Dutch court sets landmark ruling forcing Shell to slash emissions

26 May 2021

London, (Quantum Commodity Intelligence) - A district court in the Netherlands sent shockwaves around the oil industry on Wednesday after it ruled oil major Royal Dutch Shell must cut sharply its emissions of carbon dioxide to help combat global warming.

In a case led by the Dutch wing of environmental group Friends of the Earth and Greenpeace and backed by more than 15,000 other plaintiffs, the court ruled that energy giant Shell has to cut its carbon emissions 45% below 2019 levels by the end of the decade.

The ruling contrasts with Shell’s pledge to cut the carbon intensity of the products it sells by 6% by 2023, 20% by 2030 and 45% by 2035 – a target that essentially would allow it to sell goods that emit more carbon dioxide providing the overall emissions per unit falls.

"The court orders Royal Dutch Shell, by means of its corporate policy, to reduce its CO2 emissions by 45% by 2030 with respect to 2019 for the Shell group and its suppliers and customers," Judge Larisa Alwin said.

A Shell spokesperson told reporters immediately after the court case it would appeal the ruling.

The company's share price dipped just shy of 1% after the ruling, but was marginally higher by time of press on firmer oil prices.

In comparison the FTSE 100 index of leading shares in the UK was flat.

A first

“It is the first time that a major fossil fuel company is held accountable for its contribution to climate change and ordered to reduce its carbon emissions throughout its whole supply chain,” Greenpeace Netherlands said in a statement after the ruling.

The big concern for other majors will be whether the ruling, which essentially places a legal obligation on oil majors to take the lead in cutting emissions of greenhouse gases that are blamed for warming the planet.

The key part of the ruling is tying future investments in fossil fuel developments to human rights and the fact the judge said it places an obligation on Shell to do more than merely comply with regulations to cut emissions in the country it operates.

Last week the International Energy Agency said that in order for the world to become net-zero of carbon emissions by the middle of the decade, there must be no more new investments in fossil fuels after this year.

On Wednesday, Exxon’s and Chevron’s will face key votes on the companies’ plans  to cut emissions.

Last week, John Kerry, the US special envoy for climate, said in an interview with the BBC that half of the technology that was needed to meet the net-zero goal had still to be developed – a claim that has since been contested by environmental groups.