Something profoundly discomfiting for the global energy sector recently happened in the Netherlands. The global oil sector might think it is pulling out all the stops to keep multiple plates spinning (keeping a predominantly oil-reliant world still energised and moving, while investing in and developing alternative sources of energy, and cutting carbon emissions in line with the target of carbon net-zero by 2050), but influential voices think otherwise. On Wednesday, a Dutch district court in the Hague ruled in favour of a suit brought in a class action led by Milieudefensie, the Dutch wing of Friends of the Earth, that Royal Dutch Shell was in breach of its duty to meet global temperature targets and ordered the company to cut its carbon emissions by 45% by 2030 compared with 2019 levels.

The company’s strategic plan seemed clear and, on the face of it ambitious, not only to be carbon net-zero, but for the products it sells to have no CO2 emissions at all by 2050: its pathway published in February laid out product carbon reductions of 6-8% by 2023, 20% by 2030, 45% by 2035 and 100% by 2050. However, as reported in The Guardian, arguing under Dutch law and European Human Rights Convention articles covering activities which endanger life that, while the company had done nothing illegal, the court ruled that the company’s “policy intentions and ambitions for the Shell group largely amount to rather intangible, undefined and non-binding plans for the long-term”. Further, it found those plans were “dependent on the pace at which global society moves towards the climate goals of the Paris agreement” and that the “emissions reduction targets for 2030 are lacking completely”. In other words, the court effectively accused the company of hiding behind the Paris Climate Accord timetable, whose limits and timetable are themselves legally binding, to dawdle wilfully, to kick the can down the road.

Whether one agrees with the Paris Climate Accord or not is irrelevant: it’s there, in law, and many signatories including the UK have already enacted national legislation with carbon reduction milestones to be achieved for the overall obligation to be met by 2050. However, as we have discussed in these columns before, there are profound disagreements behind what is superficially a simple and clear objective. What is the definition of ‘net zero’? What is an acceptable way for it to be achieved? What are acceptable alternatives to carbon? Some baulk at the concept of net-zero, as to them nothing less than the total elimination of carbon is acceptable. The arguments go on. And now, a lower court rules that notwithstanding Shell’s target not only meets but possibly exceeds the internationally agreed net-zero by 2050, it’s not good enough.

In many ways this case encapsulates the accelerating shambles created by the political tensions arising out of the climate agenda with all its competing and vocal forces. But it is against this backdrop that major global businesses, ones such as Shell which currently make the world go round, must make detailed long-term calculations involving complex planning and implementation and the investment of billions, if not in aggregate trillions of dollars.

Does this case set a precedent? Is every company’s climate plan now to be scrutinised in court simply because protest groups disagree with it? The Shell board might well be entitled to say to the court in the Hague, “our plan is clear. It not only complies with meeting an international treaty, it may even exceed it; you might not agree with how we’re going about it but that’s only your opinion. Just who is running this company? Friends of the Earth? A local Dutch judge? Or us”. Shell will appeal.