Governments should take the opportunity to put a price on carbon said the boss of one of the world’s biggest energy companies.

Shell’s CEO Ben van Beurden believes that by taking the costs of tackling climate change and air pollution into account, carbon pricing systems will drive the “right behaviour of consumers and producers”.

Renewables could replace fossil fuels “only step by step” and it will not happen “across the broad”, said Mr van Beurden in a conference earlier today.

Some sectors such as heavy industry, heavy duty transport and chemicals need carbon. Biomass is not enough to meet their demand, so they will continue need hydrocarbons, according to Shell’s CEO.

He said: “Technologies like carbon capture and storage (CCS) are required to clean up the use of fossil fuels. Unfortunately, however, we can no longer wait for CCS technologies to mature slowly. The world needs to start applying them widely and without delay.

“Effective carbon pricing-systems would boost technologies like CCS, although more is needed to make CCS a success.”

In the short term, carbon pricing is an efficient way to reduce emissions but energy costs would increase, said Mr van Beurden. That’s why he believes policy makers have an important role to play.

He added: “They need to design carbon pricing systems that address concerns about cost and competitiveness. This isn’t impossible.”