Strategic retrenchment in the energy transition: Shell Pernis and the emergence of second-order carbon lock-in

Overcoming carbon lock-in is widely seen as essential for enabling energy transitions, yet empirical cases that reveal how incumbent firms respond when lock-in pressures are relaxed are limited. This article examines the case of Shell's Rotterdam Pernis refinery. In this instance, multiple policy, legal, and governance interventions were enacted simultaneously, creating an opportunity to observe incumbent behavior once traditional lock-in conditions were weakened. This situation allows a distinction between first-order carbon lock-in , referring to recognized lock-in mechanisms rooted in a focal techno-institutional context, and second-order carbon lock-in , referring to dormant mechanisms that become activated once first-order constraints are relaxed. In the Pernis case, the weakening of first-order lock-in did not lead to deep decarbonization. Instead, it triggered higher-level systemic forces that remain underexamined in current theory. These forces redirected, delayed, or narrowed the firm's decarbonization trajectory, frustrating energy transition intentions. The findings illustrate how interventions designed to unlock fossil fuel dependence can activate latent forms of inertia that can constrain transition pathways. This insight contributes to understanding the dynamics of carbon lock-in and raises questions for climate policy design in global industries.