UCL researchers contribute to high-profile climate lawsuit against Shell

A court in the Netherlands has ruled that not only states but also companies, such as Shell, have legal responsibilities to contribute to tackling climate change, including by reducing their greenhouse gas emissions. But the court stopped short of requiring Shell to achieve the specific emissions reduction target sought by NGOs.

The decision was handed down by the Court of Appeal of The Hague on Tuesday 12 November, in response to an appeal by Shell of the decision of the District Court of The Hague in May 2021. The case was brought by a group of NGOs led by Milieudefensie (Friends of the Earth Netherlands) who sought to hold Shell accountable for its alleged inadequate response to the climate crisis. The District Court granted the NGOs’ claim, ordering Shell to reduce its greenhouse gas emissions across all activities by 45% by 2030, relative to 2019 levels.

Importantly, the reduction obligation imposed by the District Court encompassed not only emissions from Shell’s own operations (e.g., methane produced from its extraction of oil and gas) but also the emissions ‘embodied’ in the fossil fuels it sells to customers. The latter category of emissions, known as ‘scope 3 emissions’, are generated downstream of Shell’s own operations but represent the vast bulk of Shell’s causal contribution to the climate crisis.

The Court of Appeal accepted that Shell has a general duty of care to contribute to mitigating climate change under Dutch civil law, which it interpreted in light of international human rights and climate change standards. However, the Court ruled that no specific emission reduction target for a single company could be derived from those international standards.

Associate Professor Fergus Green (UCL Department of Political Science and School of Public Policy) and Professor Steve Pye (UCL Energy Institute) were engaged by Milieudefensie to provide written evidence to the Court of Appeal concerning the effect of the reduction obligation imposed on Shell by the District Court.

In its Statement of Appeal, Shell argued that even if it fulfilled the emissions reduction obligation, there would be no net reduction in global greenhouse gas emissions because the withdrawal of fossil fuels produced and/or sold by Shell would not affect the demand for fossil fuels, which would simply be supplied by other companies. Contrary to this aspect of Shell’s argument, and consistently with expert evidence provided by Dr Green and Professor Pye, the Court accepted that a reduction in Shell’s production may lead to a reduction in net global greenhouse gas emissions.

However, around two-thirds of Shell’s Scope 3 emissions come from oil and gas produced by third-party suppliers and on-sold by Shell. The Court accepted Shell’s claim that the emissions reduction obligation could be achieved by simply ceasing to sell the third-party-produced oil and gas. And it concluded that there was insufficient evidence that this withdrawal from the retail market would meaningfully alter the quantity of greenhouse gases that would result from the produced oil and gas, meaning the reduction obligation would not achieve its intended result.

The case exemplifies the complex factual issues confronting judges, lawyers and litigants in fossil fuel-related climate litigation. To help legal practitioners identify and understand the scholarly evidence relevant to these issues, Dr Green and Professor Pye created the Redline Database with the support of a UCL Grand Challenges grant, which was used by Milieudefensie in preparing for the appeal.

Commenting on the Court of Appeal Decision, Dr Green stated:

“The Court of Appeal has found that companies such as Shell have a civil law duty of care to contribute to mitigating climate change, including by reducing their emissions. This is an important precedent that it is likely to influence how courts interpret open-ended duties of care owed by companies in other jurisdictions, too.

Importantly, the Court expressed the view that for fossil fuel companies like Shell, this responsibility might well extend to restricting their investments in new fossil fuel production projects, and that such production restrictions may contribute to reducing global greenhouse gas emissions. These remarks suggest that future litigation against fossil fuel companies directly targeting their investment and production strategies—at least in the Netherlands—might prove more successful than the claim in the present case, which focused heavily on Shell’s Scope 3 emissions.”

Links

• First Expert Letter coauthored by Dr Green and Professor Pye (October 2022).
• Second Expert Letter coauthored by Dr Green (March 2024).
• Court of Appeal judgement.
• District Court Judgement (2021).
• Associate Professor Fergus Green.
• Professor Steve Pye.
• Redline Database.
• Related research: F. Green, O. Bois von Kursk, G. Muttitt and S. Pye, “No new fossil fuel projects: The norm we need” (2024) Science 384(6699): 954–957.