Can an oil drilling project be halted because of the resulting environmental pollution from burning its extracted oil? The United Kingdom Supreme Court’s (“UKSC”) landmark decision in Finch v Surrey County Council (“Finch”) [1] on 20 June 2024 marked a pivotal shift in holding polluters accountable and could potentially propel the United Kingdom’s (“UK”) Net Zero Strategy forward. Although many are hopeful that the decision marks significant progress in the fight against climate change, others have remained sceptical about how it will influence future cases of such a nature.
The Facts
Ms. Finch, a resident who lived near Horse Hill (the site of the oil drilling), challenged Surrey County Council’s (“Council”) decision to grant planning permission to Horse Hill Developments Limited for oil extraction at the site. Finch argued that the Environmental Impact Assessment (“EIA”) conducted for the project required a comprehensive assessment of all significant environmental effects of the project including indirect effects of the project, including the combustion of the extracted oil (also known as “downstream emissions”) [2]. The Council argued that the EIA, as outlined by the European Union’s (“EU”) directive and the UK’s Town and Country Planning (Environmental Impact Assessment) Regulations 2017 legislation, was limited to assessing emissions generated directly at the drilling site and did not cover emissions from processes like refining or combustion occurring beyond the site boundary [3]. The High Court initially dismissed her claim on the basis that it did not fall within the scope of the EIA required by the Regulations, but the Court of Appeal disagreed, stating that downstream emissions could be considered “effects of the project” depending on the causal connection [4]. Ultimately, the UKSC, by a thin majority of three to two, ruled in favour of Finch, finding that the EIA was unlawful for failing to assess the downstream emissions’ impact on climate change. This rendered the EIA a nullity and hence resulted in permission for the project being revoked [5].
The Majority Opinion
The key point of contention amongst the judges was establishing a causal link between oil extraction and downstream emissions. The majority opinion led by Lord Legatt utilised the ‘but for’ test to establish the causal link [6]. In this case, the UKSC determined that the extraction of oil was a necessary condition for its eventual combustion and the release of downstream emissions. Put simply, the oil would remain in the ground and would not be burned ‘but for’ the initial extraction. Therefore, the ‘but for’ test established extraction as a cause of the downstream emissions. However, Lord Legatt rightfully acknowledged that this test, while a useful starting point, is a weak test of causation and can be overly broad [7]. Indeed in many situations, numerous events might satisfy the ‘but for’ test but would not be considered the actual cause of the ultimate outcome.
To substantiate this tenuous causal link, the majority opinion addressed the principle of novus actus interveniens, rejecting the argument that third parties burning the oil constituted an intervening act that would break the chain of causation. It held that the combustion of the extracted oil was not an independent or unforeseeable event but rather an inevitable consequence of its extraction. This meant that extracting the oil guaranteed its eventual refinement and combustion, creating an unbreakable causal chain [8]. This, according to Lord Legatt, represented the strongest possible form of causal connection, exceeding the typical requirements for establishing causation in most legal contexts. Importantly, the UKSC's reasoning emphasised the unique nature of oil compared to other energy industries. They argued that oil has a singular intended use, combustion, making the link between extraction and emissions inherently clear [9]. This distinction, Lord Legatt suggested, differentiates oil extraction from industries like steel production, where the end uses of the product are more diverse, and the causal connection between production and ultimate emissions is less direct [10]. By framing combustion as an expected and natural outcome of extraction, the UKSC effectively nullified the possibility of treating third-party actions as novus actus interveniens.
The Dissenting Opinion
The dissenting views by Lord Sales, backed by Lord Richards, took a very different view from the majority. Lord Sales argued that the EIA Directive should be read more narrowly, focusing on the immediate environmental effects of the oil drilling project itself as this interpretation fits better with the Directive’s purpose [11]. The EU Directive arguably targeted the localised impacts of specific projects and should not have been haphazardly expanded to a larger scope [12]. Case law cited, such as Kilkenny Cheese from Ireland and Greenpeace from Scotland, suggests that the EIA Directive was not meant to encompass indirect effects of downstream emissions [13]. As such, Lord Sales naturally comes to the conclusion that the use of ‘but for’ causation is sorely inadequate in justifying the majority decision, and ultimately, the Council had acted lawfully when granting planning permission.
He further emphasised the importance of proportionality, arguing that the EU directive did not intend to burden local councils with responsibilities beyond their mandate as it would lead to inconsistent and fragmented decision-making [14]. From a practical perspective, this opinion carries weight, considering the potentially paralysing impact it could have on proposed upcoming development projects, which indubitably carry some pollution risks. One may even concur with the Court of Appeal’s view that tackling broader climate issues like downstream emissions should be a job for Parliament in enacting national policies and regulations, not for local planning authorities such as the Council to tackle. Some may view this as a failure to hold major polluters accountable, but Lord Sales’ perspective highlights the practical challenges of balancing small-scale, local planning considerations with broader climate action goals.
This critique also casts a spotlight on the potentially far-reaching scope of EU directives, which as interpreted in this case, could compel local authorities to account for indirect and downstream effects that go well beyond their immediate purview. Such an expansive interpretation raises questions about whether the directive risks overstepping its intended boundaries, creating legal uncertainty and operational challenges for planning authorities trying to fulfil their roles within a manageable framework [15].
