Dutch court backs Shell in emissions reduction case

Anglo-Dutch oil giant Shell, one of the largest corporate emitters of fossil fuels has won an appeal against a landmark ruling which forced it to reduce its emissions, a decision which has been described as a “setback” by climate campaigners.

The Dutch court of appeal in The Hague has today overturned a 2021 district court ruling which had forced the oil giant to cut its carbon emissions by 45% by 2030 against a 2029 benchmark. The case was put forward by Dutch environmental campaign group Milieudefensie alongside 17,000 co-plaintiffs. It was the first emissions disclosure rule against any major emitter globally.

In its appeal Shell had argued that emissions reduction targets were a matter for politicians to decide rather than courts and that fossil fuel extraction was based on consumer demand, so if it chose not to extract fossil fuels, other firms would pick up the opportunity.

“We are pleased with the court’s decision, which we believe is the right one for the global energy transition, the Netherlands and our company,” said Shell’s CEO Wael Sawan.

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Facing the appeal, Milieudefensie has pointed out that Shell had failed to comply with the 2021 court ruling by planning to develop hundreds of new oil and gas fields. Among others, Shell has been among the bidders for the Rosebank development in the North Sea.

"We are shocked by today’s judgment. It is a setback for us, for the climate movement and for millions of people around the world who worry about their future” said Donald Pols, director of Milieudefensie. But he also added that the group was not caving in: “If there’s one thing to know about us, it’s that we don’t give up. This setback will only help us grow stronger. Large polluters are powerful. But united, we as people have the power to change them” he stressed.

The court had agreed with the claim that imposing emissions reductions obligations on specific companies would have an effect on limiting global emissions. However, it also acknowledged that Shell had an obligation to protect Human Rights and that its decision to expand fossil fuel exploration was at odds with its emissions reduction strategy.

While the decision marks a setback for climate campaigners, Shell could soon face further challenges, among others due to the introduction of Europe's Corporate Sustainability Due Diligence Directive which requires companies to align their business model with the Paris Agreement. 

Earlier this year, a UK court had ruled that companies must consider Scope 3 emissions in planning applications for new oil and gas projects. 

Shell ranks as one of the ten largest corporate emitters of greenhouse gas emissions between 1965 and 2020, according to research by Climate Accountability.