In the recent case of R (on the application of Finch) v Surrey County Council [2024] UKSC 20; [2024] PLSCS 114, the Supreme Court held that an environmental impact assessment for a project to extract crude oil should include an assessment of the “downstream” indirect effects of that extraction, given that the oil would inevitably be burnt which would generate significant greenhouse gas emissions.
Chain of causation
The Supreme Court concluded that, while the questions of whether effects are “likely” or “significant” remain matters of evaluative judgment, the question of what the indirect effects of a project are should generate only one answer. Applying various legal tests of causation, the Supreme Court found a strong and uninterrupted causal relationship between the extraction of oil and the GHGs emitted during its eventual combustion.
A key purpose of EIA is to assess the likely significant effects of a project so that a fully informed planning decision can be made, with the benefit of public consultation. Likely significant indirect effects of a proposal should not be omitted from an EIA simply because the effects will occur in another location. Climate change is a global issue.
The crude oil in this case required refinement elsewhere prior to combustion, but the Supreme Court considered that this would not fundamentally alter the basic nature or intended use of the product being extracted at the development site. Further processing does not automatically prevent an impact from being an indirect effect for EIA purposes. This is the case even if the processing occurs at a separate project which is subject to its own EIA.
Nor should effects be excluded from the scope of an EIA simply because they are subject to control by other non-planning regimes. This may be relevant to the overall planning judgment, but it does not justify scoping out of the EIA likely significant indirect effects which are required to be assessed on proper interpretation of the legislation.
The mitigation of effects is not the main purpose of EIA, though it is a valuable result of the EIA process in many cases. Even if an applicant can offer no measures to reduce their effects, all direct and indirect likely significant effects must be assessed so that this information is available to the decision-maker and to the public. The Supreme Court considered this to be a pragmatic approach to EIA. We consider this consistent with a precautionary approach too.
Establishing an inevitable causal relationship between a proposed development and its putative effects does not necessarily mean that the effects must be assessed in the EIA. It was an agreed fact in Finch that the amount of GHG emissions that would be released by the inevitable combustion of the oil extracted at the development could be estimated using an established methodology. A meaningful assessment of the GHG emissions resulting from the ultimate use of other commodities, or other types of development, might not be so readily available.
This case concerned “downstream” GHG emissions, ie the inevitable effects of the use of products created at the development. The next logical step is also to consider the causal connection between a proposed development and its “upstream” effects, being those which must occur prior to the activity that will be carried out at the development.
OEP intervention
This was the first time that the Office for Environmental Protection (a non-departmental public body sponsored by the Department for Environment, Food and Rural Affairs) intervened in a court case. The OEP became involved because it was concerned the previous decisions of the High Court and the Court of Appeal “could have an adverse effect on sound environmental decision-making and, hence, on environmental protection and the improvement of the natural environment”. The OEP’s concern was in respect of both GHG emissions and indirect effects more broadly.
The Supreme Court decided that the approach taken by the Court of Appeal (that it was a matter of judgment for the decision-maker whether an impact is an indirect effect for EIA purposes) would lead to unpredictable and inconsistent decision-making. The Supreme Court also considered that the High Court’s conclusion (that off-site refinement would, as a matter of law, break the chain of causation in this case) was inconsistent with the language and purpose of the EIA regulations. Will the OEP feel more emboldened to intervene in the future?
Environmental outcomes reports
Part 6 of the Levelling-up and Regeneration Act 2022 allows for the creation of a new outcomes-based approach to the environmental assessment of development proposals. We await further regulations, but we might expect the new regime to reflect the Supreme Court’s decision and to require monitoring of both direct and indirect effects, including any increase or reduction of GHG emissions, as part of the assessment process.
Looking ahead
On its face, securing planning permission for oil extraction has just become harder. However, the adverse effects of a development on climate change remains just one of the various factors to be considered in the overall planning balance, just as the benefits of a green energy project are. Does this mean all proposals that will generate significant GHG emissions should be refused? A net zero carbon world surely demands this, but a gradual transition to net zero carbon might suggest otherwise. Clarification in national policy by the new government would be welcome.
Mary Cook is a partner and Safiyah Islam is an associate at Town Legal
