Shell sets out its stall in climate case appeal

The ruling set a precedent and sparked a wave of similar cases by non-profit organisations against multinationals such as oil and gas giants Exxon Mobil and TotalEnergies, and Dutch bank ING.

This week’s appeal is, therefore, seen as a test of corporations’ ability to fend off climate change-related legal action. Shell presented the majority of its case on Wednesday (3 April).

Shell’s argument

In total, Shell had nearly eight hours of pleading time this week spread out over two days.

Shell’s lawyers argued that the court order is ‘unattainable’ and said that there is ‘no legal obligation’ under Dutch or European law which mandates individual companies to reduce emissions by a set amount.

Furthermore, Shell’s chief lawyer, Daan Lunsingh Scheurleer from the London-based law firm Clifford Chance, claimed that the “company has no control over the emissions of its clients.”

While the company, in its 2024 energy strategy, has committed to reducing carbon emissions related to its own operations by 50 percent by 2030, it argues that emissions resulting from its products are not its responsibility.

The two opposing parties appeared in court on Tuesday for the first time since 2021, when Shell lost the lawsuit against Milieudefensie, a Dutch environmental organisation.

After losing the case, Shell replaced Dutch law firm De Brauw Blackstone Westbroek. Choosing a different strategy, Clifford Chance’s legal team is focused on convincing judges that overall emission reduction is the responsibility of governments rather than courts or businesses.

Due to the inherent complexities of managing the energy transition, which Shell lawyer Lunsingh Scheurleer describes as the “energy trilemma” encompassing security of supply, energy affordability, and climate interests, Shell argues governments are responsible for shaping overall climate reduction policies.

Only governments “can establish the rules companies can follow,” said Lunsingh Scheurleer. By taking the matter to court, Milieudefensie undermined “the democratic decision-making of governments,” he added.

Shell’s team also noted that obligating an individual company like Shell to reduce its emissions would not result in lower emissions and could even be “counterproductive in addressing climate change,” according to lawyer Tiemen Drendth.

“If Shell opts to sell parts of its business — whether it is an oil field or a gas station — they don’t disappear but will simply be continued by other businesses,” said Drendth.

The other side

In an initial response, lawyer Roger Cox, representing Milieudefensie, countered by highlighting that multinationals such as Shell have grown immensely powerful to the extent that they have become unmanageable by public authorities — both national and international.

This has resulted in “a governance gap,” he said.

“Shell generates this global influence, among other things, through its ongoing investments in oil and gas, through its political lobbying activities, through its direct access to governments and their ministries,” he said.

Therefore, due to their extensive impact on the functioning of society and democracies through their policies, multinationals such as Shell have the “special responsibility to manage vulnerable societal interests such as the protection of human rights and the environment as responsible stewards,” he said.

“If national governments cannot regulate Shell effectively; and if Shell cannot be regulated internationally; and if Shell does not want to regulate itself adequately; and if the court also does not want to regulate Shell, then we have to conclude that the rule of law is failing,” he said.

“The court is now truly the last bastion,” said Cox.

Milieudefensie will present their full argument on Thursday, with another hearing day scheduled next week.