The judge in the case ruled that companies "may be obligated to take preventive measures" to counter their emissions, according to a statement from the higher regional court in Hamm.

"If the polluter definitively refuses to do so, it could be determined, even before actual costs are incurred, that the polluter must bear the costs in proportion to their share of the emissions," the court concluded.

The ruling supported arguments made by Saul Luciano Lliuya, who claimed that RWE should pay towards the cost of protecting his hometown of Huaraz from a lake glacier swollen by melting snow and ice.

RWE has never operated in Peru, but the 44-year-old farmer argued that, as one of the world's top emitters of carbon dioxide, the firm was partly responsible for the flood risk.

The court, however, rejected Lliuya's claim against RWE, saying that there was "no concrete danger to his property" from a potential flood.

The ruling was nonetheless a "milestone" for climate litigation, Lliuya's lawyer Roda Verheyen said in a statement.

"For the first time in history, a higher court in Europe has ruled that large emitters can be held responsible for the consequences of their greenhouse gas emissions," Verheyen said.

The outcome of the case would "give a tailwind to climate lawsuits against fossil fuel companies, and thus to the move away from fossil fuels worldwide", she added.

- 10-year legal fight -

In a statement responding to the ruling, RWE said that it had "always operated its plants in compliance with applicable law".

"It would be an irreconcilable contradiction if the state permitted CO2 emissions, regulated them in detail and in some instances even required them, but at the same time retroactively imposed civil liability for them," RWE said.

Lliuya first filed a lawsuit in 2015 at a court in the western city of Essen, where RWE has its headquarters, demanding 17,000 euros ($18,400) towards flood defences for his community.

The Essen court dismissed the case, but in 2017 the higher district court in nearby Hamm allowed an appeal.

Lliuya based his claim on a study that concluded that RWE, which today uses a variety of power sources including wind, coal and gas, has been responsible for 0.38 percent of all global carbon emissions since the start of the industrial era.

Court-appointed expert Rolf Katzenbach told the tribunal in March that there was about a one percent chance of the lake flooding Lliuya's property at some point in the next 30 years, having earlier put it at three percent.

Lukas Arenson, an expert called for Lliuya, said that Katzenbach's estimates relied too much on historical trends and did not adequately factor in the effects of future climate change.

Lliuya's legal team later unsuccessfully applied for Katzenbach's evidence to be struck off on the grounds that he had business dealings with an RWE subsidiary, RWE Nuclear, while appointed to the Lliuya case.

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