Explainer: What the Dutch court carbon emissions ruling means for Shell

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Shell said it was “disappointed” by the ruling which it plans to appeal.

Here are some key points about the ruling: * WHAT WAS THE RULING?The district court ordered Shell tocut its absolute carbon emissions by 45% by 2030 compared to2019 levels. Shell currently aims to reduce the carbon intensityof products it sells by 20% over the same period from a 2016baseline. * DOES THE RULING AFFECT SHELL’S GLOBAL OPERATIONS?Yes. Thereduction relates to Shell’s global operations and is notlimited to the Netherlands, the court ruling said. * WHAT DOES IT MEAN FOR SHELL?The ruling said that “it is upto RDS (Royal Dutch Shell) to design the reduction obligation,taking account of its current obligations and other relevantcircumstances.”Shell earlier this year announced a strategy tobecome a net zero emissions company by 2050, meaning itsabsolute emissions will also be net zero at that point. It hasstated that it believes its emissions peaked in 2018. * ABSOLUTE TARGETS VS INTENSITY TARGETS?The court orderedShell to reduce absolute emissions by 45%. Shell’s short andmedium-term targets are intensity based. Intensity-based targetsmeasure the amount of greenhouse gas emissions per unit ofenergy produced. That means that absolute emissions can risewith growing production, even if the headline intensity metricfalls.At its annual general meeting this month, Shell CEO Benvan Beurden rejected setting absolute reduction targets, saying:”Reducing absolute emissions at this point in time ispredominantly possible by shrinking the business.” * HOW BIG ARE SHELL’S GREENHOUSE GAS EMISSIONS?Shell, theworld’s largest oil and gas trader, produced 1.38 billion tonnesof CO2 in 2020, roughly 4.5% of global energy-related emissionsthat year, based on International Energy Agency figures https://www.iea.org/articles/global-energy-review-co2-emissions-in-2020.Shell’s 2020 emissions were down from 1.65 billion tonnes theprevious year, largely as a result of a fall in oil and gasdemand due to the coronavirus pandemic.