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On Tuesday, November 12, 2024, the Hague Appeals Court overturned a landmark 2021 decision ordering oil giant Shell to reduce its greenhouse gas emissions 45% from 2019 levels by 2030.

While the court acknowledged that Shell is obliged to reduce its emissions – given that “protection against global warming is a basic human right” – it agreed with Shell that imposing an emissions target could have adverse effects, including potentially causing some customers to use coal, which would be ever worse in terms of emissions. The court further held there was “no solid basis” for the 45% target imposed by the lower court, finding that “a civil court cannot determine to what reduction target Shell should be held” given available scientific data.

The rulings comes at a time when the Dutch oil giant is on-trend with various other international corporations whose climate and sustainability commitments have been backsliding of late. For example, it watered down near-term emission reduction goals in its March 2024 strategy update. It is therefore difficult to imagine that absent specific, legally-binding targets Shell will take the court’s admonitions about its “special responsibility” to cut CO2 emissions seriously.

However, some climate advocates believe that the appeal court’s decision - though disappointing - nevertheless affirms various important principles that could serve as the basis for future claims against big polluters. These principles established that:

• The obligation to reduce emissions in line with the Paris climate agreement is not limited to countries, as companies also bear that responsibility;

• In principle, a court can order companies to meet absolute emissions reduction goal, provided scientific research advances sufficiently to set specific actionable targets; and

• Corporations have responsibilities when it comes to human rights protection, including in the context of climate change.

Further, according to Thom Wetzer, an associate professor of law and finance at the University of Oxford, the court’s assessment of Shell’s oil and gas development plans as potentially “at odds” with the fact that it is “reasonable to expect oil and gas companies to take into account negative consequences of a further expansion of the supply of fossil fuels,” aligns with the argument that such expansionist projects are “fundamentally at odds with the Paris agreement.”

The critique may inspire more cases against specific fossil fuel development projects or investments, which could pave the way for judges to demand climate impact assessments before regulatory approvals are issued.

Please contact our firm at 647-725-4308 or info@greeneconomylaw.com for legal assistance in connection with climate policy or green business matters.