Carbon credit scheme to offset drivers' emissions is due to launch in the Netherlands this month before being expanded to other countries
* Shell expects to spend about $100 mln a year on scheme
* Available in the Netherlands from April 17, UK later this year
* Initiative is part of Shell clean energy budget of up to $2 bln (Adds detail, background)
By Shadia Nasralla
LONDON, April 8 (Reuters) - Dutch drivers seeking to offset their impact on the environment will soon be able to do so at Shell petrol stations with credits to support initiatives such as tree-planting projects.
The scheme is due to launch in the Netherlands this month before being expanded to other countries, the oil major said on Monday as it outlined plans to invest $300 million in the programme over the next three years as part of its clean energy budget of up to $2 billion a year.
The programme is similar to schemes used by some airlines and counts towards Shell's target to cut its net carbon footprint by 2-3 percent within three years, including so-called Scope 3 emissions generated by customers rather than the company's own operations.
Other energy giants, such as BP and Total, have not yet committed to cutting Scope 3 emissions.
Shell's investment will mean the credits incur no extra cost for customers who choose Shell V-Power petrol or diesel. Those who fill up with regular Shell petrol or diesel can participate for an additional 1 cent a litre.
"Shell buys these credits from a global portfolio of nature-based projects ... Each carbon credit is subject to a third-party verification process and represents the avoidance or removal of 1 tonne of carbon dioxide," Shell said.
The scheme will have to be scaled up to have a big environmental effect, said Shell's head of Integrated Gas and New Energies, Maarten Wetselaar.
The voluntary and compliance-based markets for carbon credits covered around 30-40 million tonnes of CO2 in 2017, Shell estimates.
HUGE CHALLENGE
At benchmark prices, Shell estimates $300 million can buy around 60 million tonnes of carbon, with one litre of diesel or gasoline accounting for about 2.5 kg of carbon.
But the challenge is huge.
Research cited by Shell said a reduction of 11 billion tonnes of CO2 a year - equivalent to the emmissions of the United States and European Union combined - would account for about a third of reductions needed to keep global warming under 2 degrees celsius.
"The key thing we're trying to achieve is to help customers decarbonise their energy usage," Wetselaar said.
"If we can do that over time by building a profitable business generating carbon credits at a cheaper cost than the market price, then we'll obviously take that."
Dutch drivers will be able to use the credits for what Shell described as "carbon neutral" driving from April 17. The scheme will then expand to other countries, starting with Britain later this year.
Oil majors have also been expanding gas operations and buying into electricity-related projects among efforts to future-proof their businesses for a lower-carbon world.
Shell drew rare praise from investors and environmental activists in December when it set out plans for targets to reduce greenhouse gas emissions and link them to executive pay and an activist group on Monday said it had withdrawn a shareholder resolution calling on the company to change its climate policy.
(Editing by Kirsten Donovan and David Goodman)
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