Shell looks set to dramatically shrink its oil and gas business, after its CEO Ben van Beurden said Wednesday that the company will look for ways to cut emissions and accelerate an energy transition.
The comments come after a landmark ruling in a Dutch court last month.
Shell plans to appeal the ruling that ordered it to reduce greenhouse gas emissions by 45% by 2030 from 2019 levels, which is significantly faster than its current plans.
But van Beurden said the court ruling applies immediately and cannot be suspended before the appeal.
Earlier this year, Shell set out one of the sector's most ambitious climate strategies.
It has a target to cut the carbon intensity of its products by 20% by 2030, by 45% by 2035 and by 100% by 2050 from 2016 levels.
The court ruling called on Shell to cut its absolute carbon emissions, a move van Beurden had previously rejected.
He said that would force Shell to scale back its oil and gas business, which accounts for the vast majority of its revenue.
Analysts have said the ruling could lead to a 12% decline in the company's energy output, including a sharp drop in oil and gas sales.
Shell, which is the world's top oil and gas trader, has said its carbon emissions peaked in 2018, while its oil output peaked in 2019 and was set to drop by 1% to 2% per year.
The ruling by the court in The Hague could trigger action against energy companies around the world.