who is responsible for emissions?

• Judith van de Hulsbeek

  editor Climate and Energy

• Rob Koster

  Economics reporter

Can you make companies responsible for the emissions caused by the use of their products? And is it up to the judge to do that? These are the most important questions in the long-awaited appeal of ‘the Shell climate case’, which starts today.

Three years ago, the judge ruled that Shell must reduce its emissions by 45 percent by 2030. This concerns the company’s own emissions, but the judge requires them to make “maximum efforts” to significantly reduce their customers’ emissions. , even if they would lose out on a lot of money as a result. Shell hopes that the court will reverse or weaken the verdict.

The case was filed in 2019 by Milieudefensie. Their arguments: Shell is a major player in the fuel market with annual global emissions greater than many countries. The company has known for a long time that CO2 is the main cause of climate change, but their climate plans to reduce emissions are inadequate and vague and should be more ambitious, the action group believes. To the surprise of many, the Hague judge largely agreed with Milieudefensie: it is part of Shell’s ‘duty of care’ to limit emissions more quickly.

This duty of care will again play an important role in the appeal. It is an unwritten standard, which is reflected, among other things, in the so-called cellar hatch ruling from 1965. In short, the Supreme Court determined that the person who opens a cellar hatch (in this case a Coca-Cola employee) is responsible. for the danger this poses to passers-by (someone had fallen through the hatch into the cellar). According to this reasoning, Shell would also be responsible for the consequences of emissions and should take measures against them.

But Shell does not agree with this. They endorse Milieudefensie’s point that action must be taken against climate change. However, according to the company, this is not a matter for the court, but for the government.

We do not believe that a court ruling against one company is the right solution for the transition to cleaner energy,

“We do not believe that a court ruling against one company is the right solution for the transition to cleaner energy,” said Frans Everts, CEO of Shell Netherlands. The core of their defense is that they already comply with all environmental and climate legislation.

According to Everts, the verdict is “ineffective and even counterproductive” in tackling climate change. According to Shell, it will only lead to its market share being taken over by other oil companies, as long as customer demand does not decrease.

Both former CEO Ben van Beurden and his successor Wael Sawan see the recent energy crisis as proof of their point: a decrease in supply without a decrease in demand leads to unacceptably high prices for consumers.

Milieudefensie is confident that the court will confirm the verdict. “The factual base has only continued to grow, and no scientific step has been taken backwards anywhere,” says director Donald Pols. The action group has submitted 650 additional pieces of evidence, updates on climate science and new expert statements for this appeal. “Eight people worked full-time on it,” says Pols.

Shell has also put a significantly larger team on the case this time. The company was so surprised and dismayed by the judge’s ruling in 2021 that the renowned law firm De Brauw Blackstone Westbroek was evicted. Shell’s in-house lawyer has been exchanged for the British law firm Clifford Chance for the appeal.

Milieudefensie is critical of the green plans Shell has developed since the first verdict. The company recently announced that it will be lowering its target for reducing CO2 emissions by 2030.

The hard target of a 20 percent reduction in emissions was adjusted to 15 to 20 percent fewer emissions. Oil production will remain at the same level for the time being and gas production will even be significantly expanded. However, CEO Sawan maintains his promise that his company’s emissions will be net zero by 2050.

Only a small portion of Shell’s emissions come from its platforms, refineries and chemical plants. The vast majority (95 percent) is caused by customers: motorists and truck drivers who run on petrol and diesel, airplanes that refuel with kerosene.

Two weeks ago, Shell formulated an ambition for the first time to reduce emissions by 15 to 20 percent by 2030. The oil giant is focusing, among other things, on the production of biodiesel and biokerosene with the construction of a new bio-refinery in Pernis.

The appeal is being followed with excitement around the world. The case is unique, says Elbert de Jong, professor of private law at Utrecht University. “All kinds of new exciting legal issues are being raised: can you indeed apply the unwritten due care standard to companies’ emissions? Do companies have to comply with climate agreements and human rights treaties? What is the role of the judge?”

Professor of European law Christina Eckes from the University of Amsterdam is also following the case closely. “Whatever ruling the court makes, it will have far-reaching consequences, both for Shell and for other companies,” she says.

Both she and De Jong do not expect the court to take a radically different route and rule that companies have no duty of care. “It is exciting how far that duty of care extends,” says Eckes. According to her, the court is taking the matter very seriously. “Four days of hearings have been scheduled, which is significant.”