Energy Report: It's Back

Despite a landmark decision by a Dutch court that Shell (RDS-A) has to reduce its carbon footprint and environmentalists getting on Exxon Mobil's (XOM) board, demand for fossil fuels is on track to exceed pre-COVID levels on a path to new records.

The Investors Business Daily reported that Exxon's meeting, activist investor Engine No. 1 gained ground in its fight to get the U.S. oil major to take a more proactive approach to climate change, which it believes will have major ramifications for Exxon stock. In particular, it wants Exxon to pledge to reduce its emissions to net-zero by 2050 and wants to replace four board members with its candidates. Greg Goff, ex CEO of refiner Andeavor, and environmental scientist Kaisa Hietala will now join the board. While Engine No. 1 won two seats on the board, votes on the other two are too close to call. Exxon recessed the meeting to extend voting to avoid a loss. But Darren Woods was re-elected CEO, though he likely will face more pressure to act on a climate-change agenda. 

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Image Source: Unsplash

Reuters laid out the Shell decision. They reported that a Dutch court on Wednesday ordered Royal Dutch Shell (RDS-A) to significantly deepen planned greenhouse gas emission cuts, in a landmark ruling that could pave the way for legal action against energy companies around the world. 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 to cut its absolute carbon emissions by 45% by 2030 compared to 2019 levels. Shell currently aims to reduce the carbon intensity of products it sells by 20% over the same period from a 2016 baseline.

DOES THE RULING AFFECT SHELL'S GLOBAL OPERATIONS? Yes. The reduction relates to Shell's global operations and is not limited to the Netherlands, the court ruling said.

WHAT DOES IT MEAN FOR SHELL? The ruling said that, "it is up to RDS (Royal Dutch Shell) to design the reduction obligation, taking account of its current obligations and other relevant circumstances." Shell earlier this year announced a strategy to become a net-zero emissions company by 2050, meaning its absolute emissions will also be net-zero at that point. It has stated that it believes its emissions peaked in 2018.

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