Unveiling one of the most ambitious emissions reduction plans across the sector, Royal Dutch Shell PLC is stepping up efforts to address climate change, outlining April 16 that it intends to become a carbon-neutral energy business by 2050 despite the economic fallout caused by the oil price collapse and the coronavirus pandemic.

Shell CEO Ben van Beurden said on a conference call that the oil price crisis will not derail the company's climate goals as it undergoes a "complete overhaul" in the next 30 years.

The Anglo-Dutch major plans to reduce the net carbon footprint of its own energy products, known as scope 3 emissions, by approximately 30% by 2035 and 65% by 2050. Previously, Shell set intensity-based reduction targets of 20% by 2035, and 50% by 2050 that included scope 1 and scope 2 emissions. Scope 1 emissions come directly from a company's operations, while scope 2 emissions are those from the electricity a company purchases and uses.

"This makes Shell the second supermajor after BP PLC to jump on the net-zero band-wagon," Raymond James analyst Muhammed Ghulam said. "Given the continued focus on [environmental, social and governance standards] by investors, we wouldn't be surprised to see other companies announce similar plans in the coming months and years."

Analysts had feared that recently announced spending cuts could delay the majors' efforts to transition to cleaner energy.

"Even at a time of immediate challenge, it is important to also keep an eye on the long term as well ... abandoning that focus in the face of urgent short-term need will make long-term challenges all the harder to tackle when COVID-19 is no longer with us," van Beurden said.

In March 2019, Shell set short-term emissions targets for the first time, outlining a three-year reduction level of 2% to 3% through 2021, from 2016, that included scope 1, 2 and 3 emissions.

"The fact that Shell announced [this] move now underlines its commitment to make the shift from big oil to big energy. Coronavirus and its fallout don't change that. If anything, it adds greater weight to the argument," Wood Mackenzie Vice President of Corporate Analysis Luke Parker said in an April 16 statement. "Despite immediate cash flow constraints, Shell (and its peers) will emerge from this period more determined to make the shift."

READ MORE: Sign up for our weekly coronavirus newsletter here, and read our latest coverage on the crisis here.

Shell's latest climate ambitions are not reflected in the company's operating plans and budgets, it said April 16.

In 2019, Shell spent $1 billion to $2 billion of its $24 billion capital expenditures on clean energies, working to decarbonize and electrify its business, gradually pushing into biofuels and energy storage as well as the solar and wind markets. Shell executives said previously the company would continue to spend as much as $2 billion on new energies through this year, raising capex for electrification to $2 billion to $3 billion per year by 2025.

But with oil prices falling to multiyear lows amid demand destruction caused by COVID-19, the majors, including Shell, have been forced to slash capex this year to preserve cash and protect their balance sheets. Shell announced March 23 it will cut 2020 spending to $20 billion if not lower, from an initial level of around $25 billion, and will trim operating costs by $3 billion to $4 billion.

"Shell's aim is that in the future, its operating plans and budgets will change to reflect this movement towards its new net-zero emissions ambition," the company said.

In general, the upstream sector has provided the highest returns for oil and gas companies and their shareholders, and that is where the majors have been heavily invested. But these companies have faced increasing pressure over the last few years to align their business models more closely with the Paris Agreement on climate change.

Mark van Baal, founder of Dutch activist investor group Follow This, called Shell's latest climate ambitions "inadequate."

"Shell's board is still failing in its responsibility to show leadership at a time of devastating climate change," van Baal said in an April 16 statement.

Shell also said April 16 that it is advising shareholders to vote against a climate resolution filed by Follow This, calling for Shell to set more stringent climate goals. The company's annual general meeting will be held on May 19.

Competitor Total SA is on the same page as Shell, as it too plows ahead with its own plans to transition into a broader energy company. Total Chairman, CEO and President Patrick Pouyanné said the difficult oil market environment has only strengthened the France-based company's resolve that it must evolve by embracing low-carbon electricity and carbon neutrality solutions.