Supplementary guidance has been issued by the Department for Energy Security and Net Zero (DESNZ) for assessing the effects of downstream scope 3 emissions on climate from offshore oil and gas projects.

Background

The updated guidance follows a landmark judgment handed down by the UK Supreme Court on 20 June 2024, which found that a local authority’s decision to grant planning permission to expand oil production from a well in Surrey was unlawful because the end-use atmospheric emissions from burning the extracted oil were not assessed as part of the environmental impact assessment (“EIA”). 

The Scottish courts also considered this issue in the context of offshore oil and gas projects, specifically the consent for the Rosebank oil and gas field and the consent for the Jackdaw gas field. In its judgment issued in January 2025, the Outer House of the Court of Session, following the UK Supreme Court judgment, held that downstream emissions caused by the combustion of oil and gas to be produced by the fields should have been taken into consideration in the EIA process.

What’s required?

The Offshore Oil and Gas Exploration, Production, Unloading and Storage (Environmental Impact Assessment) Regulations 2020 (“the 2020 EIA Regulations”) require the Offshore Petroleum Regulator for Environment and Decommissioning (“OPRED”) to consider the environmental impacts of proposed oil and gas projects when deciding whether to agree to the grant of consent for such projects.

The recent court judgements have led OPRED to confirm that end-use emissions from burning extracted hydrocarbons need to be assessed as part of the EIAs undertaken and in any environment statement (“ES”) produced in support of an application for approval to explore for and produce oil and gas.

The updated guidance provides clarity on how the effects of scope 3 emissions will be assessed within the EIA process and what OPRED is likely to be looking for when giving its recommendations to the North Sea Transition Authority (“NSTA”). It is important to note that the guidance is not prescriptive and that developers are free to offer alternative approaches. The onus will be on the developer to ensure that ESs and screening direction applications are prepared using competent experts and that technical and legal input is sought when required.

Key areas of focus are:

1.    Substitution - any evidence that hydrocarbons extracted will replace, rather than add to, other hydrocarbons that would otherwise be extracted elsewhere, is not relevant, but can be used to contextualise the scope 3 emissions when evaluating the likely effects of the project.

2.    Transparency and clarity – the scope and extent of any assessment of the effects of downstream scope 3 emissions must be transparent and clearly explained in the ES.

3.    Early engagement – engagement with regulators at an early stage is encouraged prior to submission of the ES.

4.    Reasonable alternatives – a description of reasonable alternatives (in terms of design, technology, location, size and scale) should be included in the ES, along with an explanation of how the option selected compares with the environmental effects of those alternatives and how this has been factored into the justification for the selected option.

5.    Baseline scenario – this should include a description of the current state of the environment and its likely evolution if the project did not go ahead. A global baseline scenario must be considered when determining a baseline.

6.    Rebuttable presumption – it is presumed that all hydrocarbons produced during the lifetime of a project will be combusted, and those must be compared against a no project (“do nothing”) scenario. It is open to developers to present evidence to rebut the presumption and offer evidence to support non-combustion use of hydrocarbons.

7.    Evaluation of likely effects – the ES must consider the cumulative effects of the project with other existing and planned future projects, in a global context. That will involve looking at a project’s emissions against global climate objectives at the project level and in cumulation with other global projects, as well as against national objectives and targets, where appropriate.

8.    Mitigation measures – the developer must present a comprehensive description of measures envisaged to avoid, prevent, reduce or offset any likely significant adverse effects on the environment. They must not be speculative, and the developer will be responsible and accountable for their implementation.

9.    Existing development and production consents – where a change in production rate would alter the total amount of hydrocarbons to be produced over a project’s lifetime, any NSTA application for such change will require an assessment of the scope 3 emissions that will result from the increase or decrease in the production rate.

What’s next?

The availability of the guidance signals a resumption of the consideration of EIAs by OPRED. The decisions as to whether to grant consents for the Rosebank and Jackdaw fields require to be made again considering downstream emissions, following submission by the developers of updated ESs.

A decision is also awaited in the Oceana case, which involves a challenge by Oceana UK of 28 oil and gas exploration licences on the basis that the EIAs did not consider the impact of oil spills and harm to marine wildlife, as well as scope 3 emissions. A hearing took place at the High Court in London on that case in March 2025.

Get expert advice

Get in touch with one of the team if you need any advice on any of the issues raised in the judgement or on how the updated guidance may impact upcoming projects. 

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