Shell Ordered to Accelerate Emissions Reductions

Royal Dutch Shell’s emissions reduction efforts are not enough, according to a Dutch court. The energy giant now must shift their timelines to meet more stringent standards sooner.

Shell, along with many other energy companies globally, have joined in the fight against climate change by pledging their own plan to reduce emissions from their operations.

Originally, Shell had committed to a 20 percent reduction in carbon emissions by 2030, with plans to become net-zero emitters by the year 2050. In this case, net-zero means that Shell would take measures to remove as much carbon dioxide from the atmosphere as it emits, thus achieving a total net of zero emissions annually.

Though Shell has made this commitment, it falls short of the goals set via the Paris Accord, to which the Netherlands, the headquarters of Shell, is a signatory. Though it is individual countries, not companies or corporations, that sign onto the Paris Accord, the policies of the Accord naturally affect businesses that work in signatory states.

Dutch climate activism group MilieuDefensie believed that Shell violated human rights by not adhering to the goals of the Paris Accord, and filed a lawsuit. According to Bloomberg Law, the Dutch court ruled in favor of MilieuDefensie, with Judge Larisa Alwin stating that “even if states do nothing or only a little, companies have the responsibility to respect human rights”. Additionally, the court ordered Shell to “reduce its CO2 emissions by 45 percent by 2030 with respect to the level of 2019 for Shell group and the suppliers and customers of the group”. Shell has already indicated that it plans to appeal the ruling.

Whether overturned on appeal or not, the ruling is indicative of not only the global trend to combat climate change, but also how activism is moving from protests to the courts. As Shell operates on a global scale, the change in operational behavior could spark changes in their competitors as well. Other major energy companies, like Exxon and Chevron, are following the trend by making their own decarbonization commitments, and changing the composition of their boards as well. Earlier this year, investors of Chevron voted to reduce the company’s emissions and two seats of Exxon’s board of directors were won by members of the SMALL, environment-focused investment firm Engine No. 1.

The Dutch court’s stance on emissions reductions mirrors attitudes at the state and federal level. Shell is now building a state-of-the-art petrochemical plant in Beaver County that will use natural gas from the Marcellus and Utica shale basins. It has received air quality permits that allows it to emit about 2.2 million tons of CO2 into the atmosphere each year. However, with upcoming policies such as President Biden’s greenhouse gas targets and Gov. Wolf’s efforts to have Pennsylvania join the Regional Greenhouse Gas Initiative (RGGI), could put further pressure on Shell and other energy companies to slash emissions.