Jeroen van der Veer said in a statement the European Union's plans to put a price on carbon credits could damage the European energy industry.
Shell's chief executive said charging polluters for carbon credits, which were previously distributed for free under the European Union's carbon trading system, could stifle the refining industry across the entire continent.
As part of its efforts to meet its 20 percent emissions reduction by 2020, the EU is seeking to enact a plan to sell carbon credits to the energy industry.
The refining industry's position on the oil industry ladder has dropped in the last 20 years, and refiners have also been slapped with higher taxes, van der Veer said, adding new penalties would cripple refiners.
Van der Veer's comments have also been echoed by other refining leaders who have said they will relocate to escape such a regime.