Shell Strikes a Blow For Fossil Fuel Industry in Climate Litigation — For Now

Even though its fight was taking place in the Netherlands, where windmills happen to be plentiful, Shell knew it wasn’t just tilting at them.

On Tuesday the oil giant managed to overturn a Dutch legal order made in 2021 that had mandated the company cut its emissions 45% from 2019 levels by 2030. It’s a win for Shell which, like all fossil fuel companies, is increasingly the target of climate litigation. Specifically, it establishes a legal precedent that it’s not really possible to put a number on one entity’s contribution to climate change. But nuances in the court’s judgment could lay legal snares for Shell further down the road.

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One of the difficulties with global warming from a legal perspective is that it’s, well, global. One single entity isn’t the sole cause, and Shell successfully appealed the 2021 decision by arguing that the size of its role could not be calculated; and besides if it were forced to reduce its emissions, other fossil fuel producers would simply step in to meet any left-behind demand. Dr Fergus Green, Associate Professor of Political Science at University College London, said the court’s decision will have global repercussions.

While the ruling was undoubtedly good for Shell — which this summer backtracked on previous commitments to cut oil production and is enjoying a relatively breezy year compared with its oil-drilling peers — the court’s decision wasn’t an unmitigated win: 

• “Although the decision may at first glance appear like a setback for climate litigation, it reaffirms the key finding of the first instance judgment that the obligation to reduce greenhouse gas emissions in line with the Paris Agreement is not only an obligation for states but for private businesses as well,” Laurence Doering, managing associate in the impact department of the law firm Mishcon de Reya, told The Daily Upside.
• Green highlighted that the ruling found companies’ contribution to climate change can be viewed not only in terms of their activities, but also their investments. On top of this, the court affirmed that protection from climate change is a human right, a trend in climate litigation cases that raises the stakes for defendants such as Shell.

Empty Shell Victory: Maurits Dolmans, a senior counsel at law firm Cleary Gottlieb Steen & Hamilton who specializes in climate litigation, also posted on LinkedIn that Shell’s was a “Pyrrhic victory.” In an email to The Daily Upside, Dolmans said the biggest fly in the ointment is the fact that: “The court strongly hinted that Shell must not explore and develop new fields for which there is no carbon budget.” According to Dolmans, the court couldn’t base judgment on that part of its findings because the plaintiff, an NGO, had not made it part of the original claim — something future litigants may seize on.