A Dutch court ordered Royal Dutch Shell to slash its CO2 emissions by 45% from its energy products and overall operations by 2030. This is the first time a court has ordered a company to reduce its emissions to achieve climate goals. Experts say the ruling could have broad-reaching impacts for similar cases worldwide and that the industry may see similar mandates in other countries and courts in the future. Advocates are celebrating this move toward legal accountability for big fossil fuel companies.

Why This Matters

Despite many oil companies making promises to cut emissions, the world isn't moving fast enough to meet the goals of the Paris Agreement. Shell previously pledged to meet net-zero emissions, but experts and environmental groups say they aren't taking their pledges seriously. Shell has continued to make investments in oil and gas extraction. This isn't surprising; oil and gas companies have led the world to the tipping point, pushing anti-climate action agendas and fighting tooth and nail to protect their financial interests. The Dutch court that issued the order said that holding these companies accountable is key to meeting climate goals and upholding human rights across the globe.

Raging Bull

Shell has announced that it intends to fight the ruling and that its current climate goals align with international destinations. The company said in a statement:

We are investing billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables, and biofuels. We want to grow demand for these products and scale up our new energy businesses even more quickly. We will continue to focus on these efforts and fully expect to appeal today’s disappointing court decision.

Shell has currently pledged to reduce its emissions by 20% by 2030 and 45% by 2035. Even if the company appeals, the verdict is immediately enforceable -- though critics say that enforcement is easier said than done. The order will most likely only be enforceable in the Netherlands, and the court found that Shell's current carbon emissions were, in fact, lawful.

Despite potential complications, advocates are celebrating. "This is a turning point in history," said Roger Cox, a lawyer for Friends of the Earth Netherlands (FOEI). Others are looking forward to what the future may hold for similar litigation. "I can imagine this will inspire a series of other cases against companies, especially those active in the oil extraction industries like Shell," said Eric De Brabandere, Director Grotius Centre and Professor of International Dispute Settlement at Leiden University. "It is a groundbreaking decision, it's really a landmark."

Cherry on Top

Even without litigation, Shell isn't the only corporation on the emissions chopping block. Activist investors scored a major victory last week, winning three seats on ExxonMobil's board to push the company to more quickly shift towards sustainability. A third seat is still too close to call.

Advocates say a wave of change is right on the horizon. "Shell is the first but will not be the last company that will be forced to stop dangerous climate change," FOEI's director Donald Pols told reporters. "As of today, climate lawsuits are a material risk for all major polluters in the world," he added.