The future of fossil fuel projects

The High Court has quashed the planning permission for the Whitehaven coal mine, the UK’s first deep coal mine in over 30 years. Friends of the Earth and South Lakeland Action on Climate Change v Secretary of State for Levelling Up, Housing and Communities and others [2024] EWHC 2349 (Admin) is the first to deal with the recent Supreme Court judgment in R (on the application of Finch) v Surrey County Council [2024] UKSC 20; [2024] EGLR 29. The High Court has made it clear that, following Finch, the greenhouse gas emissions from fossil fuels must be considered at decision-making stage when granting consent. In making these decisions, decision-makers and the public are likely to be confronted with some extremely high carbon figures, making these projects even more controversial – if that is possible. A new coal mine for the UK? The Whitehaven proposals (first developed in 2014) were for a mine with the capacity to produce 2.78m tonnes of “coking coal” a year. This coal would be solely used for steel production. Michael Gove, the previous secretary of state, granted planning permission for the mine in late 2022 to much public and international outcry. The claimants challenged this decision shortly afterwards. The new Labour government had previously been critical of the decision to grant planning permission for the mine. It conceded the claim on one ground on 10 July 2024 (less than a week after winning the election), stating that there was an “error of law” within the decision to grant planning permission. The developer chose to continue with the proceedings. Environmental impacts of coal The environmental impacts of burning coal are clear and (generally) undisputed. The lifetime emissions from burning the Whitehaven coal were estimated by the claimants to be approximately 220m tonnes of CO₂ and the developer did not provide an alternative figure. Friends of the Earth has noted that this was more than half of the UK’s total emissions in 2022. When carrying out an environmental impact assessment for a proposed development, all of the likely significant effects of that development (including effects on the climate) must be assessed. The EIA accompanying the planning application for the Whitehaven mine did not take emissions from burning the coal into account. It instead assessed emissions arising from the operation of the mine, which came to less than 1% of the emissions from burning the coal. The developer agreed to offset these emissions in a section 106 planning obligation, claiming that the mine would be net zero. What the Supreme Court had to say The decision in Finch, handed down just a month before the court hearing, was at the heart of the Whitehaven case. The Supreme Court found that, on the facts of that case, it was inevitable that the crude oil extracted would be burnt and release greenhouse gases. On this basis, these emissions amounted to significant indirect effects of the project and should have been assessed in the EIA. The High Court’s approach In the Whitehaven case, the High Court quashed the permission for the following reasons: 1. Inevitable greenhouse gas emissions – the case had a very similar fact pattern to Finch and the release of emissions would be an inevitable consequence of extraction of coal from the mine. These emissions were a significant likely effect that should have been assessed and taken into account. 2. Substitution arguments – insufficient evidence had been provided showing that demand for the Whitehaven coal would replace other coking coals, meaning that there would be no net increase in emissions. The secretary of state was therefore not entitled to find that there would be substitution of supply. His findings on this point were also internally inconsistent. 3. Climate change duties – as the mine would release significant emissions, the secretary of state failed to consider the impact of the decision on the UK’s international leadership role to address climate change and also to whether it was appropriate to use offsets, which are a finite resource. 4. Offsetting – the secretary of state had failed to address UK policy that any offsets should be within the UK and so erred in law in its treatment of the developer’s proposed offsetting arrangements. A surprising decision? The judgment is a fairly straightforward application of Finch and not necessarily surprising. It was an agreed fact that the Whitehaven coal would be burnt and release greenhouse gases. Applying Finch, there was a clear causal link between the development and downstream emissions, which should have been assessed to inform public debate and decision making. This decision therefore does not really test the Finch judgment. It will be interesting to see how the courts apply Finch to more “borderline” cases with more uncertainty over how materials will eventually be used. What is clear is that there has been a fundamental shift in the way that EIA is carried out for major fossil fuel projects. Assessment of downstream effects for fossil fuel projects will now become the norm. A significant adverse effect does not mean that fossil fuel project cannot be granted permission. The court in this case was clear that the EIA regime is simply about ensuring that, if a consent is given, it is with “full knowledge of the environmental cost”. The developer can now ask the secretary of state to redetermine the planning application. This requires the political will to grant permission for a coal mine associated with substantial carbon emissions. Whether the new government, which has a national mission of becoming a “green energy superpower”, would be willing to do so remains to be seen. Alice Rowland is an associate in the planning and environmental team at Ashurst LLP Photo © Clemens van Lay/Unsplash