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    Court Rules Shell Needs to Reduce Emissions

    Stockholm (NordSIP) – In a groundbreaking decision on May 26, 2021, the District Court in The Hague ruled against Royal Dutch Shell in the climate change case filed by environmental NGO Milieudefensie, and co-plaintifs. According to the court, Shell has to reduce its global CO2 emissions by 45% from 2019 levels by 2030.

    The Case

    According to Milieudefensie, “Shell is the largest polluter in the Netherlands. The company emits nine times as much CO2 as the entire Netherlands put together. Shell has known since the 1960s that oil and gas consumption is disastrous for the climate. But, despite this knowledge, the company has done nothing. In fact, Shell has been paying millions per year to lobby groups that deny the climate crisis.”

    Miliedefensie’s original letter to Shell warning of the impending law suit noted that this knowledge meant that the Dutch oil company had breached its obligations to the public. “Dutch law places Shell under a legal obligation to respect human rights and to act responsibly, in accordance with the applicable due diligence standard enshrined in Dutch law,” the letter argued. “If Shell breaches these obligations, the company is guilty of unlawful conduct vis-á-vis parties (at risk of) suffering harm as a consequence. This may result in a liability to pay out compensation, but also in a court order requiring the company to cease the wrongful actions, in order to avoid or limit harm as much as possible.”

    This is the first ruling of its kind involving a private company. It follows the 2019 Urgenda Foudantion ruling which had found the Dutch state to be endangering Dutch citizens by failing to meet minimum CO2 emission goals to mitigate climate change. These two decisions should also be considered in light of the recent decision by the German Constitutional Court which demanded the government make its climate change plans less vague.

    The Ruling

    According to the ruling, there is a threat of human rights violations to the “right to life” and “undisturbed family life”. Moreover, the court also argued that Shell is responsible for the scope 3 emissions of its customers and suppliers. Recognising Shell’s carbon footprint and noting the vague nature of its sustainability policy the court ordered the company to almost halve its emissions vis-à-vis 2019 levels.

    Reacting to the court’s ruling, Harry Brekelmans, Projects & Technology Director at Shell noted the company’s disappointment and announced Shell will appeal the decision. However, the court order is provisionally enforceable, which in the Netherlands means is has immediate effect, regardless of whether the court’s decision is appealed.

    Reactions

    “Urgent action is needed on climate change which is why we have accelerated our efforts to become a net-zero emissions energy company by 2050, in step with society, with short-term targets to track our progress,” Brekelmans says. “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,” he added.

    “This is a monumental victory for our planet, for our children and is a stop towards a liveable future for everyone.The judge has left no room for doubt: Shell is causing dangerous climate change and must stop its destructive behaviour now,” says Donald Pols, director of Milieudefensie

    “This is a turning point in history. This case is unique because it is the first time a judge has ordered a large polluting company to comply with the Paris Climate Agreement. This ruling may also have major consequences for other big polluters,” Roger Cox, lawyer for Milieudefensie concluded

    Image Courtesy of Shell

    Filipe Albuquerque
    Filipe is an economist with 8 years of experience in macroeconomic and financial analysis for the Economist Intelligence Unit, the UN World Institute for Development Economic Research, the Stockholm School of Economics and the School of Oriental and African Studies. Filipe holds a MSc in European Political Economy from the LSE and a MSc in Economics from the University of London, where he currently is a PhD candidate.

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