Shell wins appeal against landmark Dutch climate ruling
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The original ruling had ordered Shell to cut its absolute carbon emissions by 45 per cent by 2030 compared to 2019 levels.
PHOTO: REUTERS
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AMSTERDAM - Oil and gas major Shell on Nov 12 won an appeal against a landmark ruling that required it to accelerate carbon reduction efforts, dealing a blow to campaigners who have turned to legal channels to pursue climate action.
The appeals court in The Hague said Shell had a responsibility to reduce greenhouse gas emissions to protect people from global warming.
But it dismissed the 2021 ruling that ordered Shell to cut its absolute carbon emissions by 45 per cent by 2030 compared with levels in 2019, including those caused by the use of its products.
Since then, Russia’s invasion of Ukraine in 2022,
The ruling coincides with the COP29 UN climate summit in Baku, Azerbaijan,
Friends of the Earth Netherlands, which brought the Dutch case in 2019, said it would continue its fight against large polluters, but did not say whether it would launch a further appeal at the Netherlands’ Supreme Court.
“This hurts,” director Donald Pols said. “At the same time, this case has shown that large polluters are not above the law.”
Shell chief executive Wael Sawan said Shell believed the decision was “the right one for the global energy transition, the Netherlands and our company”.
Climate mitigation
The case in The Hague, where Shell was headquartered until it completed its move to London in 2022, was viewed as pivotal for both sides of the emissions divide and helped to inspire other lawsuits.
In appeal hearings earlier in 2024, Shell said demands for companies to reduce emissions could not be made by courts, but only by states.
The court agreed with Shell that an absolute order to reduce emissions from its products could have an adverse effect worldwide, as it could lead customers to switch from using Shell’s gas to more polluting coal.
“In general, any reduction in greenhouse gas emissions is positive to mitigate climate change,” Presiding Judge Carla Joustra said.
“But that does not mean that a reduction order for Shell has that same effect.”
Shell said it was well on track to meet the court order for its own production, where emissions were 30 per cent below 2016 levels last year.
In common with some of its peers, it scaled back its renewable operations, which can take longer to generate profits compared with oil and gas.
However, it plans to invest US$10 billion (S$13.4 billion) to US$15 billion between 2023 and 2025 in low-carbon energy.
In March, it weakened targets for the products it sells, to a 15 per cent to 20 per cent reduction in net carbon intensity by 2030 relative to 2016, while it retired a previous target to reduce its carbon intensity by 45 per cent by 2035.
Citi analysts said the ruling on Nov 12 was the best case outcome for Shell. “While success with the appeals court may not be the end of the legal process, by signalling that company strategy is now more firmly in the hands of shareholders, we believe it has a positive impact,” Citi said.
Shell shares traded down 0.3 per cent broadly in line with the wider sector. REUTERS
