Shell has been threatened with another round of legal action in the Netherlands for continuing to develop oil and gas projects around the world.
In a letter sent to Shell today, NGO Milieudefensie accuses the company of breaching its legal duty of care under Dutch law by not dramatically reducing its investments in fossil fuels and not putting in place what it considers an adequate climate strategy for the coming decades.
It plans to take Shell to court if these issues are not addressed.
“We as a society can no longer accept that a company like Shell determines our future without us having any say in it,” says Milieudefensie director Donald Pols.
The action builds on another lawsuit that Milieudefensie – the Dutch arm of Friends of the Earth – is still embroiled in with Shell over its climate targets up to 2030.
Shell has a ‘special responsibility’
Last year, Shell managed to overturn a landmark climate judgment by a Dutch court, which in 2021 had ordered it to reduce its greenhouse gas emissions by 45 per cent by the end of the decade. It had been the first such ruling against a company in the world.
Milieudefensie appealed and the case is now at the Dutch Supreme Court.
But although the appeal court refused to set a specific legal climate goal it did rule that Shell has a “special responsibility” to cut its emissions as a big oil company.
And it said it was “reasonable to expect oil and gas companies to take into account the negative consequences of a further expansion of the supply of fossil fuels for the energy transition also when investing in the production of fossil fuels. Shell’s planned investments in new oil and gas fields may be at odds with this.”
Milieudefensie is seizing on this statement to justify its latest legal threat. It notes that, despite increasing its volume of renewables, Shell is still planning to develop hundreds of new oil and gas fields.
The company has projects already under construction in North America, the Middle East and Africa and, according to a new report by Milieudefensie and Global Witness, it owns or partly owns another 700 undeveloped assets.
In a report to investors in March, Shell said it planned to increase production and sales of fossil fuels until well into the 2030s.
The International Energy Agency has warned against investments in any new fossil fuel extraction to enable a transition to a clean energy system, and stressed that companies should not wait for a drop in demand to reduce their supply.
Pols said legal action was the only way to make this happen: “Shell will not stop of its own accord.”
What’s next for Milieudefensie vs Shell?
Milieudefensie plans to ask the court to order Shell to stop investing in new oil and gas fields.
And it wants the company to be ordered to set greenhouse gas emission targets for the years after 2030 in line with the Paris Agreement goal of keeping global temperature rise under 1.5C.
Shell has been approached for comment.
However the NGO faces legal roadblocks in pursuing this case. After the 2021 court ruling, Shell moved its headquarters from The Hague to the UK. And it could be difficult for Dutch courts to enforce an order for Shell’s legal development activities outside the Netherlands.
Roger Cox, lawyer for Milieudefensie, said he was confident Dutch courts would have jurisdiction because Shell is registered in the Netherlands and harm is being caused to Dutch society.
And he said a ruling in Milieudefensie’s favour could be implemented through enforcement treaties with other countries around the world.
“It doesn’t matter where Shell is,” says Cox. “The international assets of Shell – be they fossil assets, bank accounts, whatever – will give us a lot more grip on their equity.”
Sjoukje van Oosterhout, head of research at Milieudefensie, says a positive ruling in this case would have big repercussions for Shell but would also give a “very clear signal” to governments, financial institutions and insurance companies.
“The impact of this case could really be enormous.”
