The UK government plans to introduce new environmental guidelines for oil and gas companies operating in the North Sea. This move comes in response to a landmark Supreme Court ruling, which mandates that regulators must consider the Scope 3 emissions of future projects when granting approvals.
In June, the UK Supreme Court ruled that a local council had unlawfully approved an onshore oil drilling project without considering the emissions from the future use of the extracted oil as fuel. The ruling, which has significant implications for new UK oil and gas projects, emphasized that planners must assess the environmental impact of emissions produced when the oil is eventually burned.
The judgment stated, “It is an agreed fact that, if the project goes ahead, it is not merely likely but inevitable that the oil produced from the well site will be refined and, as an end product, will eventually undergo combustion, and that that combustion will produce greenhouse gas emissions.”
In response to this ruling, the Labour government announced on Thursday its intention to develop new environmental guidelines for oil and gas companies. The government believes these guidelines will provide stability for the industry, support investment, protect jobs, drive economic growth, and help the country meet its climate obligations as the North Sea transitions to a clean energy future.
Energy Minister Michael Shanks stated, “We will consult quickly on new guidelines that take into account the Supreme Court’s ruling on Environmental Impact Assessments. This will enable the industry to plan, secure jobs, and invest in our economy.”
Despite these plans to offer clarity to the industry, the government also announced that it would not contest the judicial reviews challenging the development consent for the Jackdaw and Rosebank oil and gas fields in the North Sea. This decision adds further uncertainty to these already approved projects.
Environmental groups Greenpeace and Uplift have filed lawsuits seeking judicial reviews to halt the development of the Rosebank and Jackdaw fields.
Earlier this week, Equinor, the operator of Rosebank, indicated that it is awaiting clarity on the UK tax regime from the Labour government before finalizing its strategy and committing to further investments in the UK North Sea.