Business Green quotes Rachael Davidson on the Supreme Court judgment of Finch v Surrey County Council

In a recent decision, 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.

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.

In the judgment, Lord Leggatt 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.

Touching on the implications of the judgment, Rachael Davidson, Senior Associate in our Real Estate & Disputes team, provides comment, and was subsequently quoted in Business Green:

After losing at the High Court and Court of Appeal, Sarah Finch has won her battle against Surrey County Council. Given the decisions of the Court of Appeal and High Court, this judgment is an unexpected victory for Finch and her backers, Friends of the Earth, and now planning permission for the large-scale expansion of oil production at a well site near Gatwick has been quashed.

"The Supreme Court found the emissions that will occur on combustion of the oil produced are “effects of the project” because it is known with certainty that the extracted crude oil would eventually undergo combustion, leading to greenhouse gas emissions. 

"This decision sets a clear precedent for fossil fuel developments where the end use of the product is clear and those resulting, inevitable, greenhouse gas emissions will need to be assessed.  As for other developments where the product has any number of possible end uses (for example, steel), the impact of the decision is tempered as the Court considered that a view could be reasonably taken that no meaningful assessment or estimate can be made of what emissions will ultimately result from its use and therefore downstream effects may be scoped out in some cases.

The Supreme Court judgment has, however, set a significant precedent for future EIA development; importantly, any decision to scope out downstream effects from an environmental assessment will need to be supported with robust reasoning.

Read the full article in Business Green here (subscription required).