Royal Dutch Shell has lost a landmark legal case, with a Dutch court ordering the oil company to increase its emissions cuts in a ruling that could set a global precedent for corporate polluters.

Judge Larisa Alwin of the district court in The Hague ordered Shell to ensure its net carbon emissions were 45 per cent lower in 2030 than in 2019, a ruling she said would have “far-reaching consequences” for the Anglo-Dutch company.

Alwin said Shell’s existing climate strategy was not concrete enough and added there was a human rights obligation on the company to take further action.

The ruling followed a legal campaign led by Milieudefensie, the Dutch wing of Friends of the Earth. Donald Pols, director of Friends of the Earth Netherlands, described the decision as “a monumental victory”.

Shell said it would “appeal today’s disappointing court decision”.

The ruling could set a precedent for similar cases against the world’s biggest corporate polluters, which may now face similar lawsuits.

“Legally, economically and societally the ruling is significant,” said Thom Wetzer, who leads the sustainable law programme at Oxford university. “All companies in the energy industry and all heavy emitters will be put on notice and will have to accelerate their decarbonisation plans.”

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Shell has announced cuts in the carbon intensity of the fossil fuels it produces and sells when compared with compared with 2016 levels, starting with 6 per cent by 2023, 20 per cent by 2030 and 45 per cent by 2035.

The targets are part of its ambition to become a net zero emissions business by 2050. Carbon intensity is a measurement of carbon per megajoule of energy sold, rather than an absolute measure of carbon emitted.

Alwin said her decision would require “a change of policy” from the company that could “curb the potential growth of the Shell group”.

“The interest served with the reduction obligation outweighs the Shell group’s commercial interests,” she added.

Climate litigation against fossil fuel companies has gained momentum in recent years. Until recently cases tended to be focused on liability suits, with corporations asked to pay damages for past behaviour.

But the legal case against Shell is among a growing number of so-called human rights-based cases, which aim to radically change a company’s strategy and potentially disrupt its business model.

Shell’s share price remained steady on the news.

However, Nick Stansbury at Legal and General Investment Management, said that “while the market does not appear to have responded, there is a valid question about whether this is a watershed moment in the same way the first Big Tobacco legal suits were”.

While rival BP has set targets for a reduction in fossil fuel production, Shell has refused to take similar steps, saying such moves would be arbitrary and fail to take into account the robust demand for hydrocarbons.

Although it has said it will invest billions of dollars in low-carbon energy, including electric vehicle charging, hydrogen, renewables and biofuels, it has stressed it will only move “in step with society”.

In response to this point, the judge said in her ruling that the energy group “must do more than monitoring developments in society and complying with the regulations in the countries where the Shell group operates”.

While she acknowledged that Shell “cannot solve this global problem on its own”, she said this did not “absolve” the company of its responsibility to curb the emissions “it can control and influence”.

The judge added that Shell “has total freedom to comply with its reduction obligation as it sees fit”.

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