Finch vs Surrey County Council: Supreme Court rules oil production planning permission unlawful for failing to assess downstream greenhouse gas emissions

In a landmark decision handed down today, the Supreme Court has declared that the grant of planning permission for oil production in Surrey was unlawful. This ruling came as the Court determined that the assessment failed to account for the downstream greenhouse gas (GHG) emissions resulting from the eventual combustion of the refined oil.

Case Background

The case, Finch vs Surrey County Council, centered on the correct interpretation of the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 ("EIA Regulations"). Specifically, the Court examined the requirement to assess the "direct and indirect significant effects of a project" on the climate. The key issue was whether Surrey County Council, when considering an application for oil extraction at the Horse Hill Well Site, should have required an assessment of the downstream or 'scope 3' GHG emissions from the future use of the refined oil products.

Supreme Court's Judgment

In the majority judgment, Lord Leggatt, supported by Lord Kitchin and Lady Rose, emphasised that the effects of a project, as per the EIA Regulations, include a clear causal connection between the oil extraction and its combustion. The Court ruled that the extraction of oil is directly responsible for its subsequent combustion, thus creating a strong causal link that necessitates an assessment of the downstream emissions.

The Supreme Court dismissed the reasoning of lower courts, which suggested that intermediate steps like refining could break this chain of causation. It also rejected the Court of Appeal's view that such assessments could be left to decision-makers' evaluative judgment, arguing that this would lead to inconsistent and arbitrary decisions, especially critical given the increasing importance of climate change in policy and public debate.

Importance of Public Participation

The ruling highlighted the necessity of public participation in environmental decision-making, aligning with the objectives of the EIA Directive and the Aarhus Convention. Lord Leggatt noted that public awareness and democratic legitimacy in environmental decisions are crucial: "You can only care about what you know about."

Policy and Legal Framework

Addressing national policy on petroleum extraction, the Court noted that while national policies must be considered, they do not override the need to assess adverse climate effects. The Court also dismissed the argument regarding the transboundary nature of GHG emissions, reaffirming that climate change is a global issue and emissions are within the control of site operators.

Implications for Future Projects

The Supreme Court confirmed that general estimates of combustion emissions are feasible and that leaving oil unextracted does not necessarily lead to increased production elsewhere. For the Horse Hill project, the Court found that the downstream GHG emissions, which were significantly higher than direct emissions, could not be dismissed as negligible.