* Court orders Shell to cut emissions by 45% by 2030
* Such cut would lead to a 12% decline in energy output
* Shell has rejected absolute emission reduction targets
* FACTBOX-Big Oil's climate targets
By Ron Bousso
LONDON, May 27 (Reuters) - A Dutch court ruling ordering
Royal Dutch Shell to speed up its plans to cut
greenhouse gas emissions could lead to a 12% decline in the
company's energy output, including a sharp drop in oil and gas
sales, analysts said on Thursday.
Shell said it was disappointed with the landmark ruling by a
district court in The Hague on Wednesday which it plans to
appeal.
Shell and several of its rivals including BP and Total have
set out plans to sharply reduce emissions by 2050, but have
faced growing pressure from investors to do more to meet
U.N.-backed targets to limit global warming.
The Anglo-Dutch company earlier this year outlined plans to
become a net zero carbon emissions company by 2050, setting
short and medium-term targets to reduce the carbon intensity of
its operations to get there.
Intensity-based targets measure the amount of greenhouse gas
emissions per unit of energy produced. That means that absolute
emissions can rise as long as low-carbon production grows
together with other offsetting measure.
The court ordered Shell to reduce its absolute emissions by
45% between 2019 and 2030, a significantly larger commitment
that Shell's plans to reduce the intensity of its products by
20% between 2016 and 2030.
Shell had previously rejected calls for it to set absolute
emissions reduction targets.
"Reducing absolute emissions at this point in time is
predominantly possible by shrinking the business," CEO Ben van
Beurden said at the annual general meeting this month.
A 45% reduction in absolute emissions would imply a 45% drop
in oil sales, a decline in natural gas sales and a much larger
increase in carbon offsets such as forestation and carbon
capture and storage technologies, according to a Credit Suisse
analysis.
Such a scenario would shrink the size of Shell's business to
around 18.8 exajoules (ej) of energy output, down from 21.3 ej
today, roughly a 12% decline. Under Shell's current plan, its
energy output would grow to 25.8 ej by 2030, according to Credit
Suisse.
Shell's current plan will see its oil output decline by 1%
to 2% per year after peaking in 2019. The company said it plans
to continue exploring for new oil and gas resources until 2025.
Analysts at Royal Bank of Canada estimated that a 45% cut in
absolute emissions would lead to a 30% drop in oil products
sales compared with 2020 and a 3% drop in oil and gas
production.
(Reporting by Ron Bousso; editing by David Evans)
