The essence of the Claimant’s case was that the appropriate assessments lacked complete, precise and definitive findings and conclusions capable of removing all reasonable scientific doubt as to the effects of the licensed activities on the Special Areas of Conservation (“SACs”) and Special Protection Areas (“SPAs”) affected by the licences.

Five grounds had been pleaded originally. The claim proceeded on four of these grounds (G1, G2, G4 and G5) and the Claimant applied for permission to add an additional ground (G6).

Mould J rejected all grounds of challenge, accepting the Secretary of State’s arguments that the authorisation of the exploration for and production of oil and gas is a multi-stage consent process. Mould J found that the Secretary of State’s conclusion that there was insufficient information to determine the precise effects of the activities, and that any exploration and production activities would be subject to separate appropriate assessments, was one open to him [§§ 143, 177, 184, 224-225].

All references are to the judgment unless otherwise indicated. 

Legal and Factual Background

On 7 October 2022, the North Sea Transition Authority (formerly the Oil and Gas Authority) launched the 33rd Seaward Oil and Gas Licensing Round (“33rd Round”). Applicants were invited to bid for an “Innovate” licence. This licence is made up of three terms: (1) Initial Term (exploration); (2) Second Term (appraisal and field development planning) and (3) the Third Term (development and production). For more information on the 33rd Round, see this blog post by Gabriel Nelson.

The Initial Term has three phases: Phase A (geotechnical studies and geophysical data reprocessing only – i.e. no field activities); Phase B (acquisition of new seismic data and other geophysical data); and Phase C (exploration and appraisal drilling). Phases A and B are optional.

These licences grant licensees exclusive rights of searching and boring for and getting petroleum in the relevant areas over which they are granted. The licences, under s. 3 Petroleum Act 1998, are granted by the North Sea Transition Authority on model terms which are set out in the Petroleum Licensing (Production) (Seaward Areas) Regulations 2008. The model terms provide that additional consent is required from the North Sea Transition Authority before undertaking individual activities.

The North Sea Transition Authority cannot grant any Seaward Oil and Gas licence without the consent of the Secretary of State (reg. 5(A1) Offshore Petroleum Activities (Conservation of Habitats) Regulations 2001 (“Offshore Habitats Regulations 2001”). Regulation 5(1) of the Offshore Habitats Regulations 2001 require the Secretary of State to, before agreeing to the grant of any Petroleum Act licence, any consent or any authorisation etc. to undertake an appropriate assessment of the activities if he considers the licence, consent, authorisation etc. is likely to have a significant effect on a SAC or SPA, whether individually or in combination with any other plan or project. The appropriate assessments are carried out by the Offshore Petroleum Regulator for Environment and Decommissioning (“OPRED”).

Upon receiving the licence applications for the 33rd Round, the Secretary of State prepared a screening report. This report concluded that an appropriate assessment was required in relation to 96 of the 258 Blocks in relation to which applications for licences had been received.

On 31 July 2023, three draft appropriate assessments were published for (1) the Southern North Sea and Mid North Sea High, (2) the West of Shetland and Central North Sea and (3) the Eastern Irish Sea. The reports each concluded that the licensing would not have an adverse effect on the marine protected areas (“MPAs”) likely to be affected by the activities authorised by the licences.

The Joint Nature Conservation Committee (“JNCC”) and Natural England both responded to the consultation on the draft appropriate assessments, stating that they could not agree with the conclusion of no adverse effect. They were critical of the way that the appropriate assessments delayed consideration of a number of effects until later stages of the consenting process.

On 3 May 2024, the Secretary of State published the final appropriate assessment and his conclusion that the award of the licences would not have an adverse effect on the integrity of relevant SACs and SPAs. Licences were awarded on the same day. 

