Royal Dutch Shell Ordered to Cut Emissions

Royal Dutch Shell, a global oil company based in Europe, is one of the most profitable and largest companies in the world. In early February 2021, Royal Dutch Shell announced an update to its net-zero emissions strategy, breaking down key goals and facts about the company, including that the Company’s total carbon emissions had peaked in 2018, along with oil production peaking in 2019. The net-zero emissions goal was announced in 2020, with a goal of achieving a 45 percent reduction by 2035 and carbon neutrality by 2050. The February update provided incremental targets to 2050, using 2016 as a base year. Other components to the update included increasing carbon, capture, and storage capacity and increasing carbon offsets, a measure our blog series has covered before.

In 2018, thousands of Dutch citizens, along with seven environmental and human rights organizations filed a case asking the Hague District Court to order Royal Dutch Shell to cut emissions in line the Paris Climate Agreement; Shell is responsible for about 1 percent of annual global emissions and invests heavily in oil and gas. Last week, the Court ordered that Royal Dutch Shell cut its net carbon emissions by 45 percent by 2030, compared to 2019 levels. The decision followed after the Court determined that Royal Dutch Shell’s current emission reduction plans were not sufficient; the ruling greatly speeds up Royal Dutch Shell’s public goals and makes them more concrete and actionable.

Not only did the ruling speed up the timeline for the company’s emissions reduction goal by 5 years, but it also changed the baseline year to 2019, likely requiring larger reductions than the original 2016 baseline.

The Court did not order any explicit steps towards achieve this goal, allowing Royal Dutch Shell freedom in planning its shifted pathway. Without rules to guide the Company in reaching the new goal, it is possible Royal Dutch Shell may exploit loopholes in the ruling. Despite this flexibility, Royal Dutch Shell noted its disappointment and intent to appeal the decision in a media announcement on the day of the ruling.

All in all, this unprecedented ruling sets the stage for future legal action against major polluters.