The recent decision in Friends of the Earth Ltd v Secretary of State for Levelling Up, Housing and Communities & Ors [2024] is the first planning decision successfully challenged through judicial review on climate change grounds following the Supreme Court decision in Finch earlier this year, on which we commented here.

The judgment underlines the importance of the decision in Finch in judicial consideration of fossil fuel projects. It also further clarifies the importance of assessing the impact of the release of emissions when fossil fuels which are extracted are ultimately burned.

Background and Grounds of Challenge

Friends of the Earth (FoE) and South Lakeland Action on Climate Change (SLACC), brought appeals under s228 of the Town and Country Planning Act 1990 against a decision in 2022 by the Secretary of State (SoS) to approve planning permission for West Cumbria Mining Ltd (WCM) to build a new underground coal mine at a site in Whitehaven, Cumbria. The project would have been the UK’s first deep coal mine in more than 30 years. 

FoE and SLACC brought four successful climate related grounds for challenge before the court:

1. Following the Supreme Court’s decision in Finch, the SoS had erred in not factoring the downstream greenhouse gas emissions produced from burning of the coal mined from the Whitehaven site into the project’s Environmental Impact Assessment (EIA); 
2. The SoS wrongly concluded that the mine could realise a neutral or beneficial effect upon global greenhouse gas emissions by substituting the output from mining coal in the US;
3. The SoS failed to consider how granting planning permission for a new coal mine would harm the UK’s international reputation and status as a climate change leader;
4. The SoS failed to properly consider the viability of using carbon offsets to achieve a ‘net zero’ status for the mine.

Issue 1 – failure to consider “downstream” emissions

The Administrative Court found that the Environmental Statement (ES) and EIA process that WCM were required to complete must have taken into account the greenhouse gas emissions from combustion of coal produced at the mine, as “significant likely indirect effects of the project”. 

Information on emissions produced by burning the Whitehaven coal should have been considered, and (given the scale and significance of the emissions) that assessment was an “obviously material consideration” that should have been taken into account by the SoS before granting planning permission on the application.

As a separate and freestanding reason for the SoS’ decision to be quashed (irrespective of the conclusion reached on Issue 2, below), the Judge ruled that if (as WCM argued) the extraction of Whitehaven coal would result in an equivalent amount of US coal remaining in the ground (such that there would be no net increase in greenhouse gas emissions from the new mine), this effect needed to be assessed in accordance with the relevant regulatory framework.  There was no finding made by the SoS that it was inevitable that US coal would stay in the ground because (and to the extent that) coal from Whitehaven had been extracted. 

Issue 2 – the substitution argument

WCM argued that the Whitehaven coal would essentially replace expensive coal supplied from US coal mines to the UK and Europe steel-making market. 

The Judge noted that WCM had to establish that there was a “very high degree of substitution not far short of perfect substitution” and, “that there would be no other demand for the substituted US coal”. However, in the Judge’s view, these points were not addressed in WCM’s ES material. In turn, the SoS found that there would only be a partial substitution but had not reached a consistent view on the issue. As such, the apparent conclusion by the SoS that he did not need to decide whether there would be perfect substitution or not was legally flawed.  

Issue 3 and 4 – the “net zero” mine and international reputation

The SoS accepted WCM’s case that the Whitehaven mine would be likely to set a net zero target. This conclusion was based on the findings that the proposal would not result in an increase in greenhouse gas emissions (see Issue 1 and 2 above). Given the success of the Claimants’ legal challenges under Issue 1 and 2, the Judge concluded that the assumption that the mine would be net zero was also legally flawed. 

In light of the Paris Agreement, the Climate Change Act 2008 and the parties’ arguments, the judgment accepts that the international impact of granting planning permission for the mine represents a “principal important controversial issue”, placing a “legal duty on the part of the Secretary of State to give reasons explaining in a lawful manner how those issues were resolved”. The judgment also acknowledges that the signal sent by a grant of planning permission for the mine is a relevant planning consideration. 

Issue 4 – use of carbon offsets

WCM noted that it would purchase of carbon offsets in order to allow it to operate a “net zero mine”. On this issue, the SoS failed to deal with the Claimants' alternative case that the precedent effect of a net zero mine leading to other similar projects would depend upon further offsetting arrangements being entered into. This would be undesirable given that offsets are a finite resource. 

Comment

This decision confirms that, following Finch, the downstream effects of proposed developments will be scrutinised more closely, and is a reminder for developers to ensure that EIAs are scoped appropriately. 

The case also highlights the evidential burden on developers seeking to rely on substitution arguments. Developers will need to produce full documentation to demonstrate any claimed substitution effect. 

by Christopher Wenn and Emily Williams