Shell ordered to deepen carbon cuts in landmark Dutch climate case

A Dutch court has ordered Royal Dutch Shell to drastically deepen planned greenhouse gas emissions, in a landmark ruling that could trigger legal action against energy companies around the world.

Shell said it was “disappointed” and plans to appeal the ruling, which comes amid rising pressure on energy companies from investors, activists and governments to shift away from fossil fuels and rapidly ramp up investment in renewables.

Judge Larisa Alwin read out a ruling at a court room in The Hague, ordering Shell (RDSa.L) to reduce its planet warming carbon emissions by 45% by 2030 from 2019 levels.

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Warning North Sea clean-up costs could spiral

The Oil and Gas Authority published a new decommissioning strategy in which it warns that bills could spiral if action is not taken to improve commercial practices.

The OGA has set a target to reduce the expected costs of decommissioning by £20.7bn by 2022, from the £59.7bn total expected in 2017.

The regulator highlighted the problems caused by lack of collaboration in the North Sea, in which many firms have stakes in fields. These have been compounded by the swings in oil and gas prices triggered by the coronavirus crisis, which have made it harder for firms to develop long-term decommissioning strategies.

The strategy report found the expected cost of decommissioning assets included in the 2017 forecast had fallen to £48bn in 2020. When assets developed since 2017 were included the estimated cost increased to £51bn.

Royal Dutch Shell revealed last month that it was repaid $99 m by the UK Government last year. The costs of decommissioning the huge Brent field more than offset the profits the company made on its North Sea output.

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