Shell Carbon Neutrality ¹ Lubricating oil

We recognize that customers are increasingly demanding sustainable solutions. Therefore, to meet this growing industry demand, Shell is exploring a range of initiatives aimed at avoiding, reducing, and offsetting emissions, while also helping consumers and customers find solutions that align with both their operational goals and sustainability objectives.

The latest step in this initiative is the launch of our carbon-neutral lubricants. ¹ Series. In addition to helping avoid or reduce emissions through material selection and improved operational efficiency, Shell’s global nature-based carbon credits have enabled the carbon neutrality of the following lubricant products, including:

• High-end passenger car engine oil
• Heavy-duty diesel engine oil
• Industrial product portfolio

This initiative is one of the largest and most significant carbon-neutral programs in today’s lubricant industry, aiming to offset the carbon dioxide equivalent emissions from more than 200 million liters of high-quality lubricants. ³ Emission. ⁴

Shell Carbon-Neutral Lubricants

We plan to offset 700,000 tons of carbon dioxide equivalent annually, covering all stages of the lifecycle of our key lubricant brands in our product portfolio. This represents a significant milestone in our ongoing commitment to achieving two key strategic goals:

1. Reduce the carbon dioxide emission intensity of the product

This is achieved through the following method:

• Avoid emissions by the following methods:
  • Integrate the concept of a circular economy into business.
    Shell will use more recycled materials in our plastic bottles. In Europe, we are developing plans to technically demonstrate that our bottles can be made using recycled resin. In the U.S., we are testing higher levels of recycled content and plan to increase it beyond the current regulatory requirement of 25% recycled resin. We are also planning to incorporate recycled resin into some of our larger plastic packaging, such as drums.
  • Design products with lower greenhouse gas emissions and more environmentally friendly packaging.
    We are exploring different packaging concepts that are more sustainable—meaning alternative materials or alternative supply-chain models. For example, the Ecobox used in the U.S. and China serves as an alternative to traditional plastic packaging for passenger car engine oil, reducing the amount of plastic used in packaging by more than 80% and cutting carbon dioxide equivalent emissions by over 60%. ⁵ 。

• Reduce emissions through the following methods:
  • Improve the energy efficiency of Shell's plants.
    Since 2016, we have reduced the carbon intensity of our operations by more than 30%. ⁶
    All of our factories are equipped with Energy Monitoring Systems (EMS) and LED lighting, enabling us to enhance energy efficiency at our sites. For example, the EMS pilot program at the Tianjin factory helped reduce electricity consumption from 2017 to 2018. 8.5%.
  • Increase the use of renewable energy.
    More than 50% of the electricity used at Shell’s global lubricant blending plants now comes from renewable energy sources. We plan to further increase this proportion by expanding the solar installations at Shell’s facilities. Together, these solar panels generate over 7,500 megawatt-hours of electricity annually and can help avoid approximately 4,500 tons of CO2 equivalent emissions each year.
  • Reduce carbon dioxide equivalent emissions in the supply chain
    Shell operates LNG trucks on certain routes, which produce lower CO2 emissions than conventional trucks. Additionally, an optimized network helps reduce road transportation distances by more than one million miles, and low-viscosity synthetic lubricants can further lower fuel consumption.

• Offset emissions through the following methods:
  • Compensate for carbon dioxide equivalent emissions throughout the product lifecycle.
    The lifecycle of lubricating oil includes: raw material acquisition, transportation, production, distribution, use, and waste disposal.
  • Utilize globally diversified, externally certified, high-quality, nature-based carbon credits.
    Each carbon credit represents the avoidance or removal of greenhouse gases equivalent to one ton of carbon dioxide.
  • Protect and restore natural ecosystems.
    Shell Lubricants supports internationally recognized carbon offset projects, such as the Katingan Mentaya Project in Indonesia or the Qinghai Reforestation Project in China. These projects naturally remove carbon dioxide from the atmosphere each year while also enhancing biodiversity, protecting endangered species, and supporting local communities.

2. Assist customers in managing their sustainability needs.

This is achieved by providing high-quality products and leading-edge technologies that can:

• Reduce friction and wear
• Extend the service life of engines and machinery.
• Improve fuel economy, extend oil change intervals, and enhance energy efficiency.
• Reduce the resources required, waste generated, and emissions.

Low-viscosity lubricants can improve fuel economy by 3%. ⁷ and increase energy efficiency in industrial applications by 4%. ⁸ Moreover, many of our industrial lubricants offer significant advantages in terms of extended oil-change intervals—such as reduced maintenance requirements and fewer part replacements. For example, Shell Myscience S7N, our latest-generation gas-engine oil, boasts an oil-change interval that’s more than twice as long as that of previous-generation gas-engine oils. ⁹

As we all move toward a low-carbon future, integrating these two goals will help provide global customers with more and cleaner energy solutions. Shell Lubricants is committed to enabling customers to maintain optimal operational performance while reducing emissions, minimizing waste, and decreasing the use of natural resources—this is precisely how we can uphold sustainable development without making any compromises.

¹  _{The term “carbon neutrality” refers to Shell’s participation in a transaction in which the carbon dioxide equivalents (CO2e) associated with raw material acquisition, transportation, production, and distribution are offset by removing CO2e from the atmosphere through the protection of natural ecosystems or nature-based solutions. CO2e (carbon dioxide equivalent) refers to CO2, CH4, and N2O.}
²  _{Kline & Co [ https://www.shell.com/business-customers/lubricants-for-business/news-and-media-releases/2019/shell-retains-leadership-of-global-lubricants-market-for-thirteen-consecutive-year.html ]}
³  _{CO2e (CO2 equivalent) refers to CO2, CH4, and N2O.}
⁴  _{The product’s lifecycle emissions in terms of carbon dioxide equivalent have been offset by certified nature-based carbon credits.}
⁵  _{Compared to five separate 4L Shell Helix bottles, the plastic lining inside the box has been reduced by more than 80%.}
⁶  _{Shell internal analysis.}
⁷  _{Comparison of ACEA M111 fuel economy results with those of the industry reference oil.}
⁸  _{Shell Delo S4 VE can help save up to 4.4% of energy per hour in injection molding machines (Shell and third-party field tests).}
⁹  _{The figures are based on more than 10 Jenbacher Type 6 engines and over 45,000 hours of field testing.}