Dutch court orders Shell to dramatically cut emissions, saying it’s partly responsible for climate change

May 26, 2021, 4:02 PM UTC
Updated May 27, 2021, 10:08 AM UTC

A court in the Netherlands has ordered Royal Dutch Shell Plc to dramatically cut its greenhouse gas emissions in a landmark climate case that could make oil and gas majors responsible for their carbon pollution.

The ruling said Shell must reduce its emissions by 45% —from levels in 2019 when the oil giant’s carbon emissions were near all-time highs—by 2030. Shell’s previous target was to reduce emissions by 45% by 2035 but from levels in 2016. The court in The Hague noted that this target was not “concrete” enough.

“There is no room for balancing interests,” the court said in a statement.

The new obligation relates to Shell’s entire energy portfolio and to the aggregate volume of all emissions. Shell said in a written statement that it expects to appeal the “disappointing court decision.”

The case was initially brought by Dutch environmental group Milieudefensie in 2018. By 2019, the group had amassed 17,000 co-plaintiffs and six other organizations to join the lawsuit.

Setting a precedent

“This statement is going to change the world. People around the world are ready to sue oil companies in their own country, following our example. And not only that. Oil companies will become much more reluctant to invest in fossil fuels,” Milieudefensie’s lawyer Roger Cox said in a statement.

This case also sets itself apart from other climate lawsuits which usually demand money as compensation for carbon emissions. Milieudefensire’s case demanded that Shell change its policy to adhere to the goals of the Paris climate agreement.

Shell’s emissions are nine times more than the whole of the Netherlands combined and accounts for 1% of total global emissions.

The Dutch court’s ruling is only legally binding in the Netherlands but will be closely watched by big oil executives globally. Environmental campaigners are hoping the ruling sets a precedent.

Markus Gehring, an expert in sustainable development law at the University of Cambridge, called the verdict revolutionary.

This ruling shows that the Paris Agreement, set out to stop the global temperatures from rising 1.5 degrees Celcius above pre-industrial levels, has directly influenced the legal interpretation of domestic law, Gehring added.

“It’s a first instance case. We know that the district court of the Hague is part of the avant-garde of judges that deal with these climate issues. But it is perfectly in line with the now famous Urgenda case where it was appealed all the way to the Dutch supreme court and was not overturned,” Gehring told Fortune.

In the famous 2019 Urgenda case, the Supreme Court of the Netherlands ruled that emissions reduction is a human right, forcing the Dutch government to reduce emissions by 25% by the end of 2020 from levels in 1990.

Milieudefensie has stood by the opinion that Dutch politics is “slow and delaying with climate majors” and the responsibility for solving the climate crisis has fallen on small businesses and citizens.

Last week, the International Energy Agency published a report saying that new oil and gas exploration projects must end this year in order to bring down CO2 emissions fast enough to reach net zero by 2050.

Our mission to make business better is fueled by readers like you. To enjoy unlimited access to our journalism, subscribe today.