Shell overturns Dutch court order to reduce emissions faster

(Bloomberg) — Shell won an appeal in a Dutch court overturning a landmark 2021 ruling that ordered the company to reduce its rates faster than originally planned, in a significant setback for groups seeking climate justice through the courts.

Shell has a duty to reduce its emissions, but it is already doing so and there is no way to determine precisely what percentage reduction should be applied to oil and gas companies, judges said in a ruling in The Hague on Tuesday (12).

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A lower court previously ruled that Shell must reduce emissions by 45% by 2030 from 2019 levels, in a case brought by local environmental group Milieudefensie. The oil and gas producer, however, in its appeal that the court-mandated emissions targets have no legal basis and would be an ineffective and counterproductive way of achieving its 2050 net zero target.

The court supported this position. “It is not possible to determine what percentage Shell should adhere to,” the judges said in their verdict. “Some sectors are more difficult to make sustainable than others.”

The case can be appealed to the Dutch Supreme Court.

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The decision comes as world leaders descend on Baku, Azerbaijan, for the United Nations COP29 climate summit, at a crucial time for the global fight against climate change. Carbon dioxide emissions hit a record last year and countries are running out of time to prevent global warming from reaching catastrophic levels. Donald Trump’s re-election also threatens 2030 green goals, as he has pledged to undo many US climate policies and withdraw from global cooperation.

The Dutch court case could serve as a bellwether, with potential ripple effects on future decisions across the region. Last year, a dozen Italian citizens, along with Greenpeace Italy and ReCommon, filed a lawsuit against Eni SpA, claiming damages for the company’s contribution to climate change and demanding faster emissions cuts.

In 2021, the Dutch court ordered Shell to reduce three types of carbon emissions. Scope 1, which comes directly from their own operations, scope 2, which comes from the energy they use, and scope 3, from their supply chain and customers. The vast majority of Shell’s emissions, around 90%, fall into the third category. The court imposed a “significant best efforts” obligation for scopes 2 and 3.

This Tuesday, the high court rejected the execution of the reduction for all three scopes.

“This hurts,” said Donald Pols, director of Milieudefensie, after the verdict. “It could have been a very important step, but the battle is not yet resolved.”

Pols said there were some “positive points” in the ruling, such as the fact that the court said Shell has an individual responsibility to reduce its emissions and that exploring new oil and gas fields is at odds with the US climate agreement. Paris.

“The Court has unequivocally emphasized that protection against climate change is a human right and that not only states but also companies like Shell have an obligation to protect human rights,” Pols said.

The organization will decide whether to appeal or initiate a new case based on the implications of the decision, Pols said.

Legal challenges to fossil fuel projects over climate concerns will continue, with Shell among several companies facing an attempt to revoke their licenses to develop oil and gas fields in the UK North Sea at the Court of Session in Edinburgh on Tuesday .

The Dutch case will likely take years to resolve definitively given the avenues of appeal, Shell CEO Wael Sawan told analysts last month. The company argued that it is up to the government to take action against climate change, not the courts.

“Our goal to become a net-zero emissions energy business by 2050 remains at the heart of Shell’s strategy and is transforming our business,” Sawan said following the decision. “A court ruling would not reduce overall customer demand for products like gasoline and diesel for cars, or for gas for heating and power for homes and businesses.”