R (on the application of Sarah Finch on behalf of the Weald Action Group) v Surrey County Council

Heard on 21 and 22 June 2023

Lord Leggatt ( with whomLord KitchinandLady Roseagree):

Anyone interested in the future of our planet is aware by now of the impact on its climate of burning fossil fuels — chiefly oil, coal and gas. When fossil fuels are burnt, they release carbon dioxide and other “greenhouse gases” — so called because they act like a greenhouse in the earth's atmosphere, trapping the sun's heat and causing global surface temperatures to rise. According to the United Nations Environment Programme (“UNEP”) Production Gap Report 2023, p 3, close to 90% of global carbon dioxide emissions stem from burning fossil fuels.

The whole purpose of extracting fossil fuels is to make hydrocarbons available for combustion. It can therefore be said with virtual certainty that, once oil has been extracted from the ground, the carbon contained within it will sooner or later be released into the atmosphere as carbon dioxide and so will contribute to global warming. This is true even if only the net increase in greenhouse gas emissions is considered. Leaving oil in the ground in one place does not result in a corresponding increase in production elsewhere: see UNEP's 2019 Production Gap Report, p 50, which reported, based on studies using elasticities of supply and demand from the economics literature, that each barrel of oil left undeveloped in one region will lead to 0.2 to 0.6 barrels not consumed globally over the longer term.

Before a developer is allowed to proceed with a project which is likely to have significant effects on the environment, legislation in the United Kingdom and many other countries requires an environmental impact assessment (“EIA”) to be carried out. The object of an EIA is to ensure that the environmental impact of a project is exposed to public debate and considered in the decision-making process. The legislation does not prevent the competent authority from giving development consent for projects which will cause significant harm to the environment. But it aims to ensure that, if such consent is given, it is given with full knowledge of the environmental cost.

This appeal raises a question about whether the greenhouse gas (“GHG”) emissions which will occur when oil extracted from an oil well, after being refined, is burnt as fuel must be included in the EIA required before development consent may be given for the extraction of the oil. The answer to this question depends on whether, for the purpose of the applicable legislation, the effect on climate measured by the GHG emissions that will occur upon combustion of the oil is an effect of the project on climate.

The competent authority, Surrey County Council, initially considered that the EIA for a project to extract oil for commercial purposes at a well site in Surrey should include an assessment of the combustion emissions from the oil to be produced. The council advised the developer that its environmental statement describing the likely significant effects of the project on the environment should assess the effect of the project on climate and “should consider, in particular, the global warming potential of the oil and gas that would be produced by the proposed well site.” But later the council changed its mind. It accepted as sufficient an environmental statement which assessed only direct releases of greenhouse gases at the project site over the lifetime of the project and contained no assessment of the impact on climate of the combustion of the oil. In consequence, no information about the combustion emissions was made available to the public or considered by the council before it granted development consent for the project.

The issue which this court must now decide is whether it was lawful for the council to restrict the scope of the EIA in this way. In defence of the council's decision to do so, two alternative arguments are made. First, it is said that as a matter of law the combustion emissions could not be regarded as environmental effects of the project within the meaning of the legislation. So the council was right to omit them from the EIA. Alternatively, it is said that whether the combustion emissions were effects of the project was a matter of evaluative judgment for the council. Hence the council's decision not to assess the combustion emissions can be challenged only on the limited grounds on which a court can review an exercise of discretion by a public authority. Here, it is argued, there is no proper ground for such a challenge.

I am not persuaded by either argument. It is agreed that the project under consideration involves the extraction of oil for commercial purposes for a period estimated at 20 years in quantities sufficient to make an EIA mandatory. It is also agreed that it is not merely likely, but inevitable, that the oil extracted will be sent to refineries and that the refined oil will eventually undergo combustion, which will produce GHG emissions. It is not disputed that these emissions, which can easily be quantified, will have a significant impact on climate. The only issue is whether the combustion emissions are effects of the project at all. It seems to me plain that they are.

Before explaining my reasons for so concluding, I must identify the applicable legislative provisions and say a little more about the factual and procedural background to this appeal.

The legislation which the council had to apply was contained in the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (SI 2017/571). I will refer to these as “the 2017 Regulations”. The 2017 Regulations are one of a number of UK statutory instruments designed to implement Directive 2011/92/EU of the European Parliament and of the Council, as amended by Directive 2014/52/EU. I will refer to Directive 2011/92/EU, as amended, as “the EIA Directive” and to Directive 2014/52/EU as “the 2014 Directive”.

We are concerned with the law as it stood in September 2019 when the council's decision to grant development consent for the project was taken. This was before the United Kingdom left the European Union. It is not suggested that the analysis of this case is affected by any changes made to English law as a result of Brexit.

The 2017 Regulations are to be interpreted in line with the EIA Directive which they were intended to implement. In these circumstances it is appropriate to focus directly on the provisions of the EIA Directive: see eg R (Friends of the Earth Ltd) v Secretary of State for Transport[2020] UKSC 52; [2021] PTSR 190, para 136.

The principle underpinning the EIA Directive, as stated in recital (7), is that:

“Development consent for public and private projects which are likely to have significant effects on the environment should be granted only after an assessment of the likely significant environmental effects of those projects has been carried out.”

“Development consent” is defined in article 1 as “the decision of the competent authority or authorities which entitles the developer to proceed with the project.” The term “project” is widely defined and specifically includes “the extraction of mineral resources.”

The general obligation imposed by the EIA Directive is set out in article 2(1):

“Member States shall adopt all measures necessary to ensure that, before development consent is given, projects likely to have significant effects on the environment by virtue, inter alia, of their nature, size or location are made subject to a requirement for development consent and an assessment with regard to their effects on the environment. Those projects are defined in article 4.”

Certain projects — such as oil refineries, power stations and waste disposal installations among others — are regarded as inherently likely to have significant effects on the environment and therefore automatically require development consent and an EIA: see article 4(1). These projects are listed in Annex I. The list includes, at item 14:

“Extraction of petroleum and natural gas for commercial purposes where the amount extracted exceeds 500 tonnes/day in the case of petroleum and 500 000 cubic metres/day in the case of gas.”

It is agreed that the project here falls within this description. Development consent for the project and an EIA were therefore required.

As defined in article 1(2)(g) of the EIA Directive, “environmental impact assessment” is a process consisting of: (i) the preparation of an EIA report by the developer; (ii) the carrying out of consultations, including public...