Future of new oil and gas projects in UK thrown into doubt after landmark Supreme Court decision
The future of new oil and gas projects in the UK has been thrown into doubt following a landmark decision by the Supreme Court.
The court concluded the environmental impact of emissions from burning fossil fuels must be considered in planning applications for new extraction projects – not just the impacts of the emissions produced in extracting the oil.
The case hinged around an oil drilling project at Horse Hill in Surrey, granted planning permission by Surrey County Council in 2019.
Local campaigner Sarah Finch argued the environmental impact of the project should have taken into account not just the carbon emissions created in extracting the oil, but the environmental impact when they are burned.
She challenged an earlier Court of Appeal ruling dismissing her case, having also lost a legal battle in the High Court.
But the Supreme Court justices ruled on Thursday three to two in favour of allowing her appeal, and quashed the decision to grant planning permission for the site.
Environmental campaigner Sarah Finch brought about the appeal
Speaking after the ruling, former Surrey resident, Ms Finch said she was “absolutely over the moon” adding that it was a “welcome step towards a safer, fairer future”.
In his judgement, Lord Leggatt concluded: “In my view, there was no basis on which the council could reasonably decide that it was not necessary to assess the combustion emissions.”
He went on: “Given the agreed fact that all the oil produced would be refined, I see no reason why environmental impacts resulting from the process of refining oil should not in principle fall within the scope of the EIA for the extracting of oil.”
The court did not conclude that fossil fuel emissions were unlawful, only that they must be considered in an environmental impact assessment – a tool used in the planning process to assess the effects of a project on the environment.
Campaigners celebrate the landmark win outside court
In relation to the Horse Hill project Justice Leggatt said: “It is not disputed that these emissions, which can easily be quantified, will have a significant impact on climate. The only issue is whether the combustion emissions are effects of the project at all. It seems plain to me that they are.”
Given the burden of scientific evidence of the negative environmental impact of carbon emissions, the ruling that the downstream impacts of burning extracted oil and gas must be considered by anyone applying to extract them is significant.
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The decision, from the UK’s highest court, could have immediate implications for other fossil fuel extraction projects facing legal challenge by environmental campaigners.
West Cumbria Mining (WCM), the company behind a coal mine in Whitehaven approved by the government in 2022, clearly felt this could be a possibility as their lawyers intervened in this latest case.
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WCM did not respond to a request for comment on why it did so, but, if the campaigners’ appeal against the Surrey oil site wins next month, it could mean “that you have to completely reassess whether that coal mine in Cumbria can happen at all”, according to barrister Sam Fowles.
“It is extremely difficult to overstate the significance of this case,” Mr Fowles, who specialises in planning and environment law at Cornerstone Barristers, said.
It has the potential to trigger the “beginning of the end of… new fossil fuel extraction in the UK going forward”, he added.
The ruling could also have a bearing on offshore oil and gas projects such as the giant Rosebank oil and gas field in the North Sea.
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While planning rules offshore are different, EIAs are also required.
Charles McAllister, director of industry group UK Onshore Oil and Gas, called it “incontrovertible” that the UK needs some oil and gas beyond 2050, “even with huge growth in renewables”.
“It’s a case of where we got it from, not if we need or not,” he said.
Developers, or future governments, could argue that the economic or energy security benefits of extracting fossil fuels could outweigh the environmental impacts of burning them.
However, the ruling opens a new avenue for climate campaigners to challenge future oil, gas or coal projects in the UK.
The government is due to make a decision imminently on Rosebank.
Rachel Reeves has been urged by a think tank to cut national insurance and increase income tax to create a “level playing field” and protect workers’ pay.
The Resolution Foundation said the chancellor should send a “decisive signal” that she will make “tough decisions” on tax.
Ms Reeves is expected to outline significant tax rises in the upcoming budget in November.
The Resolution Foundation has suggested these changes should include a 2p cut to national insurance as well as a 2p rise in income tax, which Adam Corlett, its principal economist, said “should form part of wider efforts to level the playing field on tax”.
The think tank, which used to be headed by Torsten Bell, a Labour MP who is now a key aide to Ms Reeves and a pensions minister, said the move would help to address “unfairness” in the tax system.
As more people pay income tax than national insurance, including pensioners and landlords, the think tank estimates the switch would go some way in raising the £20bn in tax it thinks would be needed by 2029/2030 to offset increased borrowing costs, flat growth and new spending commitments. Other estimates go as high as £51bn.
Torsten Bell appearing on Sky News
‘Significant tax rises needed’
Another proposal by the think tank would see a gradual lowering of the threshold at which businesses pay VAT from £90,000 to £30,000, as this would help “promote fair competition” and raise £2bn by the end of the decade.
