Shell CEO Ben van Beurden

Shell teams up with Microsoft in push to lower carbon emissions

Oil major Shell and tech giant Microsoft are embarking on a new strategic alliance to support progress towards a world with net-zero emissions.

Shell CEO Ben van Beurden. Credit: Photographic Services, Shell International Limited/Ed Robinson

Joining other oil majors like BP and Equinor, Shell revealed its plans to become a net-zero emissions energy business by 2050 or sooner back in April 2020.

Shell and Microsoft said on Tuesday that their new alliance builds on the strong foundation of decades of technology collaboration between the two companies.

“Microsoft and Shell both have rich histories of innovation and bold ambitions to decarbonise”, said Huibert Vigeveno, Downstream Director of Shell.

“We are proud of the work we have already done together. Our strategic alliance will enable us to push the boundaries of what can be achieved. We believe we can unlock tremendous progress for Shell, Microsoft, our customers and beyond”.

“We are building on our work with Shell by establishing a deeper alliance to further accelerate innovation in support of decarbonization and energy industry transition”, said Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business.

“Cross-industry collaborations like this are fundamental to help society reach net-zero emissions by 2050, and digital transformation is key to tackling this important issue, within the energy sector and beyond”.

This strategic alliance will support Shell’s ambition to be a net-zero emissions energy business by 2050, or sooner, in step with society and its customers. Shell’s supply of renewable energy will help Microsoft deliver on its renewable energy supply goals and its broader ambition to be carbon negative by 2050.

It is expected that over time the alliance will enable the two companies to achieve even more together.

Under the expanded alliance, Shell will supply Microsoft with renewable energy, helping Microsoft to meet its commitment to having a 100% supply of renewable energy by 2025.

The two companies will continue working together on artificial intelligence (AI), which has already driven transformation across Shell’s operations through access to real-time data insights, contributing to the worker and onsite safety, and delivering efficiencies that have helped reduce Shell’s carbon emissions.

Shell and Microsoft will work together on new digital tools so Shell can offer its suppliers and customers effective support in reducing their carbon footprints.

Shell and Microsoft will also explore working together to help advance the use of sustainable aviation fuels; and the companies will use Microsoft’s Azure cloud computing system and data from Shell assets to strengthen operational safety, by improving risk analysis, prediction and prevention.

Shell and Microsoft have been working together on AI for three years. So far this year, 47 AI-powered proprietary applications have been deployed across Shell’s businesses. Technologies such as Real-Time Production Optimisation have already shown potential to reduce CO2 emissions in Shell’s liquefied natural gas (LNG) operations. The companies are committed to accelerating their AI work together to drive efficiencies and reduce emissions.

Shell and Microsoft have worked together to develop technologies that help keep Shell’s workers and sites safe. For example, Microsoft Azure powers Shell’s Autonomous Integrity Recognition (AIR) system, which uses image recognition algorithms to detect when equipment or parts of a site are susceptible to corrosion.

As previously reported, Shell has recently launched a major cost-cutting drive to save cash and overhaul its business in preparation for the energy transition.

The oil major is looking to cut up to 40 per cent off the cost of producing oil and gas as part of a drive to save cash to overhaul the business and focus more on renewable energy and power markets.

Shell is not the only oil major to cooperate with Microsoft in efforts to reach net-zero goals.

BP has also recently agreed with Microsoft to collaborate as strategic partners.

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The agreement between BP and Microsoft includes a co-innovation effort focused on digital solutions, the continued use of Microsoft Azure as a cloud-based ‎solution for BP infrastructure and BP supplying renewable energy to help Microsoft meet its 2025 ‎renewable energy goals.‎