An unexpected turn of events
Turn the clock forward a few weeks and Drax has come to the decision itself to suspend its expansion and to end commercial coal-fired electricity generation altogether at the Selby power station this month. It has decided instead to focus its energy on its carbon capture storage projects and realise plans to become a carbon negative company by 2030. The firm notably halved its absolute carbon emissions for the first half of 2019, compared to the same period the year before, which was largely due to its departure from coal towards biomass, carbon capture storage and hydropower.
In May 2018, Drax made an application under section 37 of the Planning Act 2008 for a development consent order (DCO) to build and operate two gas-fired generating units at its existing power station. The proposal was reviewed by a panel who advised that consent should be withheld in July 2019.
Nevertheless, the Secretary of State for Business, Energy and Industrial Strategy (BEIS), Andrea Leadsom, considered that the proposed development’s contribution to meeting the national energy need outweighed the environmental impacts of the project. The Secretary of State therefore made the Drax Power (Generating Stations) Order 2019. In May 2020, Mr Justice Holgate dismissed ClientEarth's judicial review challenge to the decision. On appeal, the Senior President of Tribunals, Lord Justice Lindblom, dismissed all of the three grounds on which ClientEarth was given leave to challenge, namely the interpretation of Overarching National Policy Statements for Energy EN-1 and the application of section 104(7) of the Planning Act 2008.
1. Interpretation of EN-1 on the approach to assessing an energy need
The court held that while ClientEarth’s argument in favour of a form of “quantitative assessment” may be appropriate in certain circumstances, it is not the only method (paras 66-68). The significance of a need under EN-1 is not “immutably fixed” and must be measured against a project’s actual contribution to satisfying the need for the relevant type of infrastructure. Accordingly, the Secretary of State was entitled to give “substantial weight” to the ‘need case’ rather than perform a quantitative assessment.
2. Interpretation of EN-1 on the approach to assessing GHG emissions
The judgment found that EN-1 construes that “CO2 emissions are not, of themselves, an automatic and insuperable obstacle to consent being given for any of the infrastructure” covered by the policy (para 87). Similarly, EN-1 does not preclude GHG emissions from being considered as an influential factor in a particular case. Lindblom LJ held it is possible in certain cases that GHGs may represent a significant, or even decisive, factor whether alone or in conjunction with another “adverse impact” (para 87). The decision importantly distinguishes the judgment of Mr Justice Holgate in which GHGs are considered incapable of being “treated as a freestanding reason for refusal” (para 169). In the present case, however, the Secretary of State appropriately interpreted the energy NPSs by determining the GHG emissions as a “significant adverse impact” (para 92).
3. Application of section 104(7) of the Planning Act 2008
This ground could only succeed with the success of the previous two challenges, as it relied on the court finding that a “quantitative assessment” of need was required. Lindblom LJ held the provision does not limit a decision-maker in their assessment of the policy in the energy NPSs. Therefore decision-makers are permitted to balance the proposal’s compliance with policy as they consider appropriate in the circumstances. The Secretary of State did not fetter her discretion in applying the balance and “no legal error was made” (paras 102-109).
ClientEarth confirmed at the time it would not appeal the decision to the Supreme Court. While the decision was disappointing, the judgment provided long-awaited lucidity to the assessment of highly polluting projects. The decision highlights that assessments have a standard by which to be scrutinised and can no longer be justified by mere planning policy. The ‘silver lining’ in the broader context of this decision is that decision-makers will be held accountable for their assessments of projects, which are increasingly instrumental to whether we realise Net Zero by 2050.
The company’s subsequent decision perhaps signals that the necessary shift in energy policy in the UK will be powered by both government policy, as well as by the decisions of individual companies to future-proof their production planning. Notwithstanding the fact that environmentally harmful activities remain lawfully justifiable, they may be increasingly considered indefensible in practice – for commercial or other reasons. The coalescence of both this top-down, and bottom-up pressure will be crucial to the UK making real strides towards meeting its climate objectives.
The transition to a low carbon economy is difficult to navigate and while it is positive to see private companies taking accountability, it is imperative that the government impose policies to ensure that the negative environmental outcomes are not simply displaced. The UK government has repeatedly delayed its long-awaited environment bill, which will seek to redraw the rules following departure from the EU. Each day, week, month of delay will make the government’s effort to achieve net zero by 2050 more challenging.
With thanks to Intern Amelia Kelly for co-authoring this blog.