A Supreme Court ruling that a local council should have considered the full climate impact when issuing a new oil extraction licence – by following “easily performed” guidance from the Institute of Environmental Management and Assessment – could have implications for future fossil fuel extraction in the UK.

Surrey County Council only considered local environmental impacts and direct emissions from the oil well, when deciding whether to grant development consent for oil extraction at Horse Hill in Surrey.

But the Supreme Court has found downstream emissions – such as oil combustion – should have been considered in the Environmental Impact Assessment.

While this precedent for taking downstream emissions into account does not stop new oil drilling, it is something companies will have to consider when looking at new projects and decision makers take into account .

Martin Baxter, deputy CEO at the Institute of Environmental Management & Assessment, said: “This is massive news, and has potentially big implications.

“In effect, the Supreme Court has reinterpreted what must be taken into account from an environmental perspective when deciding whether to grant fossil fuel extraction licences – including the indirect carbon emissions downstream – highlighting guidance by the Institute of Environmental Management and Assessment that ‘could easily have been performed.”

One of the authors of IEMA’s Greenhouse Gas Emissions Guidance, James Blake, Director and Head of Sustainability and ESG at Turley, said: “It is fantastic to see this positive ruling which should significantly enhance the contribution of Environmental Impact Assessments in tackling the climate emergency by ensuring a more complete assessment of a project’s Greenhouse Gas effects.”

The Supreme Court judgement said the Surrey County Council planning authority initially said the developer “should consider the global warming potential of the oil and gas that would be produced by the proposed well site.” But later the council changed its mind and accepted as sufficient, an environmental statement that assessed only direct releases of greenhouse gases at the project site over the lifetime of the project and no assessment of the impact on climate of the combustion of the oil. As a a result, no information about the combustion emissions was made available to the public or considered by the council before it granted development consent for the project.

Supreme Court judges agreed in a three-to-two majority.

Lord Leggatt said it was “inevitable” that oil from the site will be burned, and the resulting greenhouse emissions were “straightforwardly results of the project” which should be considered.

Around 3.3 million tonnes of crude oil are expected from the six wells at Horse Hill over the next 20 years. It is estimated that oil would produce over 10 million tonnes of CO2.

The Supreme Court judgement said:

“It is also common ground that general estimates of combustion emissions can be made using methodology such as that described in guidance issued by the Institute of Environmental Management and Assessment. Estimating the combustion emissions which will occur if the project proceeds is not a difficult task. It could easily have been performed by the developer and has in fact been performed by Dr Jessica Salder, the council officer who reviewed the environmental statement, when she made a witness statement in these proceedings. All that is required is to identify from published sources a suitable “conversion factor” – which is the estimated amount of carbon dioxide emitted upon combustion of each tonne of oil produced. The total estimated quantity of oil to be produced is then multiplied by this conversion factor to calculate the total combustion emissions. In her evidence Dr Salder used a conversion factor of 3.22 tonnes of carbon dioxide for each tonne of oil produced.”