Shell has announced record annual profits of £28.7 billion for 2023, more than double the previous year’s earnings. The oil and gas giant attributes the surge to high energy prices and strong demand. But critics argue the windfall comes at a time when households struggle with their energy bills.

The company’s chief executive, Wael Sawan, defended the results, saying they reflect disciplined execution. “Our strategy is working,” he said. “We are providing the energy the world needs while advancing our transition to net zero.”

But the figures have ignited a political firestorm. Labour’s shadow climate secretary, Ed Miliband, called the profits “obscene.” He urged the government to impose a tougher windfall tax. “Working families are paying the price while Shell rakes in billions,” he said.

The government has resisted calls for a windfall tax, preferring a levy on North Sea oil and gas profits. But that levy is set to rise to 35% in 2024, from 25% currently. Shell says it has already paid £2.4 billion in UK taxes this year.

Despite the controversy, Shell has announced plans to invest £20 billion in UK energy infrastructure over the next decade. The investment will focus on offshore wind, hydrogen, and carbon capture projects. Sawan said the UK’s energy security and net zero goals depend on such investment.

The North Sea Transition Authority welcomed the announcement. Its chief executive, Stuart Payne, said Shell’s commitment was vital. “We need both oil and gas for now and clean energy for the future,” he said.

But environmental groups remain sceptical. Greenpeace UK’s chief scientist, Dr. Doug Parr, said Shell was “double-counting” emissions. He claims the company is still expanding oil and gas production. “This is not a transition; it’s a cynical rebrand,” he said.

Shell’s profits come as the world grapples with climate change. The UN’s climate body, the IPCC, has warned that emissions must fall rapidly. Yet Shell’s own emissions rose by 1.5% in 2023. The company says this is temporary due to increased production to meet demand.

Investors appear split. Some see the profits as a sign of strength. Others worry about long-term risks. A group of institutional investors managing £3 trillion in assets recently urged Shell to set harder emissions targets. Shell says it is on track to halve emissions by 2030.

The UK investment plan includes a £3 billion hydrogen hub in Scotland, a wind farm off the coast of Yorkshire, and a carbon capture project in the North Sea. Shell claims these could create 10,000 jobs. Unions have cautiously welcomed the move. Unite’s general secretary, Sharon Graham, said workers needed guarantees on jobs and skills.

But the broader picture remains fraught. Oil prices are volatile. Global demand for fossil fuels is expected to peak by 2030, according to the International Energy Agency. Shell’s strategy bets on natural gas as a bridge fuel. Critics say that bridge is too long.

Sawan remains bullish. “We are investing in the energy system of the future,” he said. “The UK has the talent and the resources to lead.”

For now, the profits keep flowing. Whether Shell’s UK investment will offset its environmental impact is another question entirely. The company faces a shareholder rebellion at its next AGM over its climate plans. The battle lines are drawn.