In Landmark Ruling, Multinational Oil Firm Shell Ordered To Reduce Emissions By 45% By 2030

In a landmark ruling, global oil and gas giant Royal Dutch Shell (RDS) was ordered to reduce its emissions by 45% by 2030 compared to its 2019 levels to mitigate its effects towards climate change and to bring the company in alignment with the goals listed in the Paris Agreement which aim to curb global heating of the planet.

According to Carbon Majors, Anglo-Dutch multinational Shell was the ninth biggest polluter in the world between 1988 to 2015. All this while, the firm had a target to limit the “carbon intensity” by at least 6% by 2023, by 20% by 2030, by 45% by 2035 and by 100% by 2050 from 2016 levels. Carbon intensity is a term that reflects the total amount of GHGs emitted per unit of energy sold, which was letting the firm offset its emissions instead of direct emission cuts meaning it can continue to dump fossil fuels in the environment despite offsetting along the way.

To counter this and hold the company responsible for its disastrous impact on the environment, a case known as the “People versus Shell”, was filed in 2019 by the Netherlands branch of the Environmental organization Friends of the Earth and they were further supported by six environmental and human rights organisations along with 17,000 Dutch citizens seeking action against RDS on the grounds that it violated human rights and its legal duty of care.

When judge Larisa Alwin was briefed about the oil major’s current target, she said: “It is not concrete, has many caveats and is based on monitoring social developments rather than the company’s own responsibility for achieving a CO2 reduction.”

As a result, the District Court of the Hague ordered “Royal Dutch Shell to reduce its CO2 output and those of its suppliers and buyers by the end of 2030 by a net of 45% based on 2019 levels. Royal Dutch Shell has to implement this decision at once,” and gave the firm “complete freedom” on how it wants to go about meeting its new reduction target.

This new ruling is a massive win for environmentalist, for people all over the world and most importantly for the planet, and it will have enormous implications for the fossil fuel industry as a whole and for future climate litigations.

Royal Dutch Shell to reduce its CO2 output and those of its suppliers and buyers by the end of 2030 by a net of 45% based on 2019 levels. Royal Dutch Shell has to implement this decision at once

District Court of the Hague

Director of Friends of the Earth Netherlands, Donald Pols, called this ruling a “monumental victory”. “For the first time in history a judge has ruled that a major polluter must stop causing dangerous climate change. The judge has left no room for doubt: Shell is causing dangerous climate change and must stop its destructive behaviour now. Shell is the first but will not be the last company that will be forced to stop dangerous climate change. As of today climate lawsuits are a material risk for all major polluters in the world.”

This news comes after increasing pressure from investors, activists and governments on energy firms to ditch fossil fuels and instead invest in renewables.

Speaking about the ruling, Shell was far from pleased, saying it “fully expects to appeal today’s disappointing court decision”. “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.”

Shell board member, Harry Brekelmans, further mentioned that they are working hard to become a net zero company by 2050.

This news comes after Shell’s chief executive Ben van Beurden rejected the idea of absolute reduction targets at the firm’s annual general meeting this month. “Reducing absolute emissions at this point in time is predominantly possible by shrinking the business.”

For the first time in history a judge has ruled that a major polluter must stop causing dangerous climate change. Shell is the first but will not be the last company that will be forced to stop dangerous climate change. As of today climate lawsuits are a material risk for all major polluters in the world

Donald Pols, director of Friends of the Earth Netherlands

Dispute resolution partner at law firm Ashurst, Tom Cummins said of the landmark judgement: “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.”

Earlier this year, another Dutch court called out Shell for the damage it caused through its oil leaks in the Niger Delta in Nigeria that took place more than a decade ago, ordering the firm to pay compensation to farmers. However, Shell said that the leaks were due to “sabotage”.

Elsewhere, U.S. energy giants Exxon and Chevron are making headlines for the former replacing board members with candidates that actually care about climate change and the latter’s shareholders voting to slash emission from the fuels they produce.

One of the world’s first landmark climate cases took place in the Netherlands previously, when the Supreme Court supported a 2015 ruling that asked the government to cut its emissions by at least 25% by the end of 2020 from 1990 levels.

The oil & gas industry has faced numerous business, media and activists challenges in the past few months. Despite Warren Buffet defending oil & gas investments and telling his shareholders that Chevron is not an evil company and 62 energy companies agreeing to a new emissions reporting framework, the International Energy Agency (IEA) announced that if we are to meet our net-zero commitments by 2050, no new oil, gas or coal development can happen, putting the industry at risk, and a recent investigation showed that the industry knew about the health damage of fossil fuel burning for at least fifty years. Further a more outspoken younger generation is being increasingly vocal about the damage the industry has done: last July, a group of students at Nanyang Technological University in Singapore set up a student group to pressure the university to divest from fossil fuels, and that same month, in another landmark case a law student sued the Australian government for misleading investors over climate risk and just yesterday, an Australian court found that the government must protect young people from the current climate crisis.

Lead image courtesy of Unsplash.