North Sea Oil and Gas Licenses Face New Climate Challenge from Marine Conservation Group Oceana

Marine conservation group Oceana UK ("Oceana") initiated judicial review against the UK government concerning the award of 28 offshore oil and gas exploration licenses in June 2024. Oceana argues that the decision failed to lawfully assess the emissions resulting from the eventual use of refined products of the extracted oil and gas (known as "downstream" or "Scope 3 emissions") and impacts on Marine Protected Areas ("MPAs"). The case was heard in the High Court on 26 and 27 March 2025 (as announced here), with judgment awaited.

Key points

•  The claim seeks to extend principles from recent landmark decision in Finch to the much earlier exploration licensing stage (read more on the relevance of Finch in our briefing here).
• It also operates outside the scope of the EIA Regulation that applied in previous cases, exploring whether the principles in Finch would apply in a different framework.
• This demonstrates how environmental groups are leveraging the precedent in Finch to explore the legal limits of assessing climate impacts in other government policies.

Backgound 

In October 2022, the Secretary of State for Energy Security and Net Zero, acting through the North Sea Transition Authority ("NSTA") launched the 33rd offshore oil and gas licensing round. Companies were invited to apply for exploration licenses across various areas of the North Sea.

Oceana alleges that the NSTA ignored expert advice in relation to licenses in MPAs, including from its own advisors, and began awarding licenses in October 2023. Subsequently, Oceana challenged the decision-making process leading to the grant of 28 exploration licenses – 21 of which fall within designated MPAs.

Oceana's claims

The core of Oceana's legal challenge rests on the argument that the government ignored expert advice and failed to assess the impact on downstream climate and MPAs. More specifically, on the following grounds:

•  Failure to assess accident impacts, including the potential of oil spills and discharges on MPAs and their designated conservation features, such as protected habitats and species.
• Failure to account for the ongoing impact of the climate crisis on the marine environments potentially impacted by the licenses and failed to consider Scope 3 emissions.
• Failure to assess the cumulative impacts of the licensed activities on the relevant sites.
• Failure to regard advice of the Joint Nature Conservation Committee and Natural England who reportedly objected to aspects of the licensing or assessments and requested improvements concerning several of the issues raised in the grounds above.

Building on the precedent in Finch

In R (Finch) v Surrey County Council [2024] UKSC 20, the Supreme Court found that Scope 3 emissions can be a significant environmental effect that must be assessed under the Environmental Impact Assessment ("EIA") Regulations when granting planning permission (see our blog on Finch here). Similarly, in the Jackdaw/Rosebank case, the Scottish Court of Session found the consents for two oil and gas project unlawful for failing to assess the environmental effect of downstream emissions (see our blog on Jackdaw/Rosebank here).

While Finch and Jackdaw/Rosebank dealt with development consents (like planning permissions), Oceana challenges exploration licenses. These are permission to explore rather than to develop and permission takes place before any confirmed discoveries or production plans. This makes the case different because:

• Quantification of Effect: due to the absence of a confirmed development project plan, it is challenging to quantify the potential environmental impact, including Scope 3 emissions, and the effect on marine environments, such as the consequences of accidental oil spills. As such, it may not be capable of assessment as part of the EIA process, as established to the Supreme Court in Finch.
• Causation: According to the causation test outlined in Finch, emissions may need to be "inevitable" to constitute a likely significant environmental effect of the project. The lack of quantifiable impact on both climate and MPAs may therefore make causation more challenging to establish here.

Next steps

• While the claim is in its early stages, it has attracted interest as this could impact the rules for granting exploration licenses.

No matter the outcome, the case also offers the opportunity for the courts to provide further clarification on how causation and remoteness are necessary to link projects and environmental impact, building on the decision in the landmark Finch ruling.

The authers would like to thank Dorothy Ho for her contributions.