Shell Energy China was one of the first Shell subsidiaries actively participating in the country’s power trading markets. Credit: T. Schneider/Shutterstock.com.

British oil and gas company Shell has withdrawn from China’s power market, including power generation, trading and marketing, effective from the end of 2023.

The company stated: “We are selectively investing in power, focusing on delivering value from our power portfolio, which requires making difficult choices.

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“We will work with our partners and customers to contribute to China’s energy transition.”

The move is part of the company’s strategy to prioritise more profitable ventures, particularly in the natural gas and oil sectors.

Shell Energy China was one of the first Shell subsidiaries to actively participate in China’s carbon emissions and power trading markets.

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Despite its exit, Shell’s electric vehicle (EV) charging business in the country remains operational and is identified as a significant growth area, according to Reuters.

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The company’s broader cost-saving measures include divesting from the European retail power sector, offshore wind and low-carbon initiatives.

It is also considering the sale of its US solar assets and reviewing its large refining and petrochemical complex in Singapore.

Shell has implemented company-wide staff reductions, including in its low-carbon solutions division, as it seeks to save $3bn (£2.4bn) annually.

The company is intensifying its focus on natural gas, anticipating increased demand in the 2020s, 2030s and beyond. Shell’s strategy shift also involves exiting retail power markets to reinforce its oil and gas business.

In March 2024, Shell reiterated its commitment to achieving net-zero emissions by 2050, albeit with a relaxed carbon intensity goal for 2030.

In September 2023, Shell agreed to sell its UK and German retail home energy businesses to the Octopus Energy Group, with plans to partner internationally in EV charging. The deal was completed in December.