Key points
- A community group has secured a victory in court that amounts to a critical blow to the fossil fuel industry.
- The Supreme Court has quashed Surrey County Council's decision to grant planning permission for 20 years of oil drilling. The court has ruled that the council breached environmental law owing to its failure to consider the inevitable greenhouse gas emissions from burning the oil (its end use, likely to be in transport). These emissions were indirect effects for the purpose of the Environmental Impact Assessment (EIA) Directive and the EIA Regulations. The council’s decision to take account of only the operational emissions from the process of digging up oil from the ground meant the EIA was defective.
- The landmark case was brought by Sarah Finch on behalf of the Weald Action Group, a collaboration of grassroots groups resisting onshore oil and gas in south-east England. Friends of the Earth supported the case as a legal intervener. The legal challenge brilliantly demonstrates the power of community and grassroots’ action; following 5 years of court proceedings, the Weald Action Group has defeated Surrey County Council, Horse Hill Developments Ltd and the Secretary of State for Levelling Up, Housing and Communities (Michael Gove MP) in court.
- This Supreme Court judgment is likely to be a game changer. It could have ramifications for other proposed fossil fuel projects, such as the Whitehaven coal mine, as well as projects to extract oil from the North Sea. Fossil fuel companies have been fighting tooth and nail to avoid having to report on these downstream emissions when they seek planning permission for their climate-wrecking projects. Tellingly, the promoter of the Whitehaven coal mine, West Cumbria Mining Ltd, intervened in this appeal.
- The Weald Action Group’s victory constitutes a serious blow to the fossil fuel industry and is a boost to everyone resisting fossil fuel projects across the U.K. If developers are now obliged to present the full climate impacts of their projects (instead of just a fraction of those impacts, as has largely happened up until now), then decision-makers may well think twice before granting them planning permission.
- This case is about forcing fossil fuel companies to take responsibility for the climate impacts of their developments. It has succeeded. As Lord Leggatt concluded in his judgment [paragraph 97], “...Wherever GHG [greenhouse gas] emissions occur, they contribute to global warming. This is also why the relevance of GHG emissions caused by a project does not depend on where the combustion takes place. If an activity is carried on which will inevitably result in significant GHG emissions, people who carry on the activity cannot be heard to say: “These emissions are not effects of our activity because they are occurring far away among people of whom we know nothing” [paragraph 97, emphasis added].
Background
In 2012, Surrey County Council granted Horse Hill Developments Ltd planning permission for an exploratory oil well at Horse Hill, Hookwood, Horley, Surrey RH6 0HN – a site 3 km west of Horley and 3.5 km north of Gatwick Airport. In 2017, they granted permission for a sidetrack well and second borehole, and subsequent testing. In 2019, just a few months after they’d passed a motion declaring a climate emergency, the council granted planning permission for an oil development. This development was to include 6 oil wells (including 4 new wells) that would collectively extract up over 3 million tonnes of oil over 20 years.
The EIA Regulations require that where a development is likely to have a significant effect on the environment, an assessment must be carried out of the likely significant effects before a decision on planning permission is made. The EIA for the oil drilling project considered the climate impact from the process of digging up oil from the ground, which was predicted to be around 140,000 tonnes of CO2e. But it did not consider the emissions from the burning of the oil, amounting to more than 10 million tonnes of CO2e.
History of the legal proceedings
Sarah Finch’s legal challenge went before the High Court in November 2020, with Friends of the Earth as the legal intervener. Opposing the case were Surrey County Council, Horse Hill Developments Ltd and the secretary of state. In December 2020, the High Court ruled that the council had acted lawfully, rejecting the arguments made by Ms Finch and Friends of the Earth. The judge concluded that as a matter of law, it would’ve been impossible for the council to have considered these emissions.
Ms Finch appealed, with Friends of the Earth again acting as the legal intervener. The Court of Appeal hearing in November 2021 was before Lord Justice Lewison, Lord Justice Lindblom and Lord Justice Moylan. Unusually, the hearing resulted in a split decision: the majority (Lord Justice Lewison and Lord Justice Lindblom) held that the council had acted lawfully, but there was a strong dissenting judgment from Lord Justice Moylan that it had not.
