Environmental groups have sued major German companies to reduce CO2 emissions from their products | Skadden, Arps, Slate, Meagher & Flom LLP

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  • Environmental groups have sued four major German companies, seeking to modify their products and operations to comply with climate targets far stricter than those set by German law.
  • The cases stem in part from a ruling last year by Germany’s Federal Constitutional Court, which declared a major environmental law partly unconstitutional, saying its short-term emissions were too lax, thereby limiting the options of future generations to fight climate change.
  • By asking courts to impose plaintiffs’ detailed environmental requirements on companies, lawsuits present significant separation of powers issues.
  • The plaintiffs face serious hurdles proving that the defendants have contributed significantly to harm and are able to alter the aggregate emissions of others.

Current environmental combinations: from BMW to Wintershall

Members of environmental groups filed numerous lawsuits last year seeking to set deadlines for companies to cease operations that indirectly or directly create greenhouse gases. In September 2021, members of the German non-governmental organization (NGO) Deutsche Umwelthilfe (Environmental Action Germany) filed suit against BMW and Mercedes, and in November Greenpeace filed suit against Volkswagen. All lawsuits ask courts to order automakers to halt global sales of internal combustion engine cars by 2030 and, in the meantime, only sell cars that emit up to certain levels of CO2. Deutsche Umwelthilfe has also sued Wintershall Dea, a gas and oil producer, to ban it from developing new gas and oil fields after 2026. The NGOs aim to use German courts to impose new obligations on domestic companies linked to the climate change, even though the defendants have complied with German law.

These lawsuits differ from another ongoing climate change litigation: a Peruvian farmer’s lawsuit against German utility RWE seeking damages to cover the cost of building a dam to protect his home from potential flooding of a glacial lake. He argues that RWE should bear 0.47% of its construction costs as this would correspond to RWE’s share of global greenhouse gas emissions since industrialization began.

The Federal Constitutional Court laid the groundwork for private climate lawsuits

A Dutch court ruling in 2021 ordering Royal Dutch Shell to reduce CO2 emissions was a model for the German cases. However, the German lawsuits draw directly on a March 2021 ruling by Germany’s Federal Constitutional Court which declared parts of the Federal Climate Change Act (the Act) unconstitutional on the grounds that its emissions standards did not protect not adequately the rights of future generations. Climate lawsuits are trying to apply this ruling to private civil lawsuits against companies.

The court used the CO2 budget approach followed by the United Nations Intergovernmental Panel on Climate Change and the German Environmental Advisory Council, which caps CO2 contributions over time according to the maximum allowable temperature threshold of the Paris climate agreements. The tribunal concluded that the national residual budget of 6.7 gigatonnes remaining in 2020 will be almost completely exhausted by 2030 at the rate of emissions allowed by law. On this basis, the court expressed serious concerns about the constitutionality of the CO2 emissions allowed until 2030 because they allowed too much CO2 to be issued during this decade, creating an irreversible threat that would restrict the constitutionally protected freedoms of future generations. The court only refrained from constitutionally ruling on the effectiveness of the law’s requirements for this delay due to the uncertainties inherent in the calculation of the residual budget, but it expressly reserved the right to demand even more severe reductions. of the legislator.

The court concluded that the CO2 cuts after 2030 were insufficiently regulated by law and therefore unconstitutional. In response to the decision, lawmakers have completely strengthened the Climate Protection Act.

Prosecutions can conflict with the separation of powers

The claims of Deutsche Umwelthilfe and Greenpeace are based on the emissions budget approach applied by the court. The applicants calculated a residual CO2 budget for German car manufacturers.

However, by asking the courts to order selected companies to restrict their sales or other activities, the lawsuits raise serious separation of powers issues. If the legislation to combat climate change proves to be insufficient, it is up to the legislator to modify it.

In fact, a judgment of the Federal Constitutional Court in a similar situation cited the separation of powers. Given the far-reaching effects of nuclear energy on citizens, nuclear energy policy is a fundamental issue that can only be addressed by lawmakers, the court said. The same must be true for the weighing of constitutional rights in the context of the fight against climate change.

Proving causation and defendants’ control over harm can be a challenge

Environmental lawsuits will also likely struggle to satisfy basic civil law principles, and causation, in particular.

The cases against BMW, Mercedes, Volkswagen and Wintershall Dea, like the lawsuit against RWE, are based on civil law protections of absolute rights such as life, property, health and privacy. German law requires the person against whom the claim is asserted to be a “disturber” (Store). In current cases, this can only be a person who (a) sufficiently causes the nuisance directly or – in the case of vehicle emissions – indirectly through third parties and (b) is able to prevent such disturbances.

Applicants must demonstrate that, without the contribution of these companies, the threatened disruption would not exist.

Given the amount of global emissions, the defendants’ relatively tiny contributions to total emissions, as well as other factors such as CO storage2it is debatable whether the plaintiffs can prove the existence of a causal link.

The second aspect, the controllability of the nuisance, is also highly debatable here. For example, car manufacturers are unable to control the emissions of vehicles already sold. It is only in the power of car owners. Moreover, imposing restrictions on the three defendant automakers might simply incentivize consumers to buy from other automakers.

Finally, the applicants’ calculations do not take into account the effects of a disproportionate amount of CO2 savings in other sectors, as they cannot predict technical progress in reducing CO emissions2 many years in the future. In addition, the calculation is based on a fixed allocation of CO2 budget to various industries.

Prospects of potential litigation

Deutsche Umwelthilfe said it selected the defendants because (a) they are among Germany’s largest companies, (b) they are globally active, and (c) they allegedly provided no (or sufficient) statement. on how they intend to adapt their activities to adequately protect the climate and the constitutional rights of individuals.

Environmental lawsuits filed to date focus on the transportation sector, which undoubtedly causes CO2 large-scale broadcasts. However, according to the German Federal Ministry of the Environment, the contribution of transport is significantly lower than that of energy and industry, and the construction sector contributes almost as much as transport. This suggests that large Germany-based companies in these other sectors – as well as the banks that finance them – could soon find themselves facing similar lawsuits.

See “Climate-related security lawsuits could increase with new SEC standards.”

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