Background
Historically, planning bodies in the UK assessed the environmental impacts of fossil fuel projects based primarily on the emissions generated at the project site. Known as “scope 1” and “scope 2” emissions, these include direct emissions from owned or controlled sources and indirect emissions from the generation of purchased energy, respectively. However, “scope 3” emissions—those resulting from the burning of the extracted fossil fuels—were often overlooked.
For instance, in the case of the Horse Hill oil drilling project in Surrey, the local council granted planning permission without accounting for the downstream emissions from the eventual combustion of the oil. Campaigner Sarah Finch challenged this decision, arguing that the broader environmental impacts, including scope 3 emissions, should be considered. Lower courts initially dismissed Finch’s arguments, but her persistence led to a significant turn of events in the Supreme Court.
The Landmark Ruling
On June 20, 2024, the UK Supreme Court ruled that the environmental impact assessments (EIAs) for fossil fuel projects must include scope 3 emissions. This decision sets a critical precedent, requiring planning bodies to account for the full climate impact of fossil fuel projects when considering site proposals .
The ruling emphasised that the purpose of extracting fossil fuels is to burn them, inevitably releasing greenhouse gases into the atmosphere. The court stated that all likely significant effects of a project must be assessed, regardless of where or when they occur. This holistic approach ensures that the true environmental cost of fossil fuel projects is considered in the planning process.
Impacts of the Ruling
- Environmental Impact
The Supreme Court’s decision is a significant victory for climate activists and sets a new standard for environmental accountability. By requiring the consideration of scope 3 emissions, the ruling helps to ensure that the long-term environmental impacts of fossil fuel projects are recognised and mitigated. This move aligns with global efforts to limit climate change and adhere to the goals set out in the Paris Agreement.
Climate lawyer Tessa Khan described the ruling as a “huge win in the fight for a livable climate,” highlighting its potential to influence other domestic lawsuits challenging fossil fuel extraction . The decision supports the notion that emissions from burning oil reserves cannot be ignored, thereby strengthening the legal framework for environmental protection.
- Legal and Regulatory Impact
The ruling has significant legal implications, particularly for local planning authorities and fossil fuel companies. Authorities must now conduct more comprehensive EIAs, potentially leading to more rejections of fossil fuel projects due to their high environmental costs. This shift could also result in increased litigation as companies and campaigners navigate the new legal landscape.
For example, the judgement has already impacted ongoing lawsuits against other fossil fuel projects, such as the Rosebank and Jackdaw oil and gas fields in the North Sea and the controversial new coal mine in Whitehaven, Cumbria . These cases will likely be reassessed under the new EIA requirements, potentially halting or significantly altering their development.
- Economic Impact
The ruling may have economic repercussions for the fossil fuel industry in the UK. Companies may face higher costs and longer timelines to obtain planning permission, as they must now include comprehensive assessments of downstream emissions. This could deter investment in new fossil fuel projects and shift focus towards more sustainable energy sources.
Stephen Sanderson, chief executive of UKOG, the company behind the Horse Hill project, expressed concern over the ruling, noting that it underscores the need for a strategic shift towards low-carbon energy solutions, such as underground hydrogen storage. This transition could accelerate the UK’s move towards a greener economy, fostering innovation and investment in renewable energy technologies.
Future Forecast
Short-Term Outlook
In the short term, the Supreme Court’s ruling is expected to cause delays and reevaluations of existing and proposed fossil fuel projects. Local authorities will need to update their EIA procedures to comply with the new legal standards, potentially leading to a backlog of planning applications.
This period of adjustment may create uncertainty for both the fossil fuel industry and environmental campaigners.
Long-Term Outlook
In the long term, the ruling could mark a significant turning point in the UK’s energy policy. As the country strives to meet its net-zero emissions targets by 2050, the increased scrutiny of fossil fuel projects could reduce their prevalence and encourage the development of cleaner energy alternatives. This shift is essential for mitigating climate change and achieving sustainable development.
The decision may also influence international environmental law, setting a precedent for other countries to follow. By demonstrating the importance of considering the full lifecycle emissions of fossil fuel projects, the UK could lead the way in promoting more comprehensive and effective environmental regulations worldwide.
Conclusion
The UK Supreme Court’s landmark ruling on the consideration of downstream emissions in fossil fuel project planning marks a pivotal moment for environmental law and climate policy. By mandating the inclusion of scope 3 emissions in EIAs, the court has set a new standard for environmental accountability and protection.
This ruling presents an opportunity to accelerate the transition towards sustainable energy solutions. The future of fossil fuel projects in the UK now hinges on a more rigorous and holistic approach to environmental impact assessment, promising a more sustainable and environmentally conscious path forward.
Words by Mallika Singhal
Mallika is a Policy & Law Consultant. Originally from India, Mallika has recently moved to Hamburg, Germany after living in Paris, France for nearly a decade. True to her eclectic nature, she has held various roles in social impact & feminist justice across international organisations, start-ups, NGOs and consulting.