The Resolution Foundation also recommends increasing the tax on dividends, addressing a “worrying” growth in unpaid corporation tax from small businesses, applying a carbon charge to long-haul flights and shipping, and expanding taxation of sugar and salt.
“Policy U-turns, higher borrowing costs and lower productivity growth mean that the chancellor will need to act to avoid borrowing costs rising even further this autumn,” Mr Corlett said.
“Significant tax rises will be needed for the chancellor to send a clear signal that the UK’s public finances are under control.”
He added that while any tax rises are “likely to be painful”, Ms Reeves should do “all she can to avoid loading further pain onto workers’ pay packets”.
The government has repeatedly insisted it will keep its manifesto promise not to raise income tax, national insurance or VAT.
A Treasury spokesperson said in response to the think tank report it does “not comment on speculation around future changes to tax policy”.
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Chancellor urged to freeze alcohol duty
Meanwhile, Ms Reeves has been urged to freeze alcohol duty in the upcoming budget and not increase the rate of excise tax on alcohol until the end of the current parliament.
The Scotch Whisky Association (SWA), UK Spirits Alliance, Welsh Whisky Association, English Whisky Guild and Drinks Ireland said in an open letter that the current regime was “unfair” and has put a “strain” on members who are “struggling”.
The bodies are also urging Ms Reeves “to ensure there will be no further widening of the tax differential between spirits and other alcohol categories”.
A Treasury spokesperson said there will be no export duty, lower licensing fees, reduced tariffs, and a cap on corporation tax to make it easier for British distilleries to thrive.
Leave retailers alone, Reeves told
This comes as the British Retail Consortium (BRC) warned that food inflation will rise and remain above 5% into next year if the retail industry is hit by further tax rises in the November budget.
The BRC voiced concerns that around 4,000 large shops could experience a rise in their business rates if they are included in the government’s new surtax for properties with a rateable value – an estimation of how much it would cost to rent a property for a year – over £500,000, and this could lead to price rises for consumers.
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Latest ONS figures put food inflation at 4.9%, the highest level since 2022/2023.
The Bank of England left the interest rate unchanged last week amid fears that rising food prices were putting mounting pressure on headline inflation.
“The biggest risk to food prices would be to include large shops – including supermarkets – in the new surtax on large properties,” BRC chief executive Helen Dickinson said.
She added: “Removing all shops from the surtax can be done without any cost to the taxpayer, and would demonstrate the chancellor’s commitment to bring down inflation.”
Donald Trump has revealed that media mogul Rupert Murdoch and his son Lachlan could be part of a deal in which TikTok in the United States will come under American control.
The US president also namedropped Michael Dell, the founder and CEO of Dell Technologies, as a possible participant in the deal during an interview with Fox News, which is owned by the Murdochs.
“I think they’re going to be in the group. A couple of others. Really great people, very prominent people,” Mr Trump said. “And they’re also American patriots, you know, they love this country. I think they’re going to do a really good job.”
Mr Trump said that Larry Ellison, founder and CEO of software firm Oracle, was part of the same group. His involvement in the potential TikTok deal had previously been revealed.
President Donald Trump speaking to reporters outside the White House. Pic: AP/Mark Schiefelbein
White House press secretary Karoline Leavitt said on Saturday that Oracle would be responsible for the app’s data and security, with Americans set to control six of the seven seats for a planned TikTok board.
This comes after Mr Trump said he and China’s Xi Jinping held a “very productive call” on Friday, discussing the final approval for the TikTok deal, much of which is still unknown.
Once confirmed, the deal should stop TikTok from being banned in the US after lawmakers decided it posed a security risk to citizens’ data.
Officials warned that the algorithm TikTok uses is vulnerable to manipulation by Chinese authorities, who can use it to push specific content on the social media platform in a way that is difficult to detect.
Congress had ordered the app shut down for American users by January 2025 if its Chinese owner ByteDance didn’t sell its assets in the country – but the ban has been delayed four times by President Trump.
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Mr Trump said on Sunday that he might be “a little prejudiced” about TikTok, after telling reporters on Friday: “I wasn’t a fan of TikTok and then I got to use it and then I became a fan and it helped me win an election in a landslide.”
After the call with Mr Xi, Mr Trump said in a Truth Social post: “We made progress on many very important issues, including Trade, Fentanyl, the need to bring the War between Russia and Ukraine to an end, and the approval of the TikTok Deal.”
Mr Trump later told reporters at the White House that Xi had approved the deal, but said it still needed to be signed.
Representatives for the Murdochs, Mr Dell and Mr Ellison have not yet commented on a potential TikTok deal.
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