Speaking at a recent All Party Parliamentary Discussion on Peak Oil and Gas, the group’s general manager for alternative energy and fuel development, Arthur Reijnhart, said a more diverse selection of fuels would be vital for counteracting the growth in energy demands by 2050, caused by emerging economies and population growth. Some 96% of all transport is driven by oil-based fuels.

‘It’s not easy to switch,’ he said. ‘Fuels need to compete on the availability, affordability and environmental impact, and Shell is not willing to be sacrificing any of these. It’s too easy to say if there’s a fuel that does it all, until then there’ll be a combination.’

The group is already investing in biofuels, particularly sugar cane ethanol in Brazil, while “second generation” biofuels from woodchips and biowaste are predicted to represent “percentages of its oil business“ in the future.

Reijnhart said cost, range and technology was a challenge to electric vehicles, but that this could be suitable for urban transport. Shell believes plug-in hybrids will offer broader appeal, with hydrogen promising as a future fuel due to its abundance and zero tailpipe CO2 emissions. But this isn’t expected to be a money-making industry until 2025, reaching maturity in 2035, and is reliant on greener hydrogen production before it offers significant CO2 reductions

‘The problem is commercial, the tremendous up-front cost of the change,’ Reijnhart explained, ‘It needs to compete and to reach the scale where the selling of hydrogen is a self-sufficient proposition. But the market needs to cross that bridge, then the building blocks are in place to decarbonise hydrogen production.’

‘The future isn’t fuelling everything from small cars to planes with oil-based fuels. We see liquid hydrocarbons as the majority of the mix, for the next two decades. The more power required the more you’re tied to liquids, including biofuels. The light duty sector will make the biggest changes.’