Dutch court ordered Shell to reduce its CO2 emissions by 45% from 2019 levels by 2030. This is the first time a judge has ordered a company to comply with the Paris Agreement, which aims to limit global temperature rise to 1.5 degrees Celsius.
Shell was targeting a 20% reduction in the carbon intensity of its business and products by 2030 and 45% by 2035. Carbon intensity refers to the greenhouse gas emissions associated with each unit of energy a company sells.
The Anglo-Dutch company in September announced plans to become a net zero emissions company by 2050, a target that includes 90% of emissions generated from the use of its products.
“But now we will be looking for ways to reduce emissions even further that remain purposeful and profitable. This is likely to mean taking some bold but measured steps in the years to come,” said the Shell CEO on Wednesday.
Legal experts declared the decision as “unprecedented” and said similar cases could be brought against other oil companies, which already face mounting pressure from shareholders and activists to give up fossil fuels. and invest in clean energy sources.
Van Burden said the energy transition was too big for a company to deal with. This will require a global effort.
“We need to work closely with society, governments and our customers to achieve real, meaningful change in the worldwide energy system,” he said.
Shell’s latest investment plan includes pouring between $2 billion and $3 billion annually into renewable energy and hydrogen. And while it believes its oil production is set to peak in 2019, it still plans to invest about $8 billion a year in oil exploration and production.
“For a long time to come, we look forward to continuing to provide energy in the form of oil and gas products to meet customer demand and maintain a financially strong company,” Van Burden said on Wednesday.
If Shell stops selling petrol and diesel overnight, it will drastically reduce its emissions but will not change the demand for the fuel. “Customers will fill up their cars and delivery trucks at other service stations,” Van Burden said.
Shell will work with customers to reduce their emissions and increase demand for low-carbon products, but government policy and regulation is also needed, he said. “Greater collaboration between governments, companies and customers will allow us and others to build our low-carbon energy businesses in the fastest way possible.”