In a landmark ruling that could pave the way for legal action against other energy companies, a Dutch court on Wednesday (26 May) has ordered Royal Dutch Shell to significantly deepen planned greenhouse gas emission cuts.
Shell immediately said it would appeal the court ruling.
Although the case is being heard in The Hague, home to the International Court of Justice and International Criminal Court, it has been held under Dutch law at a local court of first instance.
However, although the verdict is only legally binding in the Netherlands, it is being closely watched as a new litigious emerging risk and may guide deliberations by judges elsewhere.
Shell had been sued by Milieudefensie, the Dutch arm of Friends of the Earth, whose lawyers spent two weeks in court earlier this year arguing that the company is violating human rights by extracting fossil fuels and undermining the Paris Agreement’s aim of limiting temperature increases to less than 1.5 degrees Celsius.
The oil giant’s sustainability policy was found to be insufficiently “concrete” by the Dutch court in an unprecedented ruling that will have wide implications for the energy industry and other polluting multinationals.
The Anglo-Dutch company was told it had a duty of care and that the level of emission reductions of Shell and its suppliers and buyers should be brought into line with the Paris climate agreement.
At a court room in The Hague, judge Larisa Alwin read out a ruling which ordered Shell to reduce its planet warming carbon emissions by 45% by 2030 from 2019 levels:
“The court orders Royal Dutch Shell, by means of its corporate policy, to reduce its CO2 emissions by 45% by 2030 with respect to the level of 2019 for the Shell group and the suppliers and customers of the group,” Alwin said.
Earlier this year Shell set out one of the sector’s most ambitious climate strategies. It has a target to cut the carbon intensity of its products by at least 6% by 2023, by 20% by 2030, by 45% by 2035 and by 100% by 2050 from 2016 levels.
However, the court said that Shell’s climate policy was “not concrete and is full of conditions…that’s not enough.”
“The conclusion of the court is therefore that Shell is in danger of violating its obligation to reduce. And the court will therefore issue an order upon RDS,” the judge said.
It was claimed that Shell was breaching article 6:162 of the Dutch civil code and violating articles 2 and 8 of the European convention on human rights – the right to life and the right to family life – by causing a danger to others when alternative measures could be taken.
The court ruled that there were indeed obligations under both Dutch law and the convention and that the company had known for “a long time” about the damage of carbon emissions.
While the company had not acted unlawfully, the court said it had established that there would be an “imminent violation of the reduction obligation”.
It added that company’s “policy intentions and ambitions for the Shell group largely amount to rather intangible, undefined and non-binding plans for the long-term”.
It found they were “dependent on the pace at which global society moves towards the climate goals of the Paris agreement”, allowing it to move more slowly, and that the “emissions reduction targets for 2030 are lacking completely”.
Shell had argued that there was no legal basis for the case and that governments alone are responsible for meeting Paris targets. However, the court found that “since 2012 there has been broad international consensus about the need for non-state action, because states cannot tackle the climate issue on their own”.