Adapted from a phone interview on August 11, 2020.
Q: How has COVID impacted you personally and professionally?
This is month five of working from home in the Netherlands. On the personal front, there’s actually been some benefit. My wife, Marissa Galizia ’15, works for ChargePoint. We both had hectic schedules with a fair amount of international travel. We might see each other twice during the week; sometimes we’d even miss each other on the weekends. Both of us working from home has meant a lot more time together. It has also meant that we’re expecting a baby at the beginning of December.
Professionally, it took some time to retool. For a team whose focus is innovation, how do we create an environment where sparks happen? That has felt more challenging in this period. We experimented with digital ways to create the dynamic, high-energy, high-engagement experiences that we’re used to. It works better than I expected. But I thrive on deep interaction, so having to do so much through a screen does saps my energy sometimes.
Q: You lead the carbon opportunities team for Royal Dutch Shell. What does your team do?
In 2018, I helped create Shell’s Carbon Opportunities team and have been leading it since then. We’re kind of a skunkworks. We look for novel business opportunities to reduce our internal emissions or for decarbonized products that Shell can profitably sell to new or existing customers.
We bring an opportunity-focused mindset to how we approach the challenge of helping society meet the Paris Climate Agreement. It’s an intrapreneurship role. While some of our projects may ultimately have external customers, we collaborate with the different business units inside the company to invest in and scale the opportunities we develop.
Q: Is that hard when you’re working at an oil company?
I’ve always looked for roles that put me in the position to make the business case for reducing CO2 emissions. Initially, I joined Shell in a strategic role, helping the company understand the risk and opportunity space around climate change. Then, in 2017, the company made a step change. From 2017 through 2020, we’ve set ourselves progressively more challenging climate ambitions, which now would see the company becoming a net zero emissions energy business by 2050 or sooner, in step with society. Our current business plans don’t get us where we want to be, so to achieve this ambition, our business will therefore need to change. Shell will need to sell much more low-carbon energy products as a proportion of our total sales, reduce the emissions from our own operations, and partner with our customers in their decarbonization journey. We’ve also turned parts of this aspiration into short term targets that are tied to executive compensation.
The timing was perfect for creating the Carbon Opportunities team aimed at exploring new business models that help that transition happen.
Shell now sees itself not as an oil company but as an energy company. That’s not just marketing. We have a deep understanding of how customers and how industries use energy. While we still primarily generate income from selling fossil fuels, the leadership conclusively understands that we will be transitioning to be a low-carbon energy business. We are going to be changing the kinds of energy that we create and sell radically over the coming decades. We’re looking at renewable power, biofuels, hydrogen, carbon capture and storage.
Q: Could you give an example of a project your team help bring about?
We’ve helped to develop a business that uses nature-based solutions to reduce the net carbon footprint of the energy products that we sell. Cutting down forests or destroying peat or wetlands produces a lot of CO2 emissions. Shell, either directly or through partnering with project developers, has started funding a growing portfolio of conservation or restoration projects that verifiably either reduce atmospheric carbon or avoid additional carbon emissions. Those carbon credits are linked to a specific product, letting us offer an offsetting mechanism to customers that still need to use fossil fuels.
For example, in the Netherlands and in the UK, Shell customers can drive “carbon neutral” when they fill up with certain kinds of Shell fuel. Shell sold some of the first “carbon neutral” liquefied natural gas cargoes using this same approach.
When your optimizing condition is to try to contribute to keeping the global temperature rise below 1.5 degrees Celsius, utilizing the power of nature to store carbon is something you just can’t overlook.
Q: How do you innovate within such a large company? And what has the arrival of COVID meant for that process?
“There’s tremendous energy for playing a role in energy transition from all across the company, even though not everyone at Shell has that as their day job.”
There’s tremendous energy for playing a role in energy transition from all across the company, even though not everyone at Shell has that as their day job. Before the pandemic we were leading workshops to open source innovative ideas, in a program called Project Grassroots. When groups came up with something promising, we helped them to incubate it.
That gave my team a lot of exposure to the wide variety of backgrounds and skillsets at Shell. It is also one way to overcome the geographic bias of a team that’s based in Europe and the U.S. If you look at where most of the emissions growth is coming from now and where most of the energy demand will come from in the future, it’s in the East and in the developing world.
It took some work to figure out, but we’re doing the workshops virtually now, and they are working.
Q: The pandemic has also created economic fallout. Is that shifting how your team works?
This crisis hit many industries in extremely acute ways. Shell is not immune. We’re going through a period of reduced capital spending. Generally, the ideas our team develops help to reduce costs or certainly to reduce risk over time. Even so, I was concerned about what would happen to the pipeline of opportunities that we have been developing. But during the pandemic Shell announced a deepening of the company’s climate ambitions. A big part of how we see that playing out is creating energy products that help other industries decarbonize. We’ll have to compete harder than we normally would for capital, in the short term. But, over the medium term, if anything the outlook for my team’s projects has improved.
Overall, the core of what Shell is doing—the energy transition—is unchanged. The core of my team’s work—finding innovative ways to deliver on that transition—hasn’t changed. The way that we talk about and sell our projects is changing a bit. Our team focuses on the business models coming out of these ideas. We’re helping people understand how, and over what time period, the idea would add value. At the end of the day, this is a for-profit company; our work has to have a dollar value. At the same time, we do a very good job of explaining the deep strategic and risk mitigation value too.
Q: What do you expect going forward as COVID and climate change fight for attention and resources?
It’s unclear, in so many ways. How will companies emerge from COVID? How will governments support a recovery? Will we support each other through the really complicated stuff that needs the most work?
The key challenges that we’re facing right now—racial justice, climate change, COVID—there are deep interdependencies. It’s a mistake to try to handle each crisis separately. The solutions are likely to be comprehensive and integrated.
As an example, the EU is proposing to provide government funding for COVID recovery that’s linked to making it possible to meet its 2050 climate aspirations. It’s still early in the process, but there look to be mechanisms that will catalyze private investment alongside of government support. I think that’s exactly the right way to approach this. Unless we all move forward in a pragmatic collaborative way, it’s going to be hard to make the kind of progress that we all need.
”When I first started with this work, I felt like, ‘This is really daunting.’ I’ve come to really appreciate that’s a signal that I’m in the right place.”
It’s complicated and hard. When I first started with this work, I felt like, “This is really daunting.” I’ve come to really appreciate that’s a signal that I’m in the right place. What kind of innovation is it if you’re not really challenged and doubting?
When I chart my career, what’s most exciting for me are the deepest, interdisciplinary challenges. Within a very fragmented political space, within COVID, doing this work is the most beautiful, complicated, and fulfilling kind of role that I can imagine. I feel incredibly fortunate to be at a company with the resources of a Shell at a time when making this energy transition succeed as a business really matters.
A note from Tyler van Leeuwen: I currently work as Group Carbon Opportunities Manager at Shell International Ltd. The views expressed in this interview are mine and do not necessarily reflect those of Shell. The companies in which Royal Dutch Shell plc directly and indirectly owns investments are separate legal entities. In this document “Shell” is used for convenience where references are made to Royal Dutch Shell plc and its subsidiaries in general.