Shell Climate Case Revived before Dutch Supreme Court

Friends of the Earth Netherlands (Milieudefensie) has escalated a climate lawsuit against Shell PLC to the Dutch Supreme Court, building on a partial win before The Hague Court of Appeal.

The group said the fresh challenge, whose result could not be overturned, builds on the appellate court’s ruling last November that oil and gas companies have a duty to curb emissions. The new challenge is asking the country’s highest court to enforce a specific emission reduction target for Shell, a plea that the appellate court denied.

“Such an obligation is important for curbing climate change”, Milieudefensie said in an online statement Tuesday. “Only when the judge establishes a specific objective can we ensure that Shell takes real action”.

On November 12, 2024, the appellate court agreed with Shell that the company could not be legally forced to set a specific emissions target, overturning a 2021 ruling by a lower court.

The Hague District Court on May 26, 2021, ordered Shell to limit the annual volumes of carbon dioxide released into the atmosphere by its business activities and energy-carrying products by at least 45 percent net by 2030 relative to the 2019 level.

In November’s decision, the Court of Appeal affirmed that European civil courts could be asked to enforce states’ obligation to protect citizens from climate change but concluded there was no legal and scientific basis to impose a comprehensive 45 percent reduction figure on Shell.

Shell has set targets of cutting Scope 1 and 2 emissions by 50 percent by the end of the decade compared to 2016 and customer emissions from the use of Shell’s oil products by 15 to 20 percent by 2030 relative to 2021.

“Under the right to effective measures to protect human rights, the Appeal Court should have set a specific, measurable minimum reduction percentage”, Milieudefensie said Tuesday.

It challenged the appellate court’s judgment that there was no scientific consensus that would guide the court to impose a specific reduction obligation on Shell. “If all climate scientists had to agree on a percentage, the court may never set a reduction target”, Milieudefensie said.

“And yet the court chose only to look at the narrow standard of scientific consensus. The law has a duty also to consider international climate agreements and legal principles”.

In the new challenge, the Supreme Court will not check new evidence. “It will only assess whether the Appeal Court has applied the law correctly and whether its ruling was ‘reasonable’”, Milieudefensie said.

Rigzone emailed a comment request to Shell.

In the case before the appellate court, the plaintiffs acknowledged that Shell’s Scope 1 and 2 target corresponds to a 48 percent reduction of operational emissions by the end of 2030 relative to 2019, according to the appeal decision published on the Dutch judiciary’s website. However, the plaintiffs told the court “there is nevertheless an impending violation of a legal obligation because Shell has adjusted its policy before, and this target offers no guarantee of further or permanent emission reductions”, the court document stated.

The court ruled, “To assume the impending violation of a legal obligation alleged by Milieudefensie et al., the court would have to find that it is likely that Shell will not have reduced its scope 1 and 2 emissions by 45 percent by 2030, despite Shell’s concrete plans and the measures Shell has already taken to implement those plans”.

“Milieudefensie et al. have not provided sufficient arguments in support of that”, it added.

The court said it could not also ask Shell to make a Scope 3 target that aligns with the plaintiffs’ demand for a 45 percent overall reduction. While the court’s position is that Shell should make an “appropriate contribution” to address adverse climate change, “that alone does not justify ignoring the specifics of Shell’s supply portfolio and ignoring the possibility… that an increase in Shell’s scope 3 emissions in the shorter term could, on balance, lead to globally lower emissions”.

The court acknowledged “broad consensus” that to meet the Paris Agreement’s aim of limiting the increase in global temperature to 1.5 degrees Celsius, “reduction pathways must be chosen in which CO2 emissions are reduced by a net 45 percent by the end of 2030 relative to at least 2019 and by 100 percent by 2050”.

“However, these reduction pathways involve a global reduction, which amounts to a net 45 percent. This means that there are sectors and companies in countries that need to reduce more and there are sectors and companies in countries that are required to reduce less”, the court explained.

“Unlike Milieudefensie et al. argue in these proceedings, the court cannot determine what specific reduction obligation applies to Shell”.

However, the court took issue with Shell’s interpretation of a European Court of Human Rights (ECtHR) ruling about states’ level of discretion in fulfilling rights obligations.

“From this case law of the ECtHR, Shell has drawn the conclusion that civil courts should exercise restraint with regard to ‘managing climate change’, including in civil law relationships”, the court said. “However, the fact that the ECtHR grants states a (wide) margin of appreciation as to the means to be deployed to combat climate change does not imply that the civil courts would be unable to rule that the social standard of care entails that there is a concrete legal obligation on the part of Shell to combat climate change.

“After all, the assumption of that legal obligation may equally leave room in the assessment of the means necessary to fulfill the legal obligation. Moreover, this concerns the ECtHR's restraint in reviewing states’ policies.

“It does not follow from this case law that national courts must exercise the same restraint where the protection of fundamental rights contained in the ECHR is concerned”.

Welcoming the decision, Shell said the world needs to meet “growing demand for energy while tackling the urgent challenge of climate change”.

“There has been significant progress in the transition to low-carbon energy where governments have introduced policies to encourage investment and drive changes in demand”, it said in a statement then.

“As Shell has stated previously, a court ruling would not reduce overall customer demand for products such as petrol and diesel for cars, or for gas to heat and power homes and businesses. It would do little to reduce emissions, as customers would take their business elsewhere”.

To contact the author, email jov.onsat@rigzone.com