While one can appreciate the practical challenges Lord Sales raises, his narrow interpretation of the EIA Directive feels far too short-sighted. Climate change is an inherently global problem, and limiting the Directive's scope to immediate, localised effects undermines its broader environmental purpose. The interconnected nature of environmental harm means that downstream emissions are as much a part of a project’s environmental impact as their direct effects. To dismiss them as irrelevant risks creates loopholes that allow large polluters to evade accountability under the guise of legal technicalities. While it may be true that Parliament is far better equipped and suited to tackle national climate policy, local planning authorities, even small counties, have a critical role in ensuring that individual projects align with these overarching goals. Striking the right balance requires recognising that environmental considerations cannot be neatly compartmentalised, especially in the context of the behemoth of climate change.
Implications of the Case
The decision is already reshaping the landscape for fossil fuel projects, ensuring downstream emissions are no longer ignored in an EIA. The ruling had a direct impact on halting the expansion of an oil and gas site at Wressle in Lincolnshire [16]. Lincolnshire County Council had approved the project without requiring an EIA for downstream emissions, relying on outdated legal precedent [17]. Following the decision in Finch, Lincolnshire County Council conceded, admitting the planning consent was invalid because of its failure to consider downstream emissions. As a result, the court quashed the planning permission, stopping the project until a proper EIA was conducted. The real-world implications of Finch do seem to underscore a growing legal momentum to hold developers and planning authorities accountable for the climate impacts of their decisions. However, there still remains great uncertainty on whether Finch will extend to already approved projects. For instance, climate activists may attempt to seek an injunction to stop the drilling of oils that have been approved but not commenced [18].
Despite great optimism about what Finch could mean for climate activism, the ruling may not be as transformative as it seems. The EIAs are indeed primarily procedural in nature and do not mandate project rejection solely based on identified environmental impacts [19]. In addition, Lord Leggatt did note that the judgment did not consider the relevance of the Council’s application of UK’s climate policy [20]. If the UK government continues to prioritise energy security and economic growth derived from fossil fuel extraction, Finch’s impact on curbing downstream emissions might be limited [21]. Projects deemed strategically important for energy production, even with significant downstream emissions, might still receive approval. This potential outcome highlights the tension between the legal requirement to consider downstream emissions under the Finch and the political and economic realities influencing decision-making.
Conclusion
While the Finch decision is undeniably a legal milestone, its full impact remains to be seen. While it introduces critical accountability for downstream emissions, it stops short of mandating the rejection of high-polluting projects, meaning that the ball is very much back in the UK government’s court. For climate advocates, Finch represents a step forward and will be a powerful tool to demand transparency from polluters in environmental assessments. Yet, its influence will depend on how consistently it is applied and whether future cases can build on its principles.
So is this ruling the much-anticipated game-changer for climate policy that many hope for? Or will it remain a procedural safeguard, forever overshadowed by political and economic interests? One thing is clear: Finch has set the stage for a new era of climate accountability in planning law, and its legacy will likely be shaped by the battles it inspires in the years to come.
Bibliography:
[1] R (Finch) v Surrey County Council and others [2024] UKSC 20 [44]
[2] Ibid,, [44]
[3] Ibid, [35]
[4] Ibid, [45]-[47]
[5] Ibid, [174]
[6] Ibid, [67]-[68]
[7] Ibid, [67]
[8] Ibid. [80]
[9] Ibid. [80]
[10] Ibid. [121]
[11] Ibid. [119-121]
[12] Ibid. [273-276]
[13] Ibid. [167-173]
[14] Ibid, [259]-[261]
[15] Cochrane L, “Carbon Emissions and Causation: R (Finch) v Surrey County Council and Ors” (4 New Square Chambers, July 2, 2024) <https://www.4newsquare.com/carbon-emissions-and-causation-r-finch-v-surrey-county-council-and-ors/> accessed November 26, 2024
[16] Leigh Day, “Plans to Expand Oil and Gas Production Site in Lincolnshire Quashed” Leigh Day (October 23, 2024) <https://www.leighday.co.uk/news/news/2024-news/plans-to-expand-oil-and-gas-production-site-in-lincolnshire-quashed/> accessed November 26, 2024.
[17] Murphy W, “Lincolnshire Oil Drilling Permission Quashed after Supreme Court Judgment in Finch” (Cornerstone Barristers, July 11, 2024) <https://cornerstonebarristers.com/lincolnshire-oil-drilling-permission-quashed-after-supreme-court-judgment-in-finch/> accessed November 26, 2024
[18] Vinson & Elkins, “UK Supreme Court Hands Down a Groundbreaking Decision Requiring The Assessment of ‘Scope 3’ GHG Emissions for a Proposed Oil Development: R (Finch) v Surrey County Council And Others” (Vinson & Elkins LLP, June 24, 2024) <https://www.velaw.com/insights/uk-supreme-court-hands-down-a-groundbreaking-decision-requiring-the-assessment-of-scope-3-ghg-emissions-for-a-proposed-oil-development-r-finch-v-surrey-county-council-and-others/> accessed November 26, 2024
[19] Ibid, [62]
[20] Ibid, [151]
[21] Freshfields, “Supreme Court Judgment in Finch – Overview of the Decision and Its Implications” (Freshfields, August 2024) <https://www.freshfields.com/en-gb/our-thinking/knowledge/briefing/2024/08/supreme-court-judgment-in-finch-overview-of-the-decision-and-its-implications/> accessed November 26, 2024.
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