While the judgment was an improvement in terms of environmental protection, in that the Court of Appeal’s judgment was that decision-makers (ie, the council) were not prohibited from considering end-use emissions from proposed fossil fuel projects (unlike the High Court judge), it left a bizarre outcome in practical terms: that in the context of a climate emergency, local councils and planning authorities could essentially choose whether or not to assess end-use emissions from fossil fuel developments in EIA (subject to this being considered unlawful on public law grounds).
Sarah Finch appealed again, and the hearing before the Supreme Court, the highest court in the country, took place in June 2023 before Lord Kitchin, Lord Sales, Lady Rose, Lord Leggatt and Lord Richards. Friends of the Earth was the first legal intervener. Separate legal interventions were also made by Greenpeace, the Office for Environmental Protection, and the promoter of the Whitehaven coal mine, West Cumbria Mining Ltd. The Office for Environmental Protection was established post-Brexit to act as the independent environmental watchdog in this country for the enforcement of environmental law and to further environmental protection. Notably, this was the first time it had ever intervened in a court case. The significance and potential wider ramifications were further demonstrated by West Cumbria Mining Ltd’s decision to involve itself in the case. Its arguments were rejected by the Supreme Court (see below).
Our case
Friends of the Earth’s case supported Ms Finch’s; that the failure to consider end-use emissions was unlawful, as it breached the requirement to consider the indirect effects of the project, as per the EIA Regulations. Our submissions included that the judgment in the Court of Appeal was incorrect given:
- The purpose of the EIA legislation is to secure a high level of protection for the environment, and the legislation was specifically amended in recent years to factor in climate change far more prominently.
There’s established case law that the EIA Directive (and the EIA Regulations in domestic law) must be interpreted in a broad and purposive way, not narrowly and restrictively. - All the parties in the case agree that the end-use emissions are an inevitable consequence of the Horse Hill development (not just a possible, or even a likely outcome).
- The “intervening steps” justification by the majority in the Court of Appeal – that it was lawful to conclude that the end-use emissions were not indirect effects of the development given that the oil has to go through other processes such as refinement before it’s ultimately burnt – don’t stack up. The EIA Regulations make no reference to intervening steps and there’s no justification for this restrictive interpretation.
- The internally inconsistent reasoning in the majority judgment in the Court of Appeal. For example, accepting that combustion of the oil was inevitable, and quoting the conclusion in the UN Environment Programme’s (UNEP) 2019 report that there’s a causal relationship between fossil fuel production and consumption of fossil fuels. And yet also concluding that decisions after the grant of planning permission for the project would somehow "determine how much of the oil would end up being combusted, and whether the economic demand for it would rise or fall". And relying on that to conclude that Surrey County Council had acted lawfully in omitting to consider the emissions from the burning of the oil.
- That the emphasis placed on the location of the Horse Hill Development to determine what is and isn’t an indirect effect is misplaced.
- That it’s clearly feasible for the end-use emissions to be calculated, given that there’s case law from other countries in which end-use (scope 3) emissions are assessed as part of EIA, and there are established methodologies for doing this. For example, Royal Dutch Shell (RDS) reports on its scope 1, 2 and 3 emissions using the World Resources Institute GHG Protocol, as the court observed in Milieudefensie’s (Friends of the Earth The Netherlands) case against RDS in the Dutch court.
The judgment
The Supreme Court’s judgment was handed down on 20 June 2024. The majority decision of Lord Leggatt, Lady Rose and Lord Kitchen was that Surrey County Council had acted unlawfully; Lord Sales and Lord Richards gave a dissenting judgment. Courts across the country will need to follow the majority decision. In Friends of the Earth’s view, the majority judgment takes a common-sense and logical approach to the interpretation of the EIA regulations.
Environment effects
Lord Leggatt (giving the majority judgment) ruled that the decision to grant planning permission for this project was unlawful as the EIA failed to assess the effect on climate of the combustion of the oil [paragraph 174], and the reasons for disregarding this effect were "demonstrably flawed" [paragraph 111]. The council had only factored in the climate effects which were "directly attributable" to the project: "the scope of the assessment self-evidently did not comply with the legal requirement to assess both direct and indirect effects of the proposed development." [paragraph 101; emphasis added]. However, indirect effects, unlike direct effects, "may occur as a result of a complex pathway involving intermediate activities away from the place where the project is located" [paragraph 102].
