A German court has thrown out a Peruvian farmer’s lawsuit seeking damages from RWE for the German energy utility’s alleged role in putting his hometown at risk through climate change, but set a potentially important precedent on polluters’ liability for their carbon emissions.

The higher regional court in the western city of Hamm on Wednesday blocked the landmark complaint brought by Saul Luciano Lliuya, 44, who argued that RWE’s historical emissions meant it was responsible for the higher flood risk caused by the melting of the Andean glaciers his hometown was facing.

But 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 court.

“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 near the city of Huaraz in northern Peru from a lake glacier swollen by melting snow and ice.