Shell wins appeal against order to cut emissions

In a verdict issued this morning, a Dutch appeals court struck down a 2021 ruling ordering oil and gas giant Shell to cut emissions by 45% over 2019 levels by 2030.

The court agreed with the original verdict that "protection from dangerous climate change is a human right." However, it ruled that while the oil and gas giant has a responsibility to reduce its emissions, Shell has the right to decide how it will make these cuts.

Friends of the Earth Netherlands (Milieudefensie), which initially led the complaint against Shell in 2019, saw some positives, despite its 2021 court win being overturned.

"This hurts," said Donald Pols, Director of Friends of the Earth Netherlands. "At the same time, we see that this case has ensured that big polluters are not inviolable and has further fueled the debate about their responsibility in countering dangerous climate change. That is why we continue to crack down on big polluters like Shell.”

Shell Chief Executive Officer Wael Sawan called the decision "the right one for the global energy transition, the Netherlands and our company."

Original verdict 'a turning point in history'

The initial landmark May 2021 court judgmentsubsequently appealed by Shell — one of the world's largest corporate emitters of fossil fuels — extended to both the company's own emissions and those produced by people when burning its products, like its gas in their cars.  

The court then stated the oil and gas major should follow the "worldwide agreement" that a 45% net reduction in CO2 emissions by 2030 is necessary to meet the Paris target of limiting global heating to 1.5 degrees Celsius (2.7 Fahrenheit) to avoid dangerous climate change.

"This applies to the entire world, so also to Shell," the judge said at the time, adding that Shell's commitments to cut emissions by 20% were insufficient.

The Dutch appeals court today agreed with the initial ruling that new oil and gas fields are at odds with the Paris climate agreement. 

Friends of the Earth Netherlands and six other organizations filed the case against Shell in 2019 on the grounds the company's emissions harmed the fundamental rights of 17,000 Dutch citizens by fueling climate change.  

The 2021 initial ruling was deemed "a turning point in history" because it was the first time a judge "ordered a large polluting corporation to comply with the Paris Climate Agreement," said Roger Cox, lawyer for Friends of the Earth Netherlands at the time. 

Shell accused of failing to cut emissions

The 2021 ruling was effective immediately, meaning that Shell should not continue to expand oil and gas extraction while it waited for its appeal, said Friends of the Earth.

The Dutch appeals court agreed that Shell was on course to reduce its own emissions in line with the 2021 ruling.

But a report released by Friends of the Earth Netherlands and climate think tank Oil Change International in March 2024 claimed that the company had approved at least 20 "new oil and gas extraction assets" since the original verict. 

"Shell continues to plan for levels of oil and gas production and investment that undermine the world's chances of curtailing climate disaster and are incompatible with holding global temperature rise to 1.5 C," said the organizations.

Reporting by environmental campaigners Global Witness claimed that a "significant portion" of spending earmarked for "renewable and energy solutions" in 2021 instead went to "investments in climate-wrecking gas."

About 1.5% of Shell's total expenditure in 2021 was invested in renewable wind and solar electricity projects, according to the UK-based climate group.

"It is obvious that Shell is currently increasing its emissions," Nine de Pater, campaigner at Friends of the Earth Netherlands told DW, referring also to "growth in gas." Emissions reduction commitments made by Shell have been "watered down" in recent years, she added.

But Shell boss Wael Sawan previously refuted claims that the fossil fuel firm's renewable energy solutions' accounting is misleading due to the high gas component. That statement came following a Global Witness request that the US Securities and Exchange Commission (SEC) investigate Shell's renewables segment. 

Sawan said in a call with reporters in 2023 that there "had been a real pivot toward energy transition investments."

In its appeal to the verdict in the Hague, Shell also said it was being unfairly targeted given that climate change is a global problem. It argued it was taking action to cut emissions and denied it had ignored the ruling.

Shell has said in statements that it "invested $5.6 billion [€5.27 billion] on low-carbon solutions, more than 23% of our total capital spending" in 2023.

Worsening climate impacts increase urgency of CO2 reduction

Donald Pols said in a statement just before the verdict was announced that climate impacts were too great to ignore. 

"[T]he climate crisis has increased in intensity. Floods, wildfires, heat records, and other climate disasters dominate the news. One thing is certain: this decade is crucial for tackling dangerous climate change," said Pols. 

At the same time,some 96% of oil and gas companies are exploring and developing new reserves across 129 countries, according to data published by German environmental and human rights NGO, Urgewald. 

But campaigners remain hopeful. Even if "court cases take a long time, so you don't see an impact right away," Nine de Pater says climate litigation is an "important part of the fight against climate change."  

That's because they "help to fuel debate about the responsibility of polluting companies," said de Pater, adding that since the 2021 Shell decision, there has been a wave of other climate litigation cases, including in Belgium against Total Energies. 

"We clearly saw that some of the arguments that we used in the court case against Shell were very useful in these cases," she said. 

This article is being updated as reactions to the court verdict on Tuesday 12.11.24 come in. 

Edited by: Jennifer Collins and Tamsin Walker