The oil company is appealing because it believes the verdict is not only harmful for Shell itself, but because it could also have far-reaching consequences for the Dutch economy and the Dutch business climate.
In 2021, the judge ruled that Shell must do more to combat ‘dangerous climate change’. The oil company is obliged to “reduce the CO2 emissions of the Shell group, its suppliers and customers by a net 45 percent by the end of 2030 compared to 2019 levels,” the judge said at the time.
International climate agreements
Milieudefensie says it awaits the appeal ‘with confidence’. The judge’s ruling is in line with international climate agreements, the environmental organization emphasizes. According to recent research by Milieudefensie, Shell wants to invest in hundreds of oil and gas projects for decades to come. According to Milieudefensie, Shell is thus endangering human lives.
The fact that Shell considers the case important is evident from the attention the group pays to it on its website and from the large number of lawyers and other employees working on the lawsuit. Shell recognizes that it has a responsibility to combat climate change and invests billions in green energy projects. But the company calls Milieudefensie’s approach wrong.
Dutch law has no obligation for individual companies to reduce their emissions by 45 percent by 2030. “We are appealing the ruling because there is no legal basis for it in Dutch law and because we do not believe it is the right solution for the energy transition,” says CEO Frans Everts of Shell-Netherlands.
Counterproductive
The company even calls it counterproductive. If Shell divests activities, they may be taken over by other companies, which will not benefit the climate. Shell also fears that it will cost jobs.
An important aspect of the lawsuit is the question of whether Shell can be held responsible for what its customers do. The court requires Shell not only to quickly reduce its own emissions, but also to make a ‘substantial effort’ to reduce those of its customers.
“What Milieudefensie is aiming for is simply not feasible – or even reasonable – to expect from a single company,” Shell said. Consumers decide for themselves which energy sources they use, and companies have no control over this.
Customers
Milieudefensie points out that the vast majority of Shell’s emissions are caused by customers who, for example, fill up with petrol. And as long as Shell continues to pump and supply oil and gas, it will be more difficult for consumers to make sustainable choices, according to Milieudefensie.
The emissions of Shell and its customers together are many times greater than the emissions of the Netherlands. And therefore tackling it is important to combat climate change. The environmental organization is also upset that Shell has approved projects to extract additional fossil energy even after the court ruling in 2021.
Milieudefensie relies on a report from the leading International Energy Agency. According to this IEA, there is no longer room for investments in new oil and gas extraction projects if you want to limit global warming to a maximum of 1.5 degrees.
Exciting for lawyers
The case is being followed with great interest by lawyers. “It is very exciting what is happening here,” says Gerrit van der Veen, professor of environmental law at the University of Groningen. The impact may be even greater than that of the Urgenda lawsuit, he says.
In that case, the Dutch State was forced to reduce emissions in the Netherlands by a quarter. This was a source of inspiration for many other lawsuits, including abroad. But now it’s about what a company should do. “And there are many more companies than states,” says Van der Veen.
Elbert de Jong, professor of private law at Utrecht University, will also follow the case closely. “There are many new legal questions involved. And it is also very exciting because it is a unique case worldwide that is also ahead of the troops.”
These kinds of things, says De Jong, are partly due to the lack of legislation by politicians. That is why judges are now being asked to make a decision. Particularly interesting, he thinks, is how the court will view the responsibility that Shell has towards its customers. “You really haven’t seen that aspect anywhere else in the world.”