Rejecting the arguments made by the council, the developer and the secretary of state, Lord Leggatt concluded that end-use emissions were within the Developer’s control: [103] "The combustion emissions are manifestly not outwith the control of the site operators. They are entirely within their control. If no oil is extracted, no combustion emissions will occur. Conversely, any extraction of oil by the site operators will in due course result in GHG emissions upon its inevitable combustion. It is true that the time and place at which the combustion takes place are not within the control of the site operators. But the effect of the combustion emissions on climate does not depend on when or where the combustion takes place. Those factors are irrelevant to the size and significance of the environmental impact" (emphasis added).
Given these downstream emissions were an inevitable consequence of the development, Lord Leggatt held that this amounted to “the strongest possible form of causal connection - much stronger than is required as a test of causation for most legal purposes” [paragraph 80]. The Supreme Court rejected as "misguided" any suggestion that local planning authorities are unable to address climate change: "I do not accept the premise that it would be wrong for a local planning authority, in deciding whether to grant planning permission, to take into account the fact that the proposed use of the land is one that will contribute to global warming through fossil fuel extraction" [paragraph 150]. That finding is important. The Committee on Climate Change has emphasised the need for climate considerations to be embedded in decision-making within the planning system, and that expansion of fossil fuel production is not in line with Net Zero (June 2023 Progress Report, p 15).
The Supreme Court also rejected another reason that had been put forward by the developer and accepted by the council for the exclusion of the end-use emissions from the EIA: that there were other regimes regulating these downstream emissions and so the EIA did not need to consider them. Lord Leggatt concluded that this was simply wrong, and a "clear legal error" [paragraph 108].
Lord Leggatt held that the Court of Appeal’s judgment in the case of Squire (relied on by Ms Finch in support of her case) supported the proposition that emissions from burning the oil were indirect effects for the purpose of EIA. In Squire, the manure generated from the rearing of chickens was held to be an indirect effect of the poultry-rearing facility for which planning permission was sought. This then was an authority that ‘downstream’ effects can amount to indirect effects for the purpose of EIA. Reliance on Squire in this way was first advanced by Friends of the Earth in our written case at the High Court stage.
Rejection of the lower courts' approaches
The Supreme Court’s majority judgment rejected the reasoning of both the High Court and the Court of Appeal. In relation to the High Court’s finding that end-use emissions were as a matter of law, incapable of being indirect effects for the purpose of EIA given the existence of "intervening steps", Lord Leggatt held: "I cannot accept that the existence of this intermediate process has the legal significance contended for by the developer and attributed to it by the judge. The process of refining crude oil does not alter the basic nature and intended use of the commodity" [paragraph 118].
The Supreme Court also disagreed with the Court of Appeal too, and their finding that it was essentially up to the decision-maker to decide whether or not to factor in end-use emissions from fossil fuel projects in EIA. Lord Leggatt held that "Without any criteria to answer these questions, developers and decision-making authorities are left completely adrift... It would be a recipe for unpredictable, inconsistent and arbitrary decision-making" [paragraph 133; emphasis added].
As well as concluding that the majority judgment’s approach in the Court of Appeal was "intolerably vague", the Supreme Court concluded that it was based on a "false premise", as "The fact that there is a series of intervening stages between the extraction of the oil and the ultimate generation of emissions does not itself provide any rational basis for denying that the two are causally linked" [paragraph 134; emphasis added]. The Court of Appeal had made "an error" in concluding that the quantity of oil that would be combusted would depend on decisions yet to be made downstream, when all the parties agreed that "all the oil would be combusted" [paragraph 135].
Furthermore, it was "also incorrect" to say that volume of emissions produced would be impacted by changes in economic demand; that would affect the price, but it would be "inconsistent with the agreed facts" to claim that economic demand would have any implications on the quantity of the emissions [paragraph 136].
Wider implications
The judgment is clear that it’s perfectly feasible to calculate the scale of end-use emissions, and references guidance on this published by the Institute of Environmental Management and Assessment [paragraph 81].
It also expressly compares the scale of the direct and indirect emissions: 10.6 million tonnes over the lifetime of the project, compared to 140,958 CO2e as declared by the Horse Hill Developers Ltd in the Environmental Statement. Surrey Country Council dismissed the latter effects as "negligible", but Lord Leggatt held that "Had the combustion emissions been included in the assessment, the figure for GHG emissions attributable to the project would have been nearly two orders of magnitude greater and could not have been dismissed as "negligible" in that way" [paragraph 82; emphasis added].
