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UK environmental action continues – permission for Cumbrian coal mine quashed by the Court

November 2024

Background

The High Court’s ruling in the combined cases of Friends of the Earth Limited & Others (1) and South Lakeland Action on Climate Change – Towards Transition (2) v Secretary of State for Levelling Up, Housing and Communities, West Cumbria Mining Limited & Cumbria County Council [2024] EWHC 2349 (Admin) was handed down in mid-September 2024[1]. The decision, which addressed a planning-related challenge on climate change grounds, follows the Supreme Court’s decision in R (Finch on behalf of the Weald Action Group) v Surrey County Council and others in June 2024.

The legal challenges concerned the lawfulness of the Secretary of State’s (“SoS”) decision to grant permission for a new underground coal mine located at a site in Whitehaven, in Cumbria. The project would have been the UK’s first deep coal mine in over three decades. However, the development sparked controversy amongst community groups including South Lakeland Action on Climate Change – Towards Transition (“SLACC”), and Friends of the Earth (“FoE”). As a result, the two pursued actions were managed together (referred to here as “the Claimants”).

This is an important case for developers and investors involved in similar projects that are about to undergo, or are currently working through, planning review processes. It flags essential considerations for professionals involved in such projects, especially when assessing and/or attempting to reduce the environmental or climate change impact.

Successful grounds of challenge

The Court accepted most of the Claimants’ grounds for challenge and found that the SoS’s decision was unlawful due to the inadequate consideration of the likely greenhouse gas (“GHG”) emissions from the development, and their environmental impact. The Court ordered the earlier permission for the coal mine to be quashed.

The successful grounds of challenge advanced by the Claimants, which are briefly summarised below, included:

1. The impact of recent case law, namely Finch, and the failure to consider the likely effects of downstream GHG emissions produced from combustion of the mined coal;
2. The incorrect inference or conclusion that the UK mine would substitute the output from mining US coal and realise a neutral or beneficial effect upon overall global GHG emissions;
3. Global leadership impacts, including how granting planning permission for the new coal mine could negatively harm the UK’s role and reputation as a climate change leader; and
4. GHG emissions from mining and the viability of using carbon offsets to achieve a ‘net zero’ status for the mine.

The influence of the decision in Finch and the failure to consider downstream emissions

The judgment appears to have been the first to consider and be influenced by the decision in Finch, which effectively set a precedent for considering a range of emissions in Environmental Impact Assessments (“EIA”) for developments. For that project, the Supreme Court ruled that this included the downstream emissions from combusting the oil products produced, not just the impact of emissions from expanding or constructing the oil well. Find our article on that decision here.

In this case, the Claimants argued that the SoS acted in breach of the Environmental Impact Assessment Regulations (“EIA Regulations”). The Court determined that the Environmental Statement (“ES”) and EIA process required of the developer, West Cumbria Mining Limited (“WCM”), should have included details of GHG emissions arising from the combustion of coal produced at the mine, as they were “significant likely indirect effects of the project”[2] . Therefore, given the scale and significance of the GHG emissions produced, that information should have been considered by the SoS and their assessment was an “obviously material consideration” that should have been accounted for prior to granting permission[3]. Thus, the SoS had breached the applicable EIA Regulations by determining that the GHG emissions from burning coal produced from the site were not a significant or likely effect of the proposed development.

Whilst the newly elected government’s SoS consented to judgment on this point following the Finch decision, in July 2024 (shortly before the trial began), WCM continued to contest the appeals. Notably, the judgment acknowledges that the parties amended their pleadings in light of the Finch decision and/or used their skeletons to address its implications for the claims.

Substitution

WCM had submitted that the coal produced at Whitehaven would substitute coal supplied from US coal mines to the UK and Europe steel-making market. WCM indicated there would be no increase in GHG emissions (including downstream emissions) since extraction of the Whitehaven coal would result in an equivalent amount of US coal remaining in the ground. WCM also argued that the local coal would have a competitive advantage over US coal for the UK and European market, and that many US mines were “swing suppliers”, i.e. turning off production according to fluctuating demand.