The appropriate assessments for the licences state that the licence:

“does not constitute any form of approval for activities to take place in the Blocks, nor does it confer any exemption from other legal or regulatory requirements. Offshore activities are subject to a range of statutory permitting and consenting requirements, including, where relevant, activity specific HRA under the Habitats Regulations”. [§ 85]

The appropriate assessments were conducted on the basis that one well would be drilled in each licence area [§ 92]. The scope of the assessments was described in the following way:

“The nature, extent and timescale of development, if any, which may ultimately result from the licensing of 33rd Round Blocks is uncertain, and therefore it is regarded that at this stage a meaningful assessment of development level activity (e.g. pipelay, placement of jackets, subsea templates or floating installations) cannot be made”. [§ 89]

The appropriate assessments also emphasised that the future consenting processes concerning exploration, development, and decommissioning would require further appropriate assessments, allowing for further mitigation measures to be identified. As a result, the appropriate assessments were limited to the assessment of the Initial Term.

Grounds of challenge

Ground 1: Accidents

Ground 1 concerned whether the Secretary of State had unlawfully failed to consider the impact of accidents on the MPAs, and whether he had complied with his Tameside duty [§ 112].

In relation to accidents, the appropriate assessments provided:

“Potential accidental events, including spills, are not considered in the AA as they are not part of the work plan. Measures to prevent accidental events, response plans and potential impacts in the receiving environment are considered as part of the environmental impact assessment (EIA) process for specific projects that could follow licensing when the location, nature and timing of the proposed activities are available to inform a meaningful assessment of such risks”.

The Claimant submitted that the failure to consider the risk of accidents on the basis that they were not part of the work plan amounted to an unlawful lacuna in the appropriate assessment. It also failed to follow the precautionary approach. To support this, the Claimant submitted evidence concerning the frequency of accidental spills reported to Government and demonstrating that the UK had higher than average dispersed oil concentration in its seas than other OSPAR signatory States [§ 117].

Mould J disagreed. He accepted the evidence that oil and gas activities in the UK continental shelf carried a risk of accidents. However, he rejected the Claimant’s contention that the Secretary of State approached the risk of accidents simply on the basis that they were not in the work plan. Mould J reasoned that, to the contrary, the appropriate assessments acknowledged the risk of accidents, but that their focus was on management of that risk, including by preventing that risk occurring and ensuring a planned response in the event that the risk materialises [§ 134].

Mould J emphasised that the court’s role in reviewing the judgments reached by the Secretary of State on whether a precautionary approach had been followed was not to substitute its own judgment as to what a precautionary approach required. Rather it was to consider if the Secretary of State had a reasonable basis, in the circumstances, for judging their approach to be properly precautionary [§ 136]. This approach to reviewing the Secretary of State’s judgment was consistent with the approach outlined in R (Champion) v North Norfolk District Council [2015] UKSC 52 and summarised by the Court of Appeal in R (Wyatt) v Fareham Borough Council [2022] EWCA Civ 983 which Mould J had set out earlier in his judgment.

Mould J found that the Secretary of State had a reasonable basis for concluding a sufficiently precautionary approach to the risk of accidents had been applied. At the point of granting the licences, there was insufficient information to meaningfully assess, manage and plan for the risk of accidents. As such, it was perfectly appropriate to delay the consideration of accidents until the appropriate assessment for the specific oil and gas activities for which the licensee later sought consent [§§ 136-143].

Ground 2: Climate change

The issues under this ground were whether there was a failure to adequately consider the impacts of climate change on the “increasingly fragile MPAs” and, following R (Finch) v Surrey County Council [2024] UKSC 20, whether scope three emissions needed to be included in the assessments [§ 144].  

Mould J rejected both complaints.

In relation to MPAs, the essence of the Claimant’s argument was that the appropriate assessments failed to engage with the scientific evidence regarding climate change. Both the Claimant and the JNCC had submitted scientific evidence to the Secretary of State following the publication of the draft appropriate assessments. The Claimant contended that the brief analysis of these papers showed this scientific evidence had been “disregarded” [§ 161].

