A year after the two day hearing in June 2023, the Supreme Court has issued its judgment, ruling Surrey County Council's grant of planning permission for onshore oil development at Horse Hill to be have been unlawful for failure to have taken into account carbon emissions that would (in the words of Lord Leggatt) ‘inevitably’ result from combustion of the oil produced at the site by end users. 

It did not matter that those emissions might occur at a location far removed from the drilling site, or even if the oil were to be burnt overseas, since climate changes impacts are felt globally. Equally it did not matter that those same carbon emissions might also factor into environmental impact assessments concluded for developments further along the supply chain - such as a new refinery where the oil from Horse Hill might be sent to be processed. 

Neither could local authorities claim it was simply ‘too difficult’ for them to estimate the possible future emissions. Lord Leggatt pointed to respected sources of estimating carbon emissions by the use of a conversion factor multiplied by total estimated production volumes over the expected project lifetime. The council could in fact have insisted that not only those emissions, but also operational and transport emissions further along the supply chain (such as those caused by the refining process and emissions from tankering fuel to petrol stations) could have been included. 

Even though the permission was granted pre-Brexit, the Supreme Court was keen to point out that the applicable principles are unchanged and thus will be of relevance also to post-Brexit permissions.

The circumstances of the case were that Surrey County Council had initially recommended that the developer include the indirect effects of end-users burning the oil in its environmental statement that was required as the development fell within the mandatory categories where an environmental impact assessment is required before planning permission can be granted. The developer had instead only included the estimated direct emissions of constructing and operating activities taking place at the well site. The council accepted this and granted permission, but the permission was challenged in a judicial review application brought by an individual (Ms Finch) on behalf of a local action group. The action group lost in the High Court on the basis that either (i) the downstream (Scope 3) emissions were either legally incapable of being ‘indirect effects’ (the term used in the relevant EIA legislation) or (ii) that it was not possible to conclude that the council had been acting unlawfully or irrationally in deciding to exclude them. In the Court of Appeal, the action group lost again by a majority decision that the council enjoyed a discretion to decide whether there was a ‘sufficient causal connection’ between the oil extraction activities and the emissions of combusting the oil, and in the circumstances they hadn't acted irrationally in deciding the downstream emissions did not need to be taken into account.

The majority of the Supreme Court thought very differently, in what is a surprisingly pro-environment decision that departs significantly from customary UK EIA practice that third party emissions beyond the developer's control need not be included. The implications are - at the least - that future environmental statements submitted for planning applications will need to lay bare to public scrutiny the full emissions that flow as a consequence of fossil fuel extraction over the expected lifetime of the project, to the extent they can be reasonably estimated. When evaluating the scale of the resulting climate impact, it is hard to see how it will be possible for developers to mitigate it sufficiently (as here), and hence puts in question their ability to secure permission. As well as onshore oil and gas, the decision is highly relevant for developers of coal projects. The judgment poses a watershed question for the incoming Government on 5th July of whether to nail their environmental colours to the mast and propose amendments to EIA rules to negate the effect of the decision.