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Shell Forced to Cut Emissions by 45% In Historic Climate Decision

This verdict could have far-reaching consequences for the fossil fuel industry globally.

Shell Forced to Cut Emissions by 45% In Historic Climate Decision
Royal Dutch Shell's arctic oil drilling rig in Seattle urbanglimpses/iStock

In a historic climate decision, a Dutch court has ordered Royal Dutch Shell, one of the world's largest producers and suppliers of fossil fuels, to decrease the carbon emissions of the Shell Group, its suppliers, and its customers by net 45 percent by 2030, as compared to 2019 levels, according to a The Hague Dutch Court ruling.  

The 2030 goal is more ambitious than Shell's target, which is based on intensity —the amount of carbon in any unit of energy. While Shell aspired to become "a net-zero emissions energy business by 2050," this intensity-based strategy could see overall emissions still rise, so the court ruled that the plans were not insufficient. 

How Royal Dutch Shell should achieve the ordered cutback wasn't defined, with the court stating that it "has complete freedom in how it meets its reduction obligation and in shaping the Shell group’s corporate policy."

Shell is, understandably, not thrilled with the immediately enforceable ruling. "We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables, and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly. We will continue to focus on these efforts and fully expect to appeal today's disappointing court decision," a Shell spokesperson said in a statement. 

'The first time a judge has ordered a large polluting corporation to comply with the Paris Climate Agreement'

This a first-of-its-kind ruling that puts more pressure on oil companies that are already under scrutiny from governments and investors and it could set a precedent for similar lawsuits.

"This case is unique because it is the first time a judge has ordered a large polluting corporation to comply with the Paris Climate Agreement. This ruling may also have major consequences for other big polluters," said Roger Cox, the lawyer for Friends of the Earth Netherlands.

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The case was filed by a group of seven environmental and human rights organizations, including Greenpeace and Friends of the Earth Netherlands, and about 1,700 Dutch citizens in 2018. The environmental groups argued Shell was violating its international climate obligations. For example, Shell plans to plant trees to offset emissions, rather than scaling down fossil fuel production, groups accused. 

The judge ruled that Shell's current climate strategy is "not concrete enough and full of caveats and is based on monitoring social developments rather than the company’s own responsibility for achieving a CO2 reduction," adding that the company has a legal obligation to cut its emissions in line with international climate goals.

Climate activists have long accused oil and gas industries of contributing to global warming, while companies argued they have a responsibility to provide the world with the oil and natural gas it needs. There is mounting evidence that we need must limit global warming to less than below 35 degrees Fahrenheit (2 degrees Celsius) above pre-industrial levels, as mandated by the Paris climate agreements.

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As the world turns toward greener sources of energy, it appears that the string of legal challenges that follow oil companies will only grow in number, with the Hague case setting a great example.

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