Shell Climate Appeal Sees Dutch Group Push for Tougher Rules

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(Bloomberg) — A Dutch environmental group is pushing for a stricter interpretation of the landmark 2021 court order for Shell Plc to slash its carbon emissions, seeking to turn the company’s appeal of that verdict to its advantage.

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At a hearing in The Hague on Friday, Milieudefensie, the Netherlands branch of Friends of the Earth, argued that Shell shouldn’t be allowed to simply sell assets to comply with the order to cut its emissions by 45% by 2030. The company should also be prevented from using carbon capture and storage to achieve the reduction, the environmental group’s lawyer Roger Cox told the court.

Lawyers for Shell, which is seeking to overturn the 2021 ruling, argued against this. 

Eliminating asset sales as an option for complying with the emissions reduction obligation “could de facto result in Shell being obliged to decommission or write off assets or components,” Shell’s lawyer Daan Lunsingh Scheurleer told the court. “An order in this form could oblige Shell to breach contractual obligations.”

In 2021, a trio of judges in The Hague ruled that Shell must reduce emissions in 2030 by the equivalent of 740 million tons a year of carbon dioxide — more than the emissions of Germany. That’s far more ambitious than the company’s current plan for a reduction in its carbon intensity — not necessarily total emissions — of 15% to 20% by 2030.

Shell’s appeal could prove to be a watershed moment for the oil industry in Europe, where major companies embraced the transition to clean energy during the pandemic but have since pivoted back toward fossil fuels as a surge in oil and gas prices delivered record profits. 

Shell and Milieudefensie have faced each other in court for four days over the past two weeks. The company has argued that the 2021 ruling had no legal basis, would be ineffective and counterproductive, and potentially result in higher energy costs for consumers. Cox says that the climate impact of the fossil fuels Shell sells violates human rights, in particular the right to life.

Friday is the final day of hearings in the appeal. A verdict will likely come in the second half of the year. Whoever loses the appeal could still take the case to the Dutch Supreme Court.