Shell’s decision to cut 200 low-carbon jobs and review another 130 reflects its retreat from renewables and a shift in focus towards high-margin projects in the oil and gas sector.

In a move that signals a continued retreat from renewables, oil and gas giant Shell has announced plans to cut 200 low-carbon jobs and review another 130 positions. The cuts will primarily affect the low carbon solution and hydrogen divisions, as the company moves away from work on powering hydrogen cars.

The low carbon solution division, which includes carbon capture storage and nature-based solutions, will see a reduction of 15% in its staff, while renewable power will remain unaffected. The light hydrogen mobility unit, which focused on hydrogen solutions for cars, will be hit the hardest, with two out of four general manager roles in the hydrogen section being merged.

Despite these job cuts, Shell remains committed to investing in viable low carbon business models and playing its part in the decarbonization of the global energy system. The company has already closed its hydrogen car refueling points in the UK, as consumers have increasingly chosen electric cars over hydrogen-powered vehicles.

The decision to cut jobs and shift focus away from renewables comes as Shell’s new chief executive, Wael Sawan, seeks to boost profits and gas production while maintaining steady oil output. The company aims to prioritize high-margin projects, such as oil when prices are high, instead of pursuing renewable-electricity capacity targets.

Shell’s shift away from renewables is reflected in its investment strategy. In 2022, the company spent only 17% of its total capital expenditure on low-carbon energy solutions, including renewable power, electric vehicle charging, and biofuels. Instead, it plans to invest more than six times as much on fossil fuels compared to clean power.

While these cuts may be disappointing for those passionate about the environment, Shell’s decision highlights the challenges faced by traditional oil and gas companies as they navigate the transition to a low-carbon future. As the energy landscape continues to evolve, companies like Shell will need to find a balance between profitability and sustainability.