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Oil giant Shell has won a landmark case in the Dutch courts, overturning an earlier ruling requiring it to cuts its carbon emissions by 45%.
The Hague court of appeal said it could not establish that Shell had a “social standard of care” to reduce its emissions by 45% or any other amount, even though it agreed the company had an obligation to citizens to limit emissions.
Three years ago, a court in The Hague backed a case by Friends of the Earth and 17,000 Dutch citizens requiring Shell to reduce its CO2 emissions significantly, in line with the Paris climate accords.
The ruling came as climate talks involving some 200 countries got under way in Azerbaijan.
Environmental groups can now take their case against Shell to the Supreme Court – meaning that a final verdict in this far-reaching case may still be years away.
At the time, the 2021 ruling marked the first time a court had ordered a private company to align its workings with the Paris climate agreement, meaning that it was not sufficient for a company simply to comply with the law – it had to comply with global climate policy too.
Under the terms of the Paris Agreement on climate change, nearly 200 nations agreed to keep global temperatures “well below” 2C above pre-industrial levels.
The appeals court judge said that companies such as Shell were obliged to contribute to combating climate change based on the human right to protection against dangerous climate change.
However, the court said Shell was already working to reduce its emissions and the court could not establish whether it should make a 45% cut or another percentage, as there was no current accepted agreement in climate science on the required amount.
Shell has argued that it is already taking “serious steps to reduce emissions”. It complained the original ruling was unfair as it singled out one company for a global issue, and said it was unrealistic to try to hold Shell accountable for its customers’ choices.
Shell said if people considered progress was too slow towards cutting emissions then they should lobby governments rather than Shell to change policies and bring about a green transition.
The oil firm says its aim is to reduce the carbon intensity of products it sells by 15-20% by 2030 from a 2016 baseline. Shell also aims to become a “net zero” emissions company by 2050.
Part of the historic legal case hinged on the interpretation of an “unwritten duty of care” that exists under Dutch law, which requires companies to prevent hazardous negligence.
Friends of the Earth Netherlands argued that there was an international consensus that human rights offered protection against dangerous climate change and that companies had to respect human rights.
Shell’s successful appeal could have far-reaching implications for corporate climate responsibility.
A number of environmental groups around the world are now trying to force companies and governments to comply with the accords through the courts.
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