Dutch Court Rules Shell Must Reduce Emissions 45% By 2030

The District Court of The Hague in the Netherlands on Wednesday ordered Royal Dutch Shell (NYSE: RDS-A) to reduce its carbon dioxide emissions by a net 45% compared to 2019 levels by the end of 2030.

Friends of the Earth Netherlands (Milieudefensie), six other organizations and more than 17,000 co-plaintiffs, who issued a document to Friends of the Earth Netherlands appointing it as their representative, filed a lawsuit against Shell alleging human rights violations caused by CO2 emissions-inducing climate change. 

Friends of the Earth Netherlands said in a release that this is "the first time in history a judge has held a corporation liable for causing dangerous climate change." The organization's lawyer, Roger Cox, said, "This is a turning point in history" because a judge has never before ordered a large polluting company to comply with the Paris Agreement. 

Sara Shaw of Friends of the Earth International said in a statement, "This is a landmark victory for climate justice. Our hope is that this verdict will trigger a wave of climate litigation against big polluters, to force them to stop extracting and burning fossil fuels. This result is a win for communities in the global South who face devastating climate impacts now." 

Royal Dutch Shell argued that it should not be liable for the scope 1 and scope 2 emissions of other Shell companies, nor for any Shell companies' scope 3 emissions. Shell also argued that the "necessary causality is lacking." The third argument Shell posed was that if Shell reduced emissions, other parties would take Shell's place and emit more CO2, leading to no overall reduction in emissions.

A spokeswoman for the court, Jeannette Honée, explained the verdict in a video released by the District Court of The Hague, saying that Shell contributes significantly to climate change and should be responsible for reducing its emissions. Honée said that climate change has consequences for human rights and the right to life and "the court finds that the consequences for severe climate change are more important than Shell's interests."

In addition to reducing scope 1 and 2 emissions, the court ruled that Shell is responsible for scope 3 emissions, including the emissions of suppliers and customers. Shell's 2020 Annual Report said the company's scope 1 emissions were 63 million tons of CO2 equivalent (CO2e) and scope 2 emissions were 9 million tons of CO2e. Shell's scope 3 emissions in 2020 were the equivalent of burning 1.44 trillion pounds of coal, adding up to more than 1.3 billion tons of CO2e.

That means Shell's scope 3 emissions made up nearly 95% of its total emissions in 2020, so Honée's inclusion of scope 3 emissions in the net 45% emission reduction by the end of 2030 ruling is a major victory for the plaintiffs.

"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," Harry Brekelmans, projects and technology director at Shell, said in a response to the court ruling. "We will continue to focus on these efforts and fully expect to appeal today's disappointing court decision."

Shell released a decarbonization report at the beginning of 2021 and has committed to net-zero emissions by 2050. However, because CO2 remains in the atmosphere for hundreds of years after it's emitted, many activists are stressing the importance of acting fast to reduce emissions.

"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 said.

The Grounds For The Case 

The major impacts of climate change claimed in the court case include the threats it poses to unique ecological and cultural systems; the increased frequency and severity of extreme weather events such as droughts, fires and hurricanes; the disproportionately large impacts it has on marginalized communities; and the increased risk of large-scale events with irreversible consequences.

Friends of the Earth Netherlands and the additional plaintiffs sought a reduction in emissions from Shell instead of monetary damages and based their claims on Royal Dutch Shell's obligation to "contribute to the prevention of dangerous climate change through the corporate policy it determines for the Shell group."

The case listed eight key risks to humans posed by climate change that are "reasons for concern," including:

• Risk of death, injury, ill-health or disrupted livelihoods due to storm surges, coastal flooding and sea level rise.
• Risk of severe ill-health and disrupted livelihoods among urban populations due to inland flooding.
• Systemic risks due to extreme weather events that lead to infrastructure damage and the breakdown of critical services.
• Risk of mortality and suffering during periods of extreme heat, especially for vulnerable populations and those working outdoors.
• Risk of food insecurity due to drought, warming and flooding that are linked to the breakdown of the food system.
• Risk of biodiversity loss and loss of marine and coastal ecosystems and the functions, goods and services they provide, especially fishing in the tropics and the Arctic. 
• Risk of biodiversity loss and loss of terrestrial and inland water ecosystems and the functions, goods and services they provide. 
• Risk of loss of rural livelihoods and income due to reduced agricultural productivity and insufficient access to irrigation and drinking water.

Click here for more FreightWaves articles by Alyssa Sporrer.

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