Greenpeace Ltd v (1) Secretary of State for Business, Energy and Industrial Strategy and (2) the Oil and Gas Authority; and Uplift v (1) SSBEIS and (2) the OGA (North Sea oil and gas licensing)

These challenges concern the legality of the following decisions, all of which relate to the licensing of North Sea oil. • On Sep. 7, 2022, the UK government adopted its non-statutory Offshore Energy Plan (“the Plan”). This Plan was the subject of a strategic environmental assessment (“SEA”), known as “OESEA4”. • On Sep. 8, 2022, the government approved the design of its “Climate Compatibility Checkpoint” (“the Checkpoint”). The stated aim of this policy was to ensure that, before a new North Sea oil and gas licensing round is offered, “the compatibility of future licensing with the UK’s climate objectives is evaluated”. In approving the design of this policy, a proposed test was omitted. That test would have considered whether end-use emissions from the combustion of UK oil are expected to fall in line with the 1.5°C temperature target, if further licensing rounds are approved ("Test 5"). The decision to omit this test was challenged. • On Sep.16, 2022, the government decided that a further licensing round was compatible with the UK’s climate objectives. That was informed by departmental analysis by reference to the Checkpoint. • On Oct. 4, 2022, the Oil and Gas Authority (“OGA”) invited applications for offshore oil and gas licenses under section 3 of the Petroleum Act 1998, in what is known as the 33rd Offshore Oil and Gas Licensing Round. The OGA is a company wholly owned by the UK government which, since March 2022, has traded under the name “The North Sea Transition Authority”. These decisions were challenged in public law claims issued in December 2022 by environmental charities Greenpeace and Uplift. In April 2023 both claims were granted permission to proceed to trial. In July 2023 they were heard. The grounds under challenge were as follows: (1) the Secretary of State’s decision not to assess in OESEA4 end use GHG emissions from further oil and gas licensing rounds was irrational and/or in breach of the 2004 Regulations (“Issue 1”); (2) in breach of the 2004 Regulations the Secretary of State failed properly to assess “reasonable alternatives”, by failing properly to assess the alternative of not proceeding with further oil and gas licensing rounds (“Issue 2”); (3) the Secretary of State unlawfully failed to publish any reasons for deciding that a new licensing round would be compatible with the Climate Compatibility Checkpoint and the UK’s climate objectives (“Issue 3”); (4) the Secretary of State’s decision to approve the design of the Checkpoint was unlawful because it excluded Test 5 for reasons which were unlawful and irrational (“Issue 4”); (5) the Secretary of State acted irrationally by relying upon the Checkpoint when deciding (a) to adopt the Plan and (b) that the 33rd licensing round would be compatible with the UK’s climate objectives (“Issue 5”); (6) the OGA’s decision to carry out the 33 rd licensing round was unlawful because OESEA4 was unlawful (“Issue 6”); and (7) the authority’s decision was irrational because it relied upon the Secretary of State’s adoption of the Checkpoint without Test 5 (“Issue 7”). In October 2023 the High Court dismissed both claims, rejecting all the grounds of challenge: Issue 1: The decision in OESEA4 not to assess end-use emissions from further oil and gas licensing rounds was rational. There was no breach of the relevant SEA regulations. It is necessary to consider whether end use emissions are an environmental effect of the Plan in the context of the strategic environmental assessment regime, but it was for the planning authority to determine whether the GHG emissions from end use were properly to be regarded as “indirect” effects of the proposed development. Whilst the leading case of R(Finch) v Surrey County Council [2022] EWCA Civ 187 concerned environmental impact assessment, not SEA, the factual context and the two regimes were sufficiently analogous that important parts of the Finch analysis were applicable. However, Finch shows that the objectives or purposes of a measure, such as a policy or plan, do not override, or leave no room for, other considerations when reaching a judgment on whether a matter, such as end use emissions, is a likely significant effect of that measure. Decision-makers were therefore able to conclude that there was no sufficient causal connection between extraction and consumption. Here the Plan only set the framework for licensing oil and gas exploration and production in the North Sea. It did not set the framework for downstream development such as refinement and storage. The end-use emissions from uses of the extracted oil and gas were not therefore “likely significant effects” of the Plan under the SEA regulations. Further, it was lawful for the government to conclude there was an insufficient causal connection between new oil and gas licensing and end-use emissions, and to decline to assess such emissions on that basis also. (Judgment, paragraphs 89 to 116.) Issue 2: The government did not fail to properly to assess “reasonable alternatives” under the SEA regulations. That failure was said by the claimants to have resulted from a failure to properly assess the alternative of not proceeding with further licensing. However, there was no internal inconsistency between the approach taken by the Secretary of State to whether end use emissions should be assessed as a likely significant effect of the Plan and his comparison of reasonable alternatives. As to assessments of production emissions, these were matters of judgement. Nor was it unlawful for the government to have concluded that imports would have a higher emissions intensity than UK-produced hydrocarbons. (Judgment, paragraphs 117 to 136.) Issue 3: The failure to publish reasons for deciding a new licensing round is not incompatible with the Checkpoint (a non-statutory test) and the UK's climate objectives. There was no common law duty to give reasons. (Judgment, paragraphs 151 to 158). Issues 4 and 5: The reasons for omitting the end-use emissions test from the Checkpoint were lawful and rational. It was also rational for the government to rely on the Checkpoint when adopting the Plan and deciding the new licensing round was compatible with the UK’s climate objectives. The Checkpoint is not a statutory plan or policy. It is an informative, non-binding document to assist ministers in deciding whether to support or not support a further licensing round. It was a matter of judgement for the Secretary of State as to whether he considered there to be an appropriate test or benchmark for taking scope 3 emissions into account on a decision whether or not to support a new licensing round. (Judgment, paragraphs 137 to 150.) Issues 6 and 7: Further, grounds of challenge related to the OGA’s decision to carry out the 33rd licensing round necessarily failed, given the findings above (judgment, paragraphs 58 and 159).