The judgment considered that it “would be absurd“[4] to claim that there would be no net increase in GHG emissions as per WCM’s substitution argument: therefore, its suggestion that using or burning Whitehaven coal could not have a significant effect for the purposes of an ES or EIA (i.e. to eliminate the requirement for an assessment of GHG emissions from combustion of the coal) was also rejected. The Court considered that “the correct analysis is that both are significant matters…  if substitution of US coal would be a likely effect of the proposed project, both effects had to be assessed”[5] under the EIA Regulations. The GHG emissions from the burning of the Whitehaven coal, whilst an indirect impact, was considered significant and a scale worthy of material consideration.

Considering Finch, the Judge found that the developer should provide information to demonstrate any substitution effect claimed, or show no net increase in GHG emissions, as part of its ES. The developer needed to provide full information on the two effects claimed as balancing each other out or resulting in some form of offset. Accordingly, the Judge deemed WCM’s ES deficient, and not in compliance with the EIA Regulations. WCM needed to show a very high degree of substitution in support of its application and that there would be no other future demand for US coal. The underlying ES technical information did not properly address these points, meaning the assertion that there would be no net increase in GHG emissions was not properly considered or assessed.

The Court also held that the decisions of the Inspector and SoS contained internal inconsistencies. Despite the controversial issue regarding near-perfect or perfect substitution being a matter needing legal consideration, they failed to determine whether such a level of substitution would in fact be achieved. The SoS concluded partial substitution was possible but did not reach a consistent view on this issue. The SoS’s conclusion that there was no need to decide whether there would be perfect substitution was legally flawed. This was particularly important in view of the SLACC’s expert evidence and sensitivity analysis which showed that even a 1% net increase in GHG emissions from burning Whitehaven coal would double WCM’s estimate for the mitigated GHG emissions. For example, even if 90% substitution occurred, the 10% net additional GHG emissions from the end use of the Whitehaven coal would be over 11 times the estimate of the mitigated GHG emissions from the mine. Furthermore, the evidence indicated that if only 1.1% of the Whitehaven coal over the mine’s lifetime did not substitute for US coal, the end-use GHG emissions from that coal would equal the estimated savings in GHG emissions from reduced transport distances to the UK and European steel markets[6].

Global leadership impacts

The Claimants argued that opening a new UK coal mine would negatively affect climate change and diminish the UK’s status as a climate leader. This would in turn lead to reduced global ambition and increased global GHG emissions. The SLACC presented expert evidence inferring that allowing the mine would harm the UK’s climate diplomacy, resulting in diminished effort from other countries, even if the mine was ‘net zero’ (as claimed by WCM).

The SoS had accepted WCM’s submission that the coal mine would set a net zero target. This conclusion was based on the SoS’s findings that the development would not result in an increase in GHG emissions (see Grounds 1 and 2 above). However, the Judge decided that the assumption of a ‘net zero mine’ was also legally flawed, especially when considering the Claimants’ successful legal challenges on these Grounds.

Importantly, the potential global impact of granting permission for the mine was a key controversial issue in view of the requirements of the Paris Agreement, the Climate Change Act 2008 (giving effect to the UK’s net zero commitment), and the parties’ respective positions. This imposed a legal duty on the SoS to provide reasons in a lawful manner for how such issues would be resolved. The signal planning permission would send, and the effect it would have on the UK’s role in promoting climate change action  was also a relevant planning consideration. The Court concluded that the SoS did not fully consider the evidence or submissions on the impact of these issues. The reasons provided by the SoS on this were either illogical or irrelevant, and/or there was a failure to provide legally adequate reasons.

Offsetting to achieve a ‘net zero’ mine

WCM had indicated an intention to purchase carbon offsets to offset the mine’s operational emissions and enable it to operate a ‘net zero mine’. The Court found that the deliverability of WCM’s proposed offsetting arrangement was a relevant and material planning consideration that the SoS needed to address. Notably, however, the SoS erred in law when addressing the issues relating to WCM’s proposed scheme for offsetting the residual, mitigated, GHG emissions from the coal mine site.

