AMSTERDAM, (Reuters) – Shell SHEL.L today told a Dutch court a 2021 order that it should drastically cut greenhouse gas emissions lacks a legal basis and risks obstructing the fight against climate change.
In a landmark ruling that shocked the energy sector, a lower Dutch court in 2021 ordered Shell to reduce its planet warming carbon emissions by 45% by 2030 from 2019 levels.
The order related not only to Shell’s own emissions, but also to those caused by the buyers and users of its products.
Shell said that implementing the ruling would force it to shrink its business and would only lead customers to shift to other suppliers of fuel.
“This case has no legal basis”, Shell’s lawyer Daan Lunsingh Scheurleer told a court in The Hague on the first day of hearings in Shell’s appeal against the order.
“It obstructs the role that Shell can and wants to play in the energy transition.”
The energy crisis triggered by Russia’s invasion of Ukraine has shown the importance of fossil fuels, Lunsingh Scheurleer said, as governments scrambled to increase imports of liquefied natural gas and spent billions to compensate households for surging energy prices.
“Oil and gas will play an important role in both the security of supply and affordability during the energy transition,” he said.
Shell’s lawyers stressed the company’s investments in the development of non-fossil fuels as well as its support for the Paris Climate Agreement and said the company’s targets to reduce its own emissions went further than the court’s order.
But a general order to reduce total emissions of its products by 45% went too far, Lunsingh Scheurleer said, as a wider implementation would cripple the Dutch economy.
“A general application of this order is impossible without drastic measures,” he said.
Despite Shell’s objections, Friends of the Earth Netherlands, which brought the case, said it was confident heading into the appeal.
“The scientific basis on which we’ve founded our claims against Shell has only solidified,” the group’s lawyer Roger Cox said before the hearings.
“I am confident that we can once again convince the judges that Shell needs to act in line with international climate agreements.”
Shell earlier this month weakened a 2030 carbon reduction target and scrapped a 2035 objective, citing expectations for strong gas demand and uncertainty in the energy transition, even as it affirmed a plan to cut emissions to net zero by 2050.
Shell now targets a 15-20% reduction in net carbon intensity of its energy products by 2030, compared with 2016 intensity levels. It had previously aimed for a 20% cut.
The court has planned four days of hearings for the appeal this month. A verdict is expected in the second half of the year.
A further appeal to the country’s Supreme Court is generally expected regardless of the outcome of this appeal.