The government has gained a reputation as being opposed to the oil and gas industry. In part this derives from the windfall tax. But its decision not to contest a court case challenging new developments sits on this continuum.

But it is not just the government that has been critical of the hydrocarbons industry. The courts are also taking issue with some of the expected environmental impacts.

The Court of Session will scrutinise the Rosebank and Jackdaw developments in early November, following the Finch ruling
The government has stepped back from defending the industry against these environmental challenges
However, the government will also face its own challenges on environmental grounds as it attempts to deliver its 2030 goals

Last month, when the Court of Session allowed Greenpeace and Uplift to challenge the Rosebank and Jackdaw developments, the environmental groups hailed it as a victory.

The organisations opposed granting licences for two developments. These are Rosebank, an oil and gas field west of Shetland, and Jackdaw, a gas field east of Aberdeen. They said the Edinburgh court had struck a blow against the “corporate greed” and “profiteering” of industry operators.

“The stakes in this case should not be underestimated,” said Tessa Khan, executive director of Uplift. She added that the proceedings are “about protecting ourselves against the worsening climate crisis and putting an end to oil and gas industry profiteering”. Greenpeace UK climate team leader Mel Evans agreed, saying the organisation “look[s] forward to our day in court” to “continue to fight the corporate greed of fossil fuel companies”.

Finch finding

The Court of Session case comes shortly after a UK Supreme Court case, in June.

Surrey resident Sarah Finch has argued that the local authority was wrong to grant planning permission for an onshore oil project operated by Horse Hill Developments without considering emissions from the eventual burning of its oil.

The Supreme Court agreed. It ruled all downstream emissions should have been included in the project’s environmental impact assessment (EIA). This made the council’s decision to grant planning permission flawed.

The Court of Session cases, due to be heard in early November, seek a similar outcome. Greenpeace and Uplift argue that the UK government illegally ignored downstream emissions. This relates to the granting of licences to Equinor and Ithaca Energy a licence for Rosebank and Shell for Jackdaw.

The government has conceded. In August, it announced that it will not fight the cases. Proceedings will determine if the operators need to resubmit their environmental assessments.

While the cases seem to strike a blow against the fossil fuel industry, it may not be that clear cut.

Wide or narrow

Catherine Gilfedder, a disputes partner at the international law firm Dentons, noted that judges in Finch said their decision could not be universally applied. She said the outcome of the Rosebank and Jackdaw actions will be similarly narrow.

“The Supreme Court was very clear that the decision was limited to the situation at hand,” she says.

“The Finch case came up in the context of an EIA but the focus was projects where the use of the end product is inevitable. In that case it was accepted that the only use the oil was going to be put to was to be combusted, leading to downstream emissions, but the court said that the decision would not open the floodgates. It’s also relevant to note that it was a split decision – it was a three-two majority going against the High Court and Court of Appeal so the question at issue evidently wasn’t easy to answer.”

Alex Minhinick, a planning partner at the law firm Burges Salmon, agreed.

“What is likely to limit the impact of the case in practice is what can reasonably be predicted to be the effects of the development and those downstream impacts,” he said.

“Whilst the Supreme Court proceeded on an assumed certainty [that] all the oil would be burned, in other cases the downstream effects may be harder to identify or not directly linked to the development itself. The range of causative matters to be considered will be broad, but future regulatory controls following the extraction of fossil fuels might be capable of disrupting the causative chain.”

Trouble ahead

John Buttanshaw, a partner in environment and climate change law at City firm Travers Smith, said there was trouble ahead. The individual decisions may only have a narrow scope. But the rise in court cases – and the courts’ hard line in holding governments to account on their environmental legislation – indicate how future projects will be handled.

“These cases are all looking at scope 3 [downstream] emissions but it’s important to see them in the wider context of a whole series of environmental challenges brought by NGOs,” he said.

“Embarrassingly, the government keeps getting its decarbonisation plan quashed in court for not being aggressive enough,” he said. It was defeated in the High Court in 2022 and 2024. These involved cases brought by Friends of the Earth, ClientEarth and Good Law Project.

“There are so many cases where the courts are finding in favour of environmental law. They are expecting very thorough processes to be followed and they are willing to hold the government’s feet to the fire by saying they are not complying with their own legislation. When you put these cases in that wider context, they are very important.”

The Rosebank development will be electrification ready — *Equinor’s proposed FPSO for the Rosebank development*

Balancing needs

Buttanshaw believes the Finch ruling will make companies pay closer attention to the environmental impacts of their planned work. He said the irony was the government may have to relax its environmental demands to meet its clean energy goals by 2030.

“Labour has said it wants the UK to be a clean energy superpower by 2030 and it will need this country to go bonkers on energy infrastructure if it is going to be anywhere near its manifesto commitments,” he commented.

“Planning is the number-one block to that. Environmental concerns make planning more difficult, for good reasons, so Labour needs to come out hard with what it wants to do with planning.

“[Whatever it decides] it will take two years to go through and people will hate it. There will be a lot of opposition and the government may have to override some environmental protections, albeit for an environmental good. That’s really hard to articulate – it’s really hard to message the very development-focused mindset that’s needed to get to net zero.”

Secretary of State Ed Miliband has already demonstrated a willingness to go into bat for solar power. In July, he overrode concerns about the impact of a solar plant on a local bird population.

Unanswered questions

The UK government appears to be taking a pro-environment stance by choosing not to fight the Greenpeace and Uplift cases.

But the operators of Rosebank and Jackdaw have refused to back down. They look certain to argue that the developments are needed for energy security. Equinor remains committed to progressing Rosebank. A company representative added it was vital for the UK. It “will bring benefits in terms of local investment, jobs and energy security”.

Shell, meanwhile, has said development at Jackdaw is “in line with all relevant consents and permits” and those “existing consents … should remain in place”.

How the court will view the arguments remains to be seen. It is clear that the Rosebank and Jackdaw cases are unlikely to be the last where the courts must clarify how future developments sit within a changing legislative landscape.

As Gilfedder said: “In the context of planning for future projects [organisations will have to] take the Finch decision into account when thinking about what goes into an EIA. But one of the many questions that are left unanswered is what emissions are deemed to be an inevitable consequence of projects.”

Where emissions are inevitable, she said, “I’d expect the principles of Finch to be applied. The point is that it’s not clear how those principles will be applied to other kinds of projects where emissions are not inevitable. The split decision from the Supreme Court is indicative of the complexity of that. The decision leaves lots of questions unanswered so I’d expect to continue to see cases being brought to try to clarify those.”

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