Scope 3 Emissions and EIA – Legal Update
Supreme Court ruling mandates Scope 3 emissions in environmental assessments, revolutionising the sector with industry-wide impact.
R (Finch) v Surrey County Council: An Important Ruling on Scope 3 Emissions in Environmental Impact Assessment Screening
On 20 June 2024, the Supreme Court ruled in favour of Finch in a landmark decision which concluded that Scope 3 emissions must be considered as an indirect environmental effect and should be considered as part of the Environmental Impact Assessment (EIA).
Prior to this, EIAs were only required to consider Scope 1 (direct) and Scope 2 (indirect) emissions, meaning that this ruling has significant implications for future hydrocarbon projects in the UK and potentially across multiple industries, as it now requires consideration of emissions generated by downstream users.
The case centres around a long fought legal battle that began in 2019, when planning permission was granted for the expansion of the Horse Hill hydrocarbon site (ref: RE18/02667/CON). Finch filed a judicial review, contending that Surrey County Council had failed its legal duty to consider the indirect environmental impacts of the scheme, as the EIA had considered the climate impact of extracting oil from the ground (predicted to be around 140,000 tonnes of CO2e), but did not consider the Scope 3 emissions from the burning of the oil (amounting to more than 10 million tonnes of CO2e).
The High Court ruled that that it would have been impossible for Surrey County Council to have considered these indirect emissions. Undeterred, Finch took the case to the Court of Appeal in 2021. While the Court of Appeal upheld the planning permission and ruled that Surrey County Council had acted lawfully, they conceded that downstream GHG emissions (Scope 3) could be an indirect environmental effect of a development. However, they ruled that their inclusion within EIAs could be made by planning authorities on a case-by-case basis. An unclear verdict some (the Supreme Court) might say!
The Supreme Court unanimously rejected the Court of Appeal’s case-by-case approach and ruled that Surrey County Council’s decision to grant planning permission without assessing Scope 3 emissions was in fact unlawful, as these were judged to be indirect effects of the project.
As sustainability remains a top priority for organisations across multiple industries, this ruling helps to set a precedent for future planning permissions, highlighting the requirement to consider the full carbon footprint of a development. While the impact of this landmark case on the hydrocarbon sector is vast, the wider implications across other sectors is unclear at this stage and will be one to watch.
To discuss how this ruling impacts you or any other planning matter, please contact the team.
