Shell Wins Appeal in Landmark Carbon Emissions Cut Ruling

The logo of energy giant Shell at a petrol station in Bochum, Germany, on March 8, 2022. Ina Fassbender/AFP via Getty Images

A Dutch appeals court ruled in Shell’s favor, overturning a landmark decision that ordered the British oil giant to significantly cut its carbon emissions.

The ruling reverses a 2021 verdict by a lower court in The Hague, which had mandated that Shell reduce its carbon emissions by 45 percent from 2019 levels by 2030 in line with targets set under the 2015 Paris Agreement. That decision was the first of its kind worldwide, setting a legal precedent by holding a private company accountable for a global climate agenda.

In its opinion released on Tuesday, the Court of Appeal in The Hague acknowledged that Shell, as a major oil company, has a “special responsibility” to reduce emissions and make an “appropriate contribution to preventing dangerous climate change.” However, the court concluded that setting a specific legal target for those cuts is beyond its purview.

“Shell must make an appropriate contribution to the climate goals of the Paris Agreement, but that existing climate legislation does not provide for a concrete reduction rate for individual companies or industries,” the appellate judges said.

The case was initially filed in 2018 by Milieudefensie, the Dutch chapter of Friends of the Earth, alongside six other environmental groups and more than 17,000 Dutch citizens. Milieudefensie reacted to the ruling with disappointment.

“This hurts,” Donald Pols, director of Milieudefensie, said in a statement. “At the same time, we see that this case has ensured that major polluters are not immune and has further fueled the debate about their responsibility in combating dangerous climate change. That is why we will continue to tackle major polluters, such as Shell.”

Shell, which relocated its headquarters from The Hague to London following the 2021 court defeat, celebrated the appeal decision, calling it “the right one for the global energy transition, the Netherlands” and the company.

“We do not believe that a court decision against a company is the right solution for the energy transition,” the company said on its website.

During its appeal, Shell argued in court that it’s the job of lawmakers, not judges, to make demands about corporate emissions. It also contended that the 2021 ruling would force it to scale back its business without real benefit to the climate goals, as other, potentially less-regulated companies could simply step in to exploit the fossil fuel resources Shell chose not to extract.

Further, Shell pointed out that the lower court had ordered it to reduce emissions not only from its own operations but also from the operations of its customers.

“Shell does not control its customers,” the company told the appeals court.

“[The 2021 ruling] effectively holds Shell, a single company, accountable for a global challenge–reducing consumer demand for carbon-based fuels,” the company says on its website. “What is really needed is action by all: governments, business, customers and wider society.”

The case could still go before the Supreme Court of the Netherlands, the kingdom’s final court of appeals. Milieudefensie has not said whether it plans to appeal.

Delegates from nearly 200 countries are currently gathered in Baku, Azerbaijan, for this year’s U.N. Climate Change Conference, also called COP29. At COP21 in 2015, attendees signed the Paris Agreement, a pledge committing them to cut carbon emissions to prevent global temperatures from increasing more than 2 degrees Celsius (3.6 Fahrenheit) above pre-industrial levels and aim for 1.5 degrees Celsius (2.7 degrees Fahrenheit).

On Jan. 21, 2021, just hours after being sworn into office, President Joe Biden reinstated the United States to the Paris Agreement. President-elect Donald Trump has promised to take the country out of the deal again, as he did during his first term in the White House.