Upcoming Supreme Court Judgment could require authorities to consider “end-use” emissions when granting permission for new developments: LSLA writes to ICON

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Simon Bishop is a member of the LSLA and Commercial Disputes Partner at Hausfeld. (Image credit: Hausfeld.)

In the wake of a recent Supreme Court hearing on the legal case against Surrey County Council’s decision to grant planning permission for oil drilling at Horse Hill, Simon Bishop and John McElroy, both members of the London Solicitors Litigation Association (LSLA), tell ICON readers how cases like this highlight the need for businesses to prioritise issues relating to climate change.

 

A recent Supreme Court hearing on which judgment is awaited could require public authorities to consider the environmental impacts of “end-use” emissions when granting planning permission for developments producing fossil fuels or other materials with a high carbon footprint.

The appeal is brought by original claimant, Sarah Finch, on behalf of the Weald Action Group, against Surrey County Council (SCC), Horse Hill Developments, and the Secretary of State for Levelling Up, Housing and Communities. Interventions were heard from Friends of the Earth, Greenpeace and The Office for Environmental Protection in support of the appeal and from West Cumbria Mining Ltd, a company involved in a similar claim concerning the opening of a new mine, in opposition.

Ms Finch appeals the judgment of the Court of Appeal, which upheld the High Court’s dismissal of her claim for judicial review of the permission granted by SCC for an oil drilling development at Horse Hill, in Surrey. Ms Finch claims that the Environmental Impact Assessment (EIA) of the future development must account for the environmental impacts of the eventual uses of the extracted fossil fuel, as well as those produced in building and operating the extraction plant itself.

Ms Finch’s claim refers to the European Union EIA Directive 2014/52/EU, which in its annex states that the EIA “should cover the direct effects and any indirect, secondary, cumulative, transboundary, short-term, medium-term and long-term, permanent and temporary, positive and negative effects” of a project on the environment, on the grounds that these “downstream” emissions constitute a significant indirect effect of the development. If the appeal is upheld, authorities will be required in the future to consider the “end-use” impacts of extracted materials on the environment before granting permission for new UK-based fossil fuel production projects.

Similar claims of this kind, which seek to interrogate how emissions are considered in the context of planning decisions, are already on foot. In April, the High Court rejected a judicial review challenge brought by South Lakes Action on Climate Change and Friends of the Earth, concerning the granting of permission to develop a new coal mine at Whitehaven in Cumbria. The claimants in that case have exercised their right to contest this dismissal at a hearing which is eagerly anticipated. As such, this may present another potentially pivotal case for the future of fossil fuel and other carbon-producing developments in the UK.

Growth in climate litigation, in both the public and private sectors, brings new challenges for businesses.

Regulatory developments are happening apace and must be monitored closely to ensure ongoing compliance: the EU’s March 2022 Corporate Sustainability Due Diligence Directive establishes obligatory environmental and human rights due diligence requirements for corporations, while in the UK the Competition and Markets Authority (CMA) continues to investigate “greenwashing” in relation to its 2021 Green Claims Code and the Financial Conduct Authority (FCA) is developing a new set of Sustainability Disclosure Requirements to tighten restrictions on sustainability claims around financial products aimed at retail investors.

Much of the potential for disputes revolves around how emissions are measured, what is said (or not said) about the impact on climate that a particular business or undertaking may have, and the evolving regulatory landscape around these issues. Businesses should bear these principles in mind to ensure that (i) they have a comprehensive and holistic understanding of emissions and how they may affect their business in the context of, for example, supply chains, business expansion, and regulation; and (ii) any statements or representations that are made as to climate credentials are accurate and verifiable.

Amidst increasingly stringent enforcement of reporting and transparency requirements for businesses, cases such as R v Surrey County Council and others highlight the need for businesses to prioritise issues relating to climate change.

John McElroy is a Committee Member of the LSLA and Head of Commercial Disputes at Hausfeld (Image credit: Hausfeld)