Lord Leggatt expressly rejected the idea that leaving the oil in the ground in one place would lead to a corresponding increase in extraction elsewhere, citing the UNEP’s 2019 Production Gap Report: "based on studies using elasticities of supply and demand from the economics literature, that each barrel of oil left undeveloped in one region will lead to 0.2 to 0.6 barrels not consumed globally over the longer term" [paragraph 2]. This report was first cited in this case in Friends of the Earth’s Court of Appeal submissions.
Lord Leggatt’s judgment also explains the connection and shared history between the Aarhus Convention (an international environmental justice treaty which the UK remains a party to) and the EIA Directive, and how they’ve each influenced the development of the other. The importance of public participation in the EIA process is emphasised, both to afford "early and effective opportunities to express comments and opinions" [paragraph 20] in the interest of democratic legitimacy [paragraph 21], and also to provide the public with information [paragraph 20]; "You can only care about what you know about" [paragraph 21]. Lord Leggatt refers to the objectives of the Aarhus Convention, including (quoting recital 19 to the EIA Directive): "the desire to guarantee rights of public participation in decision-making in environmental matters in order to contribute to the protection of the right to live in an environment which is adequate for personal health and wellbeing [paragraph 19]."
Friends of the Earth is working with sector allies to advocate for an Environmental Rights Bill that fully implements the Aarhus Convention in to our national law, and is campaigning for a right to a healthy environment.
The dissenting judgment
The dissenting judgment was given by Lord Sales, with whom Lord Richards agreed. In essence, they approved the judgment from the High Court, that the end-use emissions were incapable as a matter of law from constituting "indirect effects". It is, however, the majority judgment which will bind the lower courts in the UK.
Conclusion and next steps
Friends of the Earth strongly opposes all new fossil fuel projects, whether at Horse Hill, in Whitehaven or at Rosebank. The science is clear: we need to urgently transition to a decarbonised future and turn to renewable sources of energy. We’re calling on all political parties to commit to a ban on any new fossil fuel projects.
As is helpfully recorded in the Supreme Court’s judgment, "UNEP has consistently found that, viewed overall, the world’s governments plan to produce more than twice the amount of fossil fuels in 2030 than would be consistent with limiting global warming to 1.5°C… The reports also examine national policies, plans and projections in key countries (including the UK). The general picture is that many governments continue to support, finance, and expand fossil fuel production, even though such policies are irreconcilable with global climate commitments..." [paragraph 142].
Friends of the Earth’s legal team is considering the wider implications of the Supreme Court judgment very carefully. This judgment has fundamentally changed the landscape when it comes to the decision-making process for new fossil fuel projects. It’s made it harder for developers to get permission.
We anticipate that there’ll be knock-on effects for our legal challenge against the Whitehaven coal mine. That case, taken alongside South Lakes Action on Climate Change, is being heard on 16-18 July 2024 at the High Court. Similarly, when developers put forward proposals to extract oil and gas from the North Sea, this judgment will impact on them too.
This victory at the Supreme Court is a powerful boost for all those people up and down the country resisting fossil fuel projects, and for everyone fighting for that overarching goal of ending our reliance on fossil fuels and moving towards home-grown, renewable energy.
That this judgment concerns regulations which are derived from EU law means its effects may resonate beyond the UK. As far as we know, it’s 1 of 2 cases anywhere in Europe to address this issue of end-use emissions from fossil fuel projects in the context of EIA.
The only other judgment on this topic is from the Oslo District Court in January 2024, which also concluded that such effects had to be included in the EIA (Lord Leggatt referred to this judgment and found it to be "persuasive" [paragraph 173]). That Norwegian judgment is on appeal. But the Horse Hill judgment is from the UK’s highest court, and when this issue arises in other courts elsewhere in Europe, it’s likely to be cited by those challenging fossil fuel projects, given the commonality of the EIA Directive.
Further information
Sarah Finch was represented in these proceedings by Marc Willers KC of Garden Court Chambers, Estelle Dehon KC and Ruchi Parekh of Cornerstone Barristers, and by Rowan Smith, Carol Day and Julia Eriksen at the law firm Leigh Day.
Friends of the Earth was represented in these proceedings by Paul Brown KC of Landmark Chambers and by Nina Pindham of Cornerstone Barristers, and by Matthew McFeeley and Hannah Brown at the law firm Richard Buxtons. The lead in-house lawyer at Friends of the Earth is Katie de Kauwe.
For further information and for media enquiries, please contact the Friends of the Earth press team: media@Friends of the Earth.co.uk
