Shell is urging the UK government to give clear guidance on the future of the North Sea’s oil and gas sector. The call for “certainty” comes after the government announced higher taxes on profits from oil and gas, stirring concerns among big energy players. In the latest budget, Labour’s Rachel Reeves bumped up the energy profits levy to a hefty 78% for energy producers until 2030, aiming to close previous loopholes that allowed these companies to dodge taxes by investing in new fossil fuel projects.

Shell’s finance boss, Sinead Gorman, spoke out after the announcement, saying, “The government needs to balance its budget, but it should also make policies that give us stability.” She highlighted how Shell, along with other energy companies, invests for the long term and can’t make sound decisions when tax policies keep changing. Shell, one of the last major oil companies in the UK’s North Sea, has watched as others have left the region, partially because of these tax hikes.

The company’s third-quarter report brought even more attention to the situation, revealing stronger-than-expected profits. Shell raked in $6 billion in profits from July to September, surpassing analyst predictions of $5.36 billion. Despite weaker oil prices, the company achieved higher profits, mainly by selling more gas. Shell also announced another $3.5 billion in stock buybacks, which is a way to reward shareholders.

While Shell’s profits were high, its investments in renewable energy have taken a backseat. The company revealed that it spent only 8% of its capital budget on renewables in the third quarter, which is notably low. Earlier in March, Shell softened its goals for cutting carbon emissions, which meant it scaled back on renewable projects. During this time, Shell’s renewable and energy solutions spending amounted to $409 million from a total budget of almost $5 billion for the quarter.

Activist groups and environmentalists are disappointed in Shell’s choices, saying the company is not doing enough to shift to cleaner energy. Mark van Baal, head of the activist group Follow This, was blunt, warning that Shell’s focus on fossil fuels “risks the company’s future.” Shell’s leadership, however, defends its strategy, arguing it is part of a balanced approach.

Shell shared with The Guardian that while only 8% of its budget went to renewables, it’s also investing in other areas of clean energy like electric vehicle charging and biofuels. These investments are part of a different business division, so they aren’t included in the renewable budget breakdown. Shell is aiming to spend $10 billion to $15 billion on low-carbon energy between 2023 and 2025, making it a major investor in this sector.

Wael Sawan, Shell’s CEO, expressed satisfaction with the results, saying the company is delivering “more value with less emissions.” Shell plans to boost its natural gas production over the coming years, a decision that has raised eyebrows among climate experts who argue that new fossil fuel projects counteract global climate goals. In fact, Shell’s gas business was the main driver of its higher-than-expected profits, with the sector earning $2.9 billion this quarter, up from $2.5 billion in the same period last year.

Campaigners see Shell’s massive profits in a different light, criticizing the company’s focus on pleasing shareholders rather than addressing climate change. Aakash Naik, a campaigner at Greenpeace UK, pointed out that Shell profited over £4 billion in just the last three months and plans to return even more to shareholders. Meanwhile, extreme weather events linked to fossil fuel emissions have been devastating communities worldwide, causing billions in damages and costing lives.

Shell has publicly recognized the urgent need for climate action. A spokesperson stated, “We agree the world needs urgent climate action. Shell is playing an important role in the energy transition by supplying energy now while also helping to build the low-carbon system for the future.” This commitment includes their $10-15 billion plan for low-carbon projects over three years.

As the UK’s North Sea oil and gas sector grapples with new tax pressures, Shell is taking a firm stand on the need for more predictable policies. The back-and-forth on tax rates in recent years, such as Rishi Sunak’s introduction of the energy profits levy in 2022, has made long-term planning a challenge for companies. This is particularly relevant for Shell, which continues to engage with the government about how to create a stable tax framework. Sinead Gorman emphasized the need for a fiscal setup that allows Shell and others to contribute to the North Sea’s future and the broader UK energy transition.

While Shell’s profits remain robust, it’s clear the company’s approach to renewables and fossil fuels has become a source of contention. On one hand, shareholders are seeing positive returns, while on the other, environmental groups are questioning Shell’s commitment to a sustainable future. The government’s tax policies are designed to push companies toward cleaner energy, but the actual impact may depend on how effectively Shell and others can pivot their investments toward a lower-carbon world.

As Shell moves forward, balancing shareholder demands, climate goals, and government tax regulations will be an ongoing challenge. The energy giant has made strides in transitioning toward renewable energy but remains deeply invested in fossil fuels. Shell’s future and its role in the North Sea will likely hinge on how it navigates these complexities, especially with climate concerns and global policy pressures intensifying.

In the meantime, Shell’s current stance is clear: it needs stability in the North Sea. This request isn’t just about taxes; it’s about making sure the company can plan its investments confidently, whether in oil, gas, or the clean energy solutions of tomorrow. With climate activists watching closely and government policies aiming for a greener future, Shell’s next moves will be critical for both its profits and its environmental impact.