Additionally, it was noted that the SoS failed to consider the FoE’s reference to government policies which stipulate that offsetting should occur within the UK, rather than relying on offsets sourced elsewhere. For example, carbon credits bought via the global voluntary carbon market do not count towards UK carbon budgets. The Claimants argued that this did not mean that the mine would be ‘net zero’. The SoS had also failed to respond to the Claimants’ alternative case that the precedent effect of a net zero mine could lead to similar projects being agreed with offsetting arrangements. However, any such approach would be undesirable in their view, since such offsets involve finite resources and should not be used to justify the expansion of fossil fuel extraction and use.

Outcome and next steps?

Although not all the grounds advanced by the Claimants’ legal challenge were accepted by the Court, it quashed the permission. Since this time, further questions have been raised as there were reports from the FoE that the Coal Authority had refused to grant the requisite underground coal mining licences for the development[7]. On 14 October 2024, the FoE released a statement that no appeal had been lodged or served by WCM within the applicable deadline[8].

We understand that WCM has the choice of abandoning the project or seeking a redetermination of the application for permission for the site by the SoS. If they pursue the latter however, the process and approach for such a redetermination will likely need to be clarified.

Other key takeaways

1. Potential implications for future projects: The judgment in this case, as well as in Finch, is likely to have broader implications for other fossil fuel projects, since it reinforces the need for thorough environmental assessments and considerations of likely GHG emissions, i.e. when fossil fuels are extracted on site and are ultimately burned. The FoE have already issued a legal briefing around this point and the decision may encourage future environmental activism and legal challenges to projects of this nature, scale, or type. Specifically, this decision:
   • Re-emphasises that, following Finch, the likely downstream impacts of proposed developments will be closely scrutinised, and could be successfully challenged.
   • Acts as a reminder for developers or applicants to ensure that ESs and EIAs are adequately scoped and completed appropriately on their projects.
   • Highlights the evidential burden upon developers seeking to rely on substitution or offsetting arguments in support of their positions. Although the judgment considered decision-making in the context of fossil fuel extraction, it may function as persuasive authority in other jurisdictions or on the issues of substitution and offsetting. Developers will undoubtedly be advised to review how these recent decisions influence future planning policy and legislative requirements and to maintain information and supporting documentation to demonstrate decisions or any claimed substitution and/or offsetting effect.
   • Suggests that consultants and other professional advisers will need to consider and advise on a range of GHG emissions and environmental impacts on relevant projects, including the extent to which such impacts are quantifiable, and so should be reported, or subject to planning process assessments.
   • May affect future decisions made by investors or financiers, i.e. concerning the types of projects and assets to fund in practice.
2. Increased public and legal scrutiny: The case reflects the increasing public and legal scrutiny of fossil fuel projects, with greater emphasis on environmental matters and the impact on climate change. Following the delivery of this judgment, environmental activists hailed it as a significant and meaningful triumph for environmental protection. This is also indicative of a broader trend in recent legal disputes concerning local or national government policies and decisions, including those related to ongoing live or upcoming construction and infrastructure projects.
3. Climate policy and net zero ambitions: The decision underscores the importance of aligning fossil fuel and other projects with the UK’s climate policy and legally binding net zero goals. It highlights the challenges authorities will face when approving such projects whilst meeting other environmental targets (including the importance of considering the broader environmental impacts and the role of the UK and such projects in global collaborative efforts in combatting climate change). As a result, certain press commentators and environmental activists believed that the ruling may lead to other UK fossil fuel extraction projects being challenged on similar grounds and have global ramifications for projects currently facing similar circumstances.

If you have any queries concerning this decision from a construction, engineering, or environmental viewpoint, please contact Michael Salau.

[1] Friends of the Earth Limited & Others v Secretary of State for Levelling Up, Housing and Communities, West Cumbria Mining Limited & Cumbria County Council and South Lakeland Action on Climate Change – Towards Transition v Secretary of State for Levelling Up, Housing and Communities, West Cumbria Mining Limited & Cumbria County Council [2024] EWHC 2349 (Admin) (“Judgment”)

[2] Judgment, paragraph 101

[3] Judgment, paragraph 102

[4] Judgment, paragraph 103

[5] Judgment, paragraph 103

[6] Judgment, paragraph 44

[7] Knock-out blow for Cumbrian coal mine? | Friends of the Earth

[8] No appeal over Cumbria coal mine judgment | Friends of the Earth

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