R (Finch) v Surrey County Council and others [2024] UKSC 20

Sarah Finch challenged Surrey County Council's grant of planning permission for oil extraction, arguing the environmental impact assessment unlawfully excluded greenhouse gas emissions from eventual combustion of the extracted oil. The Supreme Court held (3-2) that such downstream emissions must be assessed as indirect effects of the project under the EIA Directive.

Facts

Horse Hill Developments Ltd applied to Surrey County Council for planning permission to expand oil production at a well site near Horley, Surrey. The project involved extracting oil for commercial purposes over approximately 20 years, with estimated total production of around 3.3 million tonnes. The Council’s initial scoping opinion recommended that the Environmental Impact Assessment (EIA) should consider ‘the global warming potential of the oil and gas that would be produced by the proposed well site.’ However, the developer’s Environmental Statement confined its assessment to direct greenhouse gas emissions from within the well site boundary, excluding downstream combustion emissions. The Council accepted this approach and granted planning permission in September 2019.

Agreed Facts

It was agreed that it was inevitable that oil produced from the site would be refined and eventually undergo combustion, producing greenhouse gas emissions. The combustion emissions could be readily quantified using established methodology, estimated at approximately 10.6 million tonnes of CO2 over the project’s lifetime—nearly two orders of magnitude greater than the assessed direct emissions of 140,958 tonnes.

Issues

The central issue was whether, under the EIA Directive (2011/92/EU as amended by 2014/52/EU) and the Town and Country Planning (Environmental Impact Assessment) Regulations 2017, it was lawful for the Council to exclude from the EIA the greenhouse gas emissions that would occur when the extracted oil, after being refined, is burnt as fuel.

Sub-issues

1. Whether combustion emissions are ‘effects of the project’ on climate within the meaning of the legislation.

2. Whether determining this is a matter of law or evaluative judgment for the planning authority.

3. Whether the Council’s reasons for excluding combustion emissions were legally sound.

Judgment

Majority Opinion (Lord Leggatt, with Lord Kitchin and Lady Rose)

The majority held that the combustion emissions were indirect effects of the project that should have been assessed. Lord Leggatt emphasised the strong causal connection:

“It is not necessary to consider what is meant by ‘likely’ because it is an agreed fact that, if the project goes ahead, this chain of events and the resulting effects on climate are not merely likely but inevitable.”

On the nature of the causal link, Lord Leggatt stated:

“Expressed in terms of necessary and sufficient conditions, this is not simply a case in which the ‘but for’ test is satisfied… On the agreed facts, the extraction of the oil is not just a necessary condition of burning it as fuel; it is also sufficient to bring about that result because it is agreed that extracting the oil from the ground guarantees that it will be refined and burnt as fuel.”

The majority rejected the argument that intermediate processes (such as refining) broke the causal chain:

“The process of refining crude oil does not alter the basic nature and intended use of the commodity. Given that the process of refining the oil is one which it is always expected and intended that the oil will undergo – and which it is agreed that the oil produced here will inevitably undergo – it is unreasonable to regard it as breaking the causal connection between the extraction of the oil and its use.”

Regarding the EIA Directive’s purpose, Lord Leggatt emphasised:

“The legislation is essentially procedural in nature. It is not concerned with the substance of the decision whether to grant development consent but with how the decision is taken… it is essential to the validity of the decision that, before it is made, there has been a systematic and comprehensive assessment of the likely significant effects of the project on the environment.”

The majority found the Council’s reasons for excluding combustion emissions were legally flawed, including the reliance on other regulatory regimes and the assertion that such emissions were ‘outwith the control’ of site operators.

Dissenting Opinion (Lord Sales, with Lord Richards)

Lord Sales would have dismissed the appeal, reasoning that downstream scope 3 emissions were not ‘indirect effects of the project’ within the meaning of the EIA Directive. He emphasised:

“The EIA Directive contemplates that decisions on the grant of planning consent will often be taken by local or regional authorities, rather than national authorities… The procedures and rules laid down in the Directive are intended to be appropriate for decision-making at local or regional level by such authorities.”

Lord Sales argued that scope 3 emissions are properly addressed at national policy level through mechanisms like the Climate Change Act 2008, and that requiring local authorities to assess such emissions would be disproportionate and inconsistent with the Directive’s scheme.

Implications

This decision has significant implications for environmental impact assessments in the UK:

1. Oil and Gas Extraction: Future EIAs for fossil fuel extraction projects must include assessment of downstream combustion emissions, representing a substantial expansion of assessment scope.

2. Climate Considerations: The decision reinforces that climate change impacts must be comprehensively assessed, reflecting the amendments made by the 2014 Directive.

3. Causal Connection Test: Where downstream environmental effects are inevitable consequences of a project, they constitute effects ‘of the project’ requiring assessment.

4. Public Participation: The judgment emphasises the democratic function of EIA in ensuring public debate occurs on an informed basis about significant environmental effects.

5. Consistency: The majority rejected the approach that would allow different planning authorities to reach different conclusions on identical legal questions, promoting consistency in EIA practice.

The case represents an important development in environmental law, aligning UK practice with approaches taken in some other jurisdictions (such as the Oslo District Court in Greenpeace Nordic) while departing from the Irish Supreme Court’s reasoning in the Kilkenny Cheese case.

Verdict: Appeal allowed by majority (3-2). The Council’s decision to grant planning permission was held to be unlawful because the EIA failed to assess the effect on climate of the combustion of the oil to be produced, and the reasons for disregarding this effect were flawed.

Source: R (Finch) v Surrey County Council and others [2024] UKSC 20