Shares in RWE plunged on Germany's DAX index of blue-chip shares following the news, closing down 1.94 percent.
A German court has ruled that it will hear a Peruvian campesino's case against energy giant RWE over climate-change damage in the Andes, a decision campaigners are calling a "historic breakthrough."
Campesino Saul Luciano Lliuya's case against RWE is "well founded," the court in the northwestern city of Hamm said in a statement Thursday. "Even people who act according to the law must be held responsible for the damage they cause to property," the judges said.
Lliuya, a 37-year-old mountain guide, argued that RWE, as one of the world's top emitters of carbon dioxide, must share in the cost of protecting his hometown Huaraz, in the northern Ancash region, from a glacier lake at risk of overflowing from melting snow and ice.
He grounded his claims on a 2013 climate study which found that RWE was responsible for about 0.5 percent of global emissions "since the beginning of industrialization." Another study by the U.S. Agency for International Development (USAID) said in 2014 that the lake was so swollen it has become a permanent threat.
RWE's power plants emitted carbon dioxide that contributed to global warming, increasing local temperatures in the Andes and putting the father of two's property at risk from flooding or landslides, according to the campesino.
He is demanding that RWE pay about US$20,000 in order to fund mechanisms that would protect his community from floods, plus the US$7,600 he has already spent on protective measures.
Now the court must decide whether "the accused's contribution to the chain of events depicted here is measurable and calculable," the judges said, noting they will appoint experts to evaluate the claim in cooperation with both plaintiff and defendant. Meanwhile, Lliuya will pay more than US$20,000 in fees up front.
"This is a major success not just for me, but for the people of Huaraz and everywhere in the world threatened by climate risks," Lliuya said in a statement issued by the foundation Germanwatch. The decision to hear the case represents a "historic breakthrough with global relevance," commented the organization.
A lower court in the German city of Essen, where RWE is based, initially found that the lawsuit against the energy giant was unfounded.
An RWE spokesman has warned that RWE will appeal any ruling against it to Germany's highest court.