Shell to speed up energy transition plan after Dutch court ruling

Royal Dutch Shell will accelerate its plan to cut greenhouse gas emissions after an order by a court in the Netherlands, with the oil major saying it would “rise to the challenge”.

The district court in The Hague ruled last month that Shell must cut its net carbon emissions 45 per cent by 2030 compared with 2019 levels. The order affects the company’s entire global business.

Ben van Beurden, chief executive, said on Wednesday that, as the court’s decision “applies immediately and should not be suspended pending an appeal”, the company would fast-track its plan for the energy transition.

“For Shell, this ruling does not mean a change but rather an acceleration of our strategy,” he said in a post on LinkedIn. “We will seek ways to reduce emissions even further.”

Van Beurden added that this would mean “taking some bold but measured steps over the coming years”, but he did not give any further details.

Judge Larisa Alwin ruled last month that Shell’s existing climate strategy was not concrete enough and that there was a human rights obligation on the company to take further action.

She said the ruling in the case, which was brought by environmental campaigners including Friends of the Earth’s Dutch wing Milieudefensie, would have “far-reaching consequences” for the Anglo-Dutch company but that it was up to Shell how to execute the order.

Shell unveiled plans this year to cut the carbon intensity of the fossil fuels it produces and sells by 6 per cent by 2023, 20 per cent by 2030 and 45 per cent by 2035, compared with 2016 levels.

The targets were part of its ambition to become a net zero emissions business by 2050. Carbon intensity is a measurement of carbon per megajoule of energy sold, rather than an absolute measure of carbon emitted, which is what campaigners have long lobbied for.

While Donald Pols at Milieudefensie described the latest statement as “hopeful and positive”, he said Shell had yet to explicitly acknowledge its compliance with the court’s stipulation of total emissions reductions rather than intensity targets. This, Pols said, was “concerning”.

Van Beurden said he was “disappointed” that Shell was being “singled out” by a ruling he believed did little to reduce global carbon dioxide emissions.

Shell has long maintained that attacking energy producers without a simultaneous push to change consumption habits would be a fruitless endeavour in the drive to tackle climate change.

“Imagine Shell decided to stop selling petrol and diesel today,” said Van Beurden. “This would certainly cut Shell’s carbon emissions. But it would not help the world one bit. Demand for fuel would not change.”

He stuck by the company’s commitment to continue producing fossil fuels, which generate the bulk of the oil major’s cash.

“For a long time to come, we expect to continue providing energy in the form of oil and gas products both to meet customer demand, and to maintain a financially strong company,” he said.

While the majority of Shell’s investors supported its existing energy transition plan at the company’s annual shareholder meeting last month, many are asking for more ambitious targets.

Adam Matthews, at the Church of England Pensions Board, said the latest statement from Shell’s chief was “the right response” and consistent with demands he and others had made about accelerating emissions reductions.

Written by: Anjli Raval

© Financial Times

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