Mould J accepted that in light of Case C- 258/11 Sweetman v An Bord Pleanála, ECLI:EU:C:2013:220, [2014] PTSR 1092, appropriate assessments needed to take into account evidence that the favourable status of a protected site is under pressure from other processes [§ 166]. This included taking into account climate change.

However, he found that the discussion of the relevant scientific material in the appropriate assessments showed no misunderstanding of or failure to engage with the findings and conclusions of the scientific evidence presented.

The conclusion reached by the appropriate assessments on climate change were three-fold:

“(1) Climate change is already affecting the marine environment, including its flora and fauna, in UKCS [UK Continental Shelf].

(2) In the longer term - “the coming decades” – climate change is likely to have effects on the marine environment, including its flora and fauna, in UKCS resulting in impacts on qualifying features of MPAs.

(3) It is not possible to give specific, as opposed to general consideration of the impact of climate change on MPAs, given the absence of information as to how climate change is affecting their qualifying features.” [§ 173]

Mould J determined that these conclusions were both consistent with and a reasonable response to the evidence presented. The advice by JNCC, according to Mould J, was general in nature and did not provide any specific evidence as to how climate change is affecting the qualifying features of the MPAs under consideration. As such, providing more detailed analysis was not necessary [§ 177].

The second strand of the Claimants argument was that following Finch, the appropriate assessments should have assessed the scope three emissions of the oil and gas activities would which be granted licences.

With regard to this argument, Mould J rejected the argument that the analysis of the Supreme Court concerning the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (the “EIA Regulations”), could be read across to the various regimes protecting habitats. The EIA Regulations require assessment of the likely significant effects of a project on the environment. The EIA Regulations direct assessors to consider ‘indirect, secondary, cumulative, transboundary…’ effects. This necessarily broadens the scope of an environmental impact assessment [§§ 179-180].

The purpose of the inquiry under Offshore Habitats Regulations 2001, in contrast, is tightly focused on the MPA at issue. The Secretary of State’s evidence was that it was not possible to attribute the effects of GHG emissions from oil and gas activities carried out pursuant to the relevant licences to any one or more specific MPA. Mould J highlighted that the Claimant had not explained how this difficulty could be overcome. He accordingly rejected Ground 2 also [§§ 183-4].

Ground 4: cumulative and in-combination impact

The issue under ground 4 was whether the Secretary of State failed or failed adequately to assess the in-combination impacts of the licensed activities on the protected sites, contrary to regulation 5 of the Offshore Habitats Regulations 2001, and/or his Tameside duty [§ 186].

By way of background to this ground, the JNCC in their response to the draft appropriate assessments had stated that they were unable to agree with the conclusion of no adverse effects until the in-combination effects were assessed. Additionally, the JNCC were concerned that the draft appropriate assessments had taken a different approach to other industries. For instance, the need for plan level compensation was recognised by The Crown Estate in the preparation of the appropriate assessment for the Offshore Wind Leasing Round 4, and in the Scottish Offshore Wind Sectoral Plan [§ 188].

In response to these criticisms, the final appropriate assessments maintained that the development level activities could not be meaningfully assessed at the licensing stage as the location, timing, scale and nature of any development was unknown. The assessments were also updated to emphasise that the granting of future consents for activities was not automatic and would be dependent upon future applications, habitats screening and if appropriate, appropriate assessments [§ 195].

The Claimants argued that JNCC, the statutory nature conservation body, had raised serious concerns regarding the approach and assumptions of the appropriate assessment. Rather than addressing these concerns, the Claimant argued the approach of the Secretary of State was essentially to leave these issues unresolved.

Mould J also rejected this argument.

He considered that the statutory regime established a multi-stage consent process. The “legal and practical reality” was that even after a licensee was granted a licence, they would need to apply and obtain consent to undertake the activities in the licensed work programme. Any development and production activities would equally require further consent [§ 215].  

