Shell to appeal ‘historical’ Dutch court ruling on emissions cuts

Oil major Shell has confirmed it will appeal a ruling issued by a Dutch court ordering the energy company to accelerate its carbon emission reduction target.

Shell CEO Ben van Beurden; Source: Shell

In May 2021, the District Court in The Hague ruled that Shell must reduce its global net carbon emissions by 45 per cent by 2030 compared to 2019 levels.

Furthermore, the court said that Shell is also responsible for emissions from customers (scope 3) and suppliers and that the company must comply with the judgment immediately.

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Shell said on Tuesday that it was focused on rising to the challenge of the ruling and accelerate its ‘Powering Progress’ strategy to become a net-zero emissions energy business by 2050, in step with society’s progress towards the goal of the Paris Agreement on climate change.

The oil major committed in April 2020 to become a net-zero company by 2050 and said it would be reducing the net carbon footprint of the energy products it sells to its customer by around 30 per cent by 2035 and by around 65 per cent by 2050.

Shell further stated in the statement on Tuesday, that the ‘Powering Progress‘ strategy was announced in April 2021. It reminded that the court did not consider this because the hearings that led to the ruling took place several months earlier.

In May 2021, Shell became the first energy company to put its energy transition strategy to a vote of shareholders at its annual general meeting.

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It secured 89 per cent support and Shell claimed it would give investors an annual vote on its progress in delivering on its strategy.

Also, Shell set out its intention to reduce both the emissions from its own operations, referred to as Scopes 1 and 2, and those produced when customers use the energy products it sells. These Scope 3 emissions account for over 90 per cent of Shell’s emissions.

The company added that it already set out a number of actions to reduce Scope 1 and 2 emissions through a combination of energy efficiency improvements, the elimination of routine flaring, carbon capture and storage technology.

The oil major is also working with suppliers to use renewable electricity in facilities and concentrating its global refining portfolio from 13 Shell-controlled sites in 2019 into five ‘Energy and Chemicals‘ parks by 2030.

Shell is working on a plan to scale up and accelerate these efforts within its Powering Progress strategy.

Shell chief executive Ben van Beurden said: “We agree urgent action is needed and we will accelerate our transition to net-zero.

“But we will appeal because a court judgment, against a single company, is not effective. What is needed is clear, ambitious policies that will drive fundamental change across the whole energy system.

“Climate change is a challenge that requires both urgent action and an approach that is global, collaborative and encourages coordination between all parties”.

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Previously, van Beurden acknowledged that the energy transition is far too big a challenge for one company or even a continent and that society, governments, and companies need to work together to tackle it.

He also pointed out at the time that in order to achieve the change the world needs, we need to address the demand for carbon-based energy, not just supply.