Shell faces court ruling on greenhouse gas emission reduction targets

Climate activists want oil and gas giant to reduce emissions by 45 per cent by 2030

(Getty Images)

Climate activists will on Wednesday find out if their bid to force Royal Dutch Shell into setting more ambitious targets to reduce its greenhouse gas emissions has been successful.

In what has been described as a landmark case, a Dutch court will make a ruling on a challenge filed by seven activist groups - including Greenpeace and Friends of the Earth - which could force the oil and gas giant into a change of strategy.

They are demanding that Shell cuts its carbon emissions by 45 per cent by 2030, a much steeper reduction than the company's current goal of reducing the carbon intensity of the products it sells by 20 per cent over the next decade.

The challenge was first filed in April 2019 on behalf of more than 17,000 Dutch citizens who say Shell is threatening human rights as it continues to invest billions in the production of fossil fuels.

The lawsuit is said to be the first in which environmental groups have turned to the courts to try to force a major energy firm to change its behaviour. It was initially heard in a court in The Hague, where Shell's headquarters are based.

The groups have said they feel encouraged by the so-called "Urgenda" case, in which the Dutch High Court in 2019 ordered the government to step up its fight against climate change, as it said a lack of action was putting Dutch citizens in danger.

If the lawsuit is successful then it would effectively force the Anglo-Dutch firm to transition away from oil and gas more quickly.

Shell, which plan’s to achieve net-zero carbon emissions by 2050 or sooner, has said court action will not accelerate the world's transition away from fossil fuels.

The world's top oil and gas trader, Shell has said its carbon emissions peaked in 2018, but intensity-based reduction targets allow it in theory to expand its oil and gas output.

The plaintiffs claim that Shell's climate strategy is not in line with the UN-backed 2015 Paris climate agreement to limit global warming to 1.5 degrees Celsius above pre-industrial levels.

Shell says its 2050 net-zero target is aligned with the Paris agreement and that it will move "in step" with society's progress in the energy transition.

It said in a statement it agrees "that action is needed now on climate change. What will accelerate the energy transition is effective policy, investment in technology and changing customer behaviour. None of which will be achieved with this court action."

In February Shell updated its plan to tackle climate change, saying it planned to curb its emissions through rapid growth of its low-carbon businesses, including biofuels and hydrogen.

Although the company said its oil output peaked in 2019, its spending will remain tilted towards oil and gas in the near future.

Additional reporting by Reuters