Norwegian Court Rules Scope 3 Emissions Must be Properly Assessed

Norwegian Court Rules Scope 3 Emissions Must be Properly Assessed

A recent decision of the Oslo District Court in January 2024 has ruled that three approvals issued by the Ministry of Energy of Norway (Ministry) for the development and production of oil and gas fields were invalid. Notably, the Court did so on the basis that the Ministry had not considered combustion emissions (scope 3 emissions) in its assessment when deciding to approve the development of the fields.

Scope 3 Emissions

The decision is significant in that the Court recognised the importance of considering the substantial, and sometimes overlooked, impact that scope 3 emissions have on the environment. While emissions resulting directly from the operation of resource production facilities (scope 1) and those stemming from the production of the energy used to power these facilities (scope 2) are relatively well-considered in a regulatory sense, the sizeable contribution that scope 3 emissions have to climate change is an area that is largely unaddressed.

Unlike in Western Australia, Norwegian legislation provides that an impact assessment must be carried out in relation to scope 3 emissions prior to approval being given for oil and gas production. The plaintiffs in this case, being the NGOs Greenpeace Nordic and Nature and Youth, argued that specific assessments needed to be carried out in relation to scope 3 emissions for each of the three fields, as opposed to the Ministry’s position that a broad and non-specific scope 3 assessment was sufficient.

The Court found that all three decisions of the Ministry to approve the fields were unlawful, in part on the basis of a previous decision of the Supreme Court of Norway, as an impact assessment for scope 3 emissions was required for each of the fields. The Court stressed that impact assessment was required to not only ensure an informed and correct

basis for decision-making, but also to ensure that dissenting voices are heard and that the basis of decision-making is verifiable and accessible to the public.

The Court reiterated the findings of the Supreme Court, stating that the greater the consequences a decision has, the stricter the requirements must be for clarifying the consequences. Correspondingly, the greater the consequences the more detailed the judicial review of the proceedings must be.

Takeaways

While some regulatory bodies in WA such as the Environmental Protection Agency expect estimates of scope 3 emissions from proponents, there is no specific legal requirement to mitigate or consider scope 3 emissions. Notwithstanding this, the recent developments in Norway serve as a warning to decision-makers that do not appropriately consider scope 3 emissions that the usage of contemporary climate science, expert evidence and government policy can pose a threat to decisions to approve projects with high levels of emissions.

The case further highlights the fundamental nature of greenhouse gas emissions as having a cumulative, and global, impact. While no specific source of emissions can be directly attributed to the climate change impacts felt in WA, every individual emission contributes cumulatively to the negative climate change impacts on the WA environment. These developments in Norway demonstrate an acknowledgment by the judicial system that oil and gas burned in other countries affects the local environment.