In order to meet the challenges of energy transition, Microsoft and Royal Dutch Shell have announced a strategic alliance to jointly develop technologies that will help them accelerate achieving their carbon reduction ambitions, while helping customers and other organisations reduce their own emissions.
Microsoft will help build new artificial intelligence (AI) solutions that accelerate Shell’s digital transformation and Shell will supply products and services that help Microsoft in its drive to net zero carbon emissions.
“These complex challenges can’t be solved in isolation, or by doing business as usual,” says Judson Althoff, executive vice president of Microsoft’s Worldwide Commercial Business, said in a press release. “We are proud to play our role in a sustainable future, and we know that a successful energy transition depends on strong technology partnerships anchored in co-innovation and development with leaders in the energy sector.”
Under the alliance, the two companies will continue advancing Shell’s digital transformation, building on an extensive technology portfolio. With technology flowing both ways, the companies can learn from each other and implement solutions together, which will also create new opportunities for their customers and suppliers to reduce their carbon footprints.
The alliance is expected help Shell suppliers decarbonise. Shell is already using Azure to develop a digital tool to track supplier emissions, show baselines, set targets and develop plans for its own operations to achieve these targets. Going forward, Shell and Microsoft aim to develop additional digital tools to help Shell’s suppliers reduce their carbon footprints.
Shell and Microsoft will also work together to provide tools and solutions that help customers manage their carbon footprint. They will collaborate on a digital platform to help small to medium sized companies calculate their carbon footprints, while exploring new ways for customers to find and access low-carbon solutions and products.
“Together we already develop, test and deliver technologies that push the boundaries of what can be achieved,” Shell Downstream Director Huibert Vigeveno said. “We are proud of our relationship. And today we are going further.”
As Shell supplies energy and products to Microsoft, the alliance will begin to merge digital transformation into energy transformation. Shell is innovating in large-scale renewable energy and advanced technologies that drive efficiency into industrial processes.
Microsoft’s plan is to become carbon negative by reducing its emissions and then removing more carbon from the earth’s atmosphere than it emits. Similarly, Shell’s ambition is to be a net-zero emissions energy business by 2050 or sooner in step with society and customers. Shell recognizes that becoming a net-zero emissions energy business is a huge task. The business plans Shell has today will not get it there, so its plans must change over time, as society and its customers also change.
Shell and Microsoft also are exploring opportunities to advance the use of sustainable aviation fuels. “We are seeing a cultural shift, not just internally, but everywhere. We have to change the way we do business,” said Dan Jeavons, Shell’s general manager of data science. “Microsoft and Shell each have customers across many industries and their needs are changing. Together, we are working to understand those needs and to find ways to address them. That will unlock tremendous value for Shell, Microsoft, our customers and beyond.”
Digital technology will play a key role in the energy transition, which is where the expertise of Shell and Microsoft align.