The Appeals Court ruling, which shocked environmental groups including Milieudefensie who steered the case, reverses a landmark decision three years ago.

Back then, a lower Dutch court ruled that Shell must reduce its carbon emissions by 45 percent by 2030, as it was contributing to the "dire" effects of climate change.

Both Shell and environment groups appealed, with Shell appealing the ruling itself and climate activists saying the oil giant was not implementing the ruling.

But on Tuesday, appeals court judge Carla Joustra said: "The court's final judgement is that Milieudefensie's claims cannot be granted. The Appeals Court is therefore quashing the original judgement."

The ruling at the Hague Appeals Court comes as governments of some 200 countries gather at the COP29 talks in Azerbaijan to discuss climate action, including a transition to clean energy.

The 2021 ruling was seen as a historic victory for climate change campaigners including Milieudefensie -- the Dutch branch of Friends of the Earth -- and six other groups who brought the case.

It was also the first time a company had been made to align its policy with the 2015 Paris climate change accords.

Appeals judges however disagreed with climate groups, saying "Shell is already doing what is expected" of them.

"Shell must make an appropriate contribution to the climate objectives of the Paris Agreement," Joustra said.

"However, the existing climate legislation does not provide for a specific reduction percentage for individual companies," the judge said.

She added that even though Shell "as a major oil and gas company" had an obligation to curb climate change "largely caused by companies in industrialised countries...it did not mean that the court can apply the general standard of 45 percent to Shell."

- 'Pivotal point' -

Milieudefensie reacted with disappointment. "This (judgement) hurts," Milieudefensie director Donald Pols said. "We will continue to tackle major polluters, such as Shell," Pols said.

Shell, which has called litigation "ineffective" to address climate change, welcomed the ruling

"We do not believe that a court decision against a company is the right solution for the energy transition," the group said on its website.

"We are pleased with the court's decision, which we believe is the right one for the global energy transition, the Netherlands and our company," said Shell chief executive Wael Sawan saids in a separate statement.

Tuesday's ruling follows four days of hearings in April, during which Shell and environmental groups put forth their arguments before the judges.

"This judgement could be a pivotal point for the climate," Milieudefensie said on its website ahead of the case.

"For years we've put pressure on Shell and other large-scale polluters who are doing too little for the climate."

"If they don't take action, we won't be able to stop climate change," Milieudefensie said.

Shell has said it was investing some "10 to 15 billion dollars between 2023-25 in low-carbon energy solutions," representing 23 percent of its total capital expenditure.

The 2015 Paris accords committed all nations to cut carbon emissions to limit warming to two degrees Celsius (3.6 Fahrenheit) above pre-industrial levels and encouraged them to aim for 1.5 degrees.

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