Shell confirms appeal against Dutch climate ruling

Shell has confirmed it will appeal against a ruling by a court in The Hague in May that would require the Anglo-Dutch oil major to make bigger cuts to its emissions.

In a statement announcing the appeal, CEO Ben van Beurden promised that the company would fast-track its existing net-zero strategy, without specifying how this would affect its targets. Shell vowed in February to cut the net carbon intensity of its products by 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050, using emissions in 2016 as the baseline.

In a case brought by NGOs, the district court in The Hague on May 26 ordered the company to instead target a steeper 45% reduction to its Scope 1, 2 and 3 emissions using the level in 2019 as the baseline. These mandated targets also refer to absolute emissions rather than intensity, which will make it much harder for Shell to realise its growth plans in natural gas.

"We agree urgent action is needed and we will accelerate our transition to net zero," van Beurden explained. "But we will appeal because a court judgement, against a single company, is not effective. What is needed is clear, ambitious policies that will drive fundamental change across the whole energy system. Climate change is a challenge that requires both urgent action and an approach that is global, collaborative and encourages coordination between all parties."

Shell reiterated that it would seek to cut its Scope 1 and 2 emissions through energy efficiency improvements, the elimination of routine flaring, carbon capture and storage, using renewable energy to power facilities and downsizing its refining portfolio. The major announced on July 8 it was divesting a 37.5% interest in the 220,000 barrel/day PCK Schwedt oil refinery in Germany to Estonia’s Liwathon Group for an undisclosed sum.

Shell is transitioning its business towards lower-margin renewables and electricity while scaling back its more lucrative oil operations. Yet in the near term it is also seeking to boost shareholder rewards. On July 7 it announced it would increase shareholder distributions to between 20 and 30% of cash flow from its operations.