Posted on May 26, 2021
A Dutch court on Wednesday ordered Royal Dutch Shell to significantly deepen planned greenhouse gas emission cuts, in a landmark ruling that could pave the way for legal action against energy companies around the world, Reuters reports.
Shell immediately said it would appeal the court ruling, which comes amid rising pressure from investors, activists and governments on energy companies to shift away from fossil fuels and rapidly ramp up investments in renewable energy.
At a court room in The Hague, Judge Larisa Alwin read out a ruling which ordered Shell to reduce its planet warming carbon emissions by 45% by 2030 from 2019 levels.
"The court orders Royal Dutch Shell, by means of its corporate policy, to reduce its CO2 emissions by 45% by 2030 with respect to the level of 2019 for the Shell group and the suppliers and customers of the group," Alwin said.
Earlier this year Shell set out one of the sector's most ambitious climate strategies. It has a target to cut the carbon intensity of its products by at least 6% by 2023, by 20% by 2030, by 45% by 2035 and by 100% by 2050 from 2016 levels.
But the court said that Shell's climate policy was "not concrete and is full of conditions...that's not enough.
"The conclusion of the court is therefore that Shell is in danger of violating its obligation to reduce. And the court will therefore issue an order upon RDS," the judge said.
The court ordered Shell to reduce its absolute levels of carbon emissions, while Shell's intensity-based targets could allow the company to grow its output in theory.
"This is arguably the most significant climate change related judgment yet, which emphasises that companies and not just governments may be the target of strategic litigation which seeks to drive changes in behaviour," said Tom Cummins, dispute resolution partner at law firm Ashurst.
Shell said that it would appeal the verdict and that it has set out its plan to become a net-zero emissions energy company by 2050.
Shares in its London-traded stock were down 0.7% at 1427 GMT, compared with 0.8% gains in the broader European energy sector
The lawsuit, which was filed by seven groups including Greenpeace and Friends of the Earth Netherlands, marks a first in which environmentalists have turned to the courts to try to force a major energy firm to change strategy.
"This is a huge win, for us and for anyone affected by climate change", Friends of the Earth Netherlands director Donald Pols told Reuters.
"It is historic, it is the first time a court has decided that a major polluter has to cut its emissions," Pols added.
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