This was relevant as in a multi-stage consent process, where there is uncertainty at one stage of the decision-making process as to the in-combination effects, it is legitimate to defer the assessment of those effects until they are known with a sufficient certainty to conduct an adequate assessment [§ 218]. On the facts of this case, the conclusion that there was insufficient information to meaningfully assess the in-combination effects was reasonably open to the Secretary of State. This was because there was no information concerning the location, timing, scale and nature of any development.

Ground 5: reasons

This ground was closely connected to the other grounds of challenge insofar as it argued that the Secretary of State provided insufficient reasoning for departing from the advice of the JNCC in respect to climate change and in-combination effects.

Mould J was “quite satisfied” that the reasons given in the appropriate assessments and a separate letter by OPRED gave a sufficiently cogent explanation of the Secretary of State’s approach and disagreement with the JNCC [§§ 226-232].

Ground 6: straight to the second term licences

This ground alleged that the Secretary of State’s decision to defer the appropriate assessment of licences that authorised second stage activities was unlawful because it was based on an immaterial consideration. While Mould J granted permission to the Claimant to add and pursue this ground, he swiftly rejected it. He found that on a fair reading of the relevant document, which set out the various options considered by the Secretary of State, no immaterial considerations were taken into account [§§ 233-243].

Commentary

The Secretary of State’s principal approach to defending this claim was to focus on the stage of decision-making. His response to Grounds 1 (accidents), 2 (climate change), and 4 (in combination effects) relied to a lesser or greater extent on the basis that at this stage of decision-making no meaningful assessment could be made of accidents, climate change or in-combination effects.

Mould J accepted this defence. One can see why based on both domestic case law and that of the Court of European Justice (“CJEU”). Domestic case law emphasises that the court’s role in reviewing appropriate assessments is limited to applying a rationality review. CJEU case law, in particular the opinion of Advocate General Kokott in Case C-6/04 Commission v United Kingdom, ECLI:EU:C:2005:372; [2006] Env LR 29, emphasises how it is appropriate in a multi-stage consenting process to assess impacts on protected areas in a level of detail which reflects the stage of decision-making.

Nevertheless, an interesting consequence of this approach is that in this case the burden fell on the Claimant to show that it was possible to meaningfully assess the environmental effects of accidents, climate change or in-combination effects. Thus, in relation to climate change, Mould J seemed to place emphasis on the fact that the evidence before him concerning the impact of climate change on three seas at issue was general in nature. Notwithstanding the large volume of expert material he was presented with, he stressed that the Claimant had also not produced any evidence showing that the relevant qualifying features of the MPAs were being harmed by climate change. It seems that the only way the Claimant could have demonstrated the Secretary of State’s judgment was unreasonable would have been to demonstrate that it was in fact possible to assess the effects on the MPAs. 

This potentially places a significant evidential burden on the Claimant to produce expert evidence concerning MPAs, and the potential impacts of licensable activities such as oil and gas activities.

This is not the first time in recent months that the stage of decision-making has played an important role in determining the lawfulness of an authorisation of an oil exploration licence. In October 2025, the European Court of Human Rights handed down its decision in Nordic Greenpeace v Norway (app. No 34068/21) (see a blog post here). The case concerns Environmental Impact Assessment, as opposed to habitats assessment, and duties under Article 8 European Convention on Human Rights. As a result it is not directly comparable. However, it is notable that the ECtHR essentially accept an argument that environmental impact assessments can be deferred to a later stage in the consenting process when the effects of the relevant project will be known more precisely.

Of course, and as Mould J notes in his conclusion, this strategy of the Secretary of State – to defend the claim largely on the basis that the subsequent stages in decision-making will also be subject to habitats assessment – is likely to only encourage more scrutiny of those subsequent appropriate assessments [§§ 244-248].

Emma Rowland is a barrister at Francis Taylor Building.