Supreme Court hears landmark Finch case – Do we need to consider downstream Greenhouse Gas (GHG) emissions in planning permissions?
In 2019, planning permission Ref: RE18/02667/CON was granted for the retention and extension of the existing well site at Horse Hill and to allow the drilling of four new hydrocarbon wells. The environmental statement only assessed the direct impacts of the GHG emissions.
The claimant, Sarah Finch, started judicial review proceedings arguing that the council had failed its legal duty to consider the indirect environmental impacts caused by the downstream GHG emissions (known as scope 3 emissions).
The High Court ruled that the environmental statement should only address environmental effects of the development for which planning permission is sought should be evaluated and that the downstream GHG emissions were not one of them.
Ms Finch appealed the High Court’s ruling. The Court of Appeal ruled by majority that the planning permission was lawful. However, it considered that downstream GHG emissions could be an indirect environmental effect of a development, but this would need to be determined in a case-by-case basis by the planning authority.
The case was granted permission to appeal to the Supreme Court. Several external groups provided additional evidence: Office for Environmental Protection (OEP), Friends of the Earth, Greenpeace, and West Cumbria Mining.
Supreme Court hearing
The hearing took place at the Supreme Court on 21st and 22nd June 2023. The recordings of the hearing are available here.
The key takeaways of the hearing are summarised below:
1) The positions of the parties were based on the following main points:
- Appellant (Ms Finch)
- The meaning of “indirect effect” is a matter of statutory construction.
- Giving the planning authorities the power to define “indirect effect” in a case-by-case basis would be contrary to the EIA regulations and directive.
- In an oil extraction project, the buildings used for extraction are just a minor part of the project, while the main part is the oil extracted itself.
- The “gatekeeper function” that prevents too much from being included in an EIA is not the meaning of indirect effect or the meaning of project. The “gatekeeper” is threefold:
- Effects should be likely
- Effects should be to be significant
- The required information to assess the effect is possible to obtain having regard current knowledge and method of assessment.
- In this case, the downstream emissions of GHG caused by the extraction of oil were agreed by all parties to be a material planning consideration.
- Respondent (Surrey County Council)
- Provided the project and its operation are correctly identified, the scope and context of the assessment is for the planning authority alone to determine. The scoping opinion was explicit that scope 3 emissions would not be addressed. Comments of the public on this matter were evaluated by the Council as part of the EIA process.
- EIA should only evaluate the effects of the project. For this case, the project is the works of extraction while the oil is the end product. The commercial purposes of the project are met when the oil is sold.
- There is no definition of “indirect effect”. An effect is one that has a relevant degree of connection with the project. There is no sufficient degree of connection between the extraction and the combustion. In that regard, only scope one and two emissions need to be reported, while the scope 3 emissions (downstream GHG emissions) would be most appropriately reported by those who are downstream.
- The “gatekeeper” provisions mentioned by the appellant are not useful to determine what is an indirect effect. Likelihood and significance are simple thresholds to determine whether something requires an EIA. The impossibility of carrying out the assessment is not a good “gatekeeper” either as the EIA directive provides one must refer to difficulties or lack of knowledge instead of just completely avoiding the environmental assessment.
- Interested party (Horse Hill Developments Limited)
- The focus of the EIA directive is not on the emissions, but on the project. The effects must be intrinsic to the project. The combustion of the oil which causes the downstream GHG emissions is a separate project for which a different party is responsible.
- Downstream emissions should not be considered in the EIA as they are better reported by the entities generating those emissions.
2) Lady Rose asked whether the appellants interpretation would be applicable to all projects within the scope of the EIA regulations. The appellant confirmed their case is only for fossil fuel extraction projects, because they have a unique nature as they extract hydrocarbons which are the prime cause of GHG emissions through its inevitable combustion. This position was reiterated when Lord Sales later asked whether the downstream GHG emissions would need to be evaluated for a residential development as it has parking spaces which would serve to park cars and the cars would generate GHG emissions.
3) The Lords requested the appellant to explain how the evaluation of downstream GHG emissions would work within the current EIA regulations. The appellant responded that before approaching the planning authority the developers should identify if they will have any downstream emissions of GHG, then tell the planning authority either that: 1) Yes, there are downstream emissions that may be likely significant and should be evaluated in an EIA, or 2) No, there are no significant downstream emissions and we cannot assess them anyway because they are unknowable. Then this would be subject to the EIA process and consultees would be able to engage.
4) According to the appellant, in 2021, at least 79% of oil companies already voluntarily reported on scope 3 emissions. Therefore, requiring the evaluation of these emissions through an EIA is not an impractical step, a barrier for growth or a break on development.
5) During the discussion on the national and local carbon budgets, Lord Sales asked the appellant how a planning authority could evaluate the significance of downstream GHG emissions. He provided that this development was for a rather small well and its emissions would be tiny compared to the emissions from Saudi Arabia for example. The appellant proposed that the numbers would need to be contextualised considering sectoral budgets for example.
6) While the defendant’s position relied on the fact that the combustion of oil is not part of the project, Lord Leggatt stressed that the question is whether the burning of the oil is an effect of abstracting it or not. The fact that refining and burning is not part of the project is irrelevant.
7) Lord Leggatt also criticised the position that planning authorities should be able to determine on a case-by-case basis when something is considered an indirect effect.
8) Another key point of debate was the government’s commitment, under the Climate Change Act, to ensure the UK reduces its greenhouse gas emissions by 100% from 1990 levels by 2050. The appellant stressed the need for EIAs to take these targets and carbon budgets into account.
Relevance
The outcome of this case could substantially affect the way in which planning decisions are made in connection with the oil industry. If the Supreme Court rules favouring Ms Finch, then planning authorities would have to evaluate scope 3 emissions of developments for the extraction of fossil fuels. This could potentially stop new fossil fuels projects due to the additional burden required to evaluate and mitigate scope 3 emissions, which are effectively emissions made by third parties.
While the appellant provided that their case was only concerned with the extraction of fossil fuels, these are not the only projects that have scope 3 emissions. Thus, the Supreme Court’s ruling could potentially affect other type of developments like the wider extractive industries (i.e. mining), production of raw materials (i.e. plastic industry), transportation (i.e. airports, car parks), among other developments with scope 3 emissions.
