Shell to ‘re-examine’ £25bn green investment pledge after windfall hike

Shell investment Image credit: siam.pukkato via Shutterstock

Management at Shell has said the company will need to review the green energy investment projects announced as part of a £25bn pledge following the extension of the windfall tax.

The oil giant in March pledged £25bn to invest in UK sustainable energy projects, including “low and zero-carbon products and services, including offshore wind, hydrogen and electric mobility”, over the next 10 years.

Speaking to Sky News, Shell’s UK chairman, David Bunch, said the company would re-examine the projects on a “case-by-case basis” in the wake of Chancellor Jeremy Hunt’s Autumn Statement that included a 10% increase of the windfall tax on oil and gas companies.

“We outlined an investment package five months ago of £25bn, and the one thing I said was we really need a stable fiscal environment to make sure we can get that investment out of the door,” Bunch said.

“Since then, we have had three budgets, a couple of prime ministers, so it’s welcome to see some stability.”

He said that despite this slight increase in stability, Shell would have to use the current fiscal outlook to determine “whether or not we invest to the amount previously discussed”.

Bunch criticised the lack of clarity over the terms of the windfall tax, which was brought in due to soaring energy costs creating record profits for oil and gas companies.

“The current design of the windfall tax does not have an off switch. It doesn’t have a price point at which that windfall tax turns off, said Bunch. “That is something we would like to talk to the government about.”

The original clean energy investment plan from Shell was criticised by figures in the UK clean tech sector, who said the plan fell short of the massive profits made by the oil firm.

Between July and September this year alone, Shell’s profits reached £8.2bn, compared to £3.5bn over the same period last year.