Shell Prevails in Appeal Against Landmark Climate Ruling Following Dutch Court Decision

The Hague Court of Appeal delivered its judgment last Tuesday in the closely watched appeal between Shell and Friends of the Earth Netherlands (Milieudefensie). While the court reaffirmed that Shell is responsible for reducing its carbon emissions, it concluded that the company should not be bound by a specific reduction rate.

This appeal stemmed from a groundbreaking 2021 decision by The Hague District Court, which upheld claims from Milieudefensie and other environmental groups that Shell had acted unlawfully by failing to meet societal standards of care. The original ruling required Shell to reduce its carbon emissions—including Scope 1, 2, and 3 emissions, covering its own operations and those of its suppliers and customers—by 45% by 2030 compared to 2019 levels.

Presiding over the appeal, Judge Carla Joustra upheld the principle that Shell has a duty to reduce emissions as part of its broader responsibility to citizens. The ruling affirmed that courts can enforce emission reductions even in the absence of legislated targets, citing the protection from dangerous climate change as a fundamental human right. However, the court declined to impose the 45% reduction mandate, citing several key factors:

• Lack of Scientific Consensus: The court noted insufficient and inconsistent evidence from climate science to support enforcing a specific percentage reduction for companies like Shell.
• Shell’s Progress on Scope 1 and 2 Emissions: The court acknowledged that Shell had reduced emissions from its production processes by 31% compared to 2016 and had set a goal of halving its Scope 1 and 2 emissions by 2030.
• Ineffectiveness of Scope 3 Mandates: The court concluded that imposing a specific reduction target for Scope 3 emissions—those produced by customers using Shell’s products—would likely be counterproductive. For instance, if Shell reduced its supply of natural gas, other companies could step in to meet demand, resulting in no net reduction in global emissions.

The court agreed with Shell's argument that reducing Scope 3 emissions in the manner proposed could have unintended consequences. Shell warned that such measures might drive customers to switch from natural gas to more polluting energy sources, such as coal. Both Shell and the court concluded that enabling customers to transition from coal to natural gas could lead to a net decrease in global emissions, even if Shell’s Scope 3 emissions increased.

“We are pleased with the court’s decision, which we believe is the right one for the global energy transition, the Netherlands, and our company,” said Shell CEO Wael Sawan. He reiterated Shell’s commitment to achieving net-zero emissions by 2050, including halving its Scope 1 and 2 emissions by 2030—a target acknowledged by Judge Joustra in the ruling.

In a press release, Shell emphasized the importance of balancing secure and affordable energy supply with the urgent need to combat climate change. The company maintained that court rulings targeting individual corporations would not reduce the demand for carbon-based energy, asserting that coordinated policies and cross-sector investment are essential for driving progress toward net-zero goals.

Milieudefensie, though disappointed by the ruling, highlighted the progress achieved since the 2021 decision. “This hurts,” said Donald Pols, director of Milieudefensie. “At the same time, this case has ensured that major polluters are not untouchable and has intensified the debate about their responsibility in combating dangerous climate change. That’s why we will continue to tackle big polluters like Shell.”

Milieudefensie pointed to several positive outcomes from the court’s decision:

• The court reaffirmed that companies like Shell bear responsibility for reducing emissions, even without specific percentage mandates.
• It upheld the principle that protection from climate change is a human right, reinforcing the obligation of businesses to respect those rights.
• The court acknowledged that Shell’s exploration of new oil and gas fields conflicts with the Paris Agreement, which binds EU-based companies under directives such as the Corporate Sustainability Due Diligence Directive (CSDDD) and the Corporate Sustainability Reporting Directive (CSRD).

Milieudefensie and Friends of the Earth International expressed optimism about the broader impact of the 2021 ruling, citing new legislation and similar lawsuits inspired by the case. “Shell remains one of the world’s biggest polluters and must take responsibility for its contribution to dangerous climate change. We are leading this fight with the thousands who support us,” Pols declared outside the court.

Milieudefensie and its parent organization are determined to keep fighting global climate change by going after what they label as ‘big polluters’, which include governments and companies like Shell. "Shell is and remains one of the world’s biggest polluters and must take responsibility for its contribution to dangerous climate change. We are leading the fight with all the thousands of people who support us" Pols stated outside the court after the ruling to gathered supporters.

The timing of the ruling coincided with the opening of the COP29 UN Climate Summit in Baku, Azerbaijan, which was marked by disputes over the prominence of fossil fuels on the agenda. While frustrations over the summit’s progress have surfaced, early endorsements of a global carbon market framework have been seen as a positive step.

Milieudefensie plans to appeal the decision to the Dutch Supreme Court, according to the Court of Appeal’s ruling announcement.

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