Shell expects to face £1bn bill over emissions certificates for a single quarter

Shell said it expects to take a 1.3 billion US dollar (£1.04 billion) cash hit in the final quarter from payments for emissions certificates.

The energy major said on Wednesday that the charge is “related to timing of payments of emissions certificates” in Germany and the US.

Shell is the second-biggest company in the FTSE 100, by market capitalisation, and last year chief executive Wael Sawan suggested the company would look at “all options” to raising its share price, including potentially moving its listing to New York. After a huge exodus of companies of late, that would be the biggest blow yet to the London Stock Exchange.

The company also said it expects profits in its gas business to be “significantly lower” in the fourth quarter than the previous three months, because of hedging contracts expiring.

Shell took a swathe of hedging contracts in 2022 to protect itself against a potential drop-off in Russian production after the invasion of Ukraine.

Liquefied natural gas (LNG) production also dropped during the period. The amount of LNG it expected to have produced fell to between 6.8 and 7.2 million tonnes, down from 7.5 million tonnes in the third quarter, it said in a trading statement.

The company said this was because of “lower feedgas” – the amount of raw gas used in the process – and fewer cargos carrying the product than in the previous period.

Shell is the world’s largest trader of LNG, the product which makes up a significant part of many countries’ energy supplies.

Meanwhile, the company said margins in its oil refining business remained at about 5.5 dollars (£4.41) a barrel, after they fell sharply last year.

Oil refining businesses such as Shell’s suffered a downturn in global demand last year across both consumer and industrial sectors.

The growing prevalence of electric cars, combined with economic slowdowns in major economies including China, contributed to the drop.