Shell plc

If required, we may choose to use high-quality carbon credits to offset any remaining emissions from our operations, in line with the carbon mitigation hierarchy of avoid, reduce and compensate.

Working to reduce our absolute Scope 1 and 2 emissions

Scope 1 and 2 emissions in million tonnes of CO2e [A],[B]

[A]The 2016 baseline may be recalculated if an acquisition or a divestment has an impact of more than 10% on total Scope 1 and 2 emissions. There was no such event in 2024.

[B]Operational control boundary and presented on a net basis (i.e. inclusive of any use of carbon credits).

[C]Including compliance and voluntary carbon credits as required.

Progress towards our NCI target

Unlike Scope 1 and 2 emissions, reducing the NCI of the products we sell requires action by both Shell and our customers, with the support of governments and policymakers to create the right conditions for change. The biggest driver for reducing our NCI is increasing the sales of and demand for low-carbon energy. The chart below illustrates how changes in the volume of products and services we sell could result in NCI reductions towards 2030. The change in our sales of these products and services will also reflect the development and adoption of new technologies and infrastructure, and the adoption of public policies designed to encourage the energy transition.

Working to reduce our NCI

NCI in gCO2e/MJ [A], [B]

[A]Grams of carbon dioxide equivalent per megajoule.

[B]In 2024, we revised the 2016 baseline NCI value from 79gCO 2 e/MJ (g) to 78g. The 2022 and 2023 values were respectively revised from 76g to 75g and from 74g to 72g.

[C]Hydrocarbon sales reflect the effect of lower sales of oil products, and higher sales of natural gas. Emissions associated with gas are lower than those of oil products.

[D]Power sales show the expected growth of our integrated power business and increasing sales of renewable power.

[E]Sales of low-carbon fuels reflect higher sales of biofuels and hydrogen, which are low- and zero-carbon products.

[F]CCS reduces carbon emissions by capturing them at source.

[G]High-quality carbon credits such as nature-based solutions can be used to offset remaining carbon emissions, particularly in hard-to-abate sectors such as aviation and industries including cement and steel.

Linking Shell's emissions targets to remuneration

We have established remuneration structures to support us in reducing our operational emissions and to support customers in reducing their emissions. The majority of employees participate in the annual bonus scheme which is linked to the Group scorecard. From 2025, the Long-Term Incentive Plan (LTIP) is referred to as the Performance Share Awards (PSA) and no further Performance Share Plan (PSP) awards will be made. Our annual bonus scorecard and PSA include "Shell's journey in the energy transition" performance metrics, which are designed to ensure that remuneration is aligned with Shell's Operating Plan and longer-term strategic ambitions.

PSA will be awarded to Executive Directors and around 120 senior executives. Circa 12,000 employees will receive PSA and/or Restricted Share Awards (RSA), which are time-based, based on seniority.

See "Directors' Remuneration Report" on pages 180-182.

Energy transition performance condition and the vesting of the 2022 LTIP and PSP awards

The following performance outcomes for the energy transition performance condition were considered in the vesting assessment of the 2022 LTIP and PSP awards, covering the performance cycle 2022-2024:

2022 LTIP energy transition performance condition: outcome

In addition to the above, a number of broader indicators of Shell's progress in the energy transition were considered. Overall, it was determined that the energy transition measure (accounting for 20% of the LTIP award and 10% of the PSP award) should vest at 130% of the target. See "Long-term Incentive Plan vesting: 2022 LTIP - 2022 LTIP energy transition performance conditions outcome" on pages 190-192 for more informa tion.

Energy transition performance condition in the 2024 LTIP and PSP awards

For LTIP and PSP awards granted in 2024, the energy transition performance condition had a weighting of 25% in the LTIP and 12.5% in the PSP. Determination of the extent to which awards will vest will be based on its holistic assessment of progress towards reducing emissions from our operations and supporting customers to reduce their emissions.

Energy transition performance condition for 2025 PSA

For the 2025 PSA, the "Shell's journey in the energy transition" performance condition retains the same weighting and performance assessment framework as for 2024. The determination of the extent to which awards will vest will be based on an holistic assessment of progress towards reducing emissions from our operations and supporting our customers to reduce their emissions. This will be based on climate-related targets for our own operations of: