What Integrating End-Use Emissions Into Environmental Impact Assessments Means for UK Oil and Gas Projects

On June 19, 2025, the British government published new guidance that, for the first time, requires oil and gas companies to consider end-use emissions associated with oil and gas production in their environmental impact assessments (EIAs) when applying for development consents (legal permits that allow for the construction and operation of major infrastructure projects).

This new guidance changes everything. It will ensure that the full effects of oil and gas extraction on the climate are recognized in consent decisions. Until now, EIAs have focused only on the emissions that occur in operating an oilfield, such as from fuelling support ships or powering rigs. But about 75% of the greenhouse gas (GHG) emissions associated with a barrel of oil occur when the fuel is ultimately consumed, such as in a car or airplane, which means the largest climate impact comes from the decision to extract the oil in the first place, rather than from a decision about how to extract it. It’s this impact that companies will soon be required to assess.

The new guidance is particularly timely, released just ahead of the International Court of Justice’s advisory opinion on climate which made clear that end-use emissions from burning extracted fossil fuels must be considered in project EIAs. In this sense, the United Kingdom was ahead of the curve and has set an example that other countries can follow. The guidance will be put to the test when the British government decides on the development consent for the Rosebank project, the United Kingdom’s largest undeveloped oil field, estimated to contain around 300 million barrels of oil.

The guidance responds to the Finch v Surrey County Council judgment of June 20, 2024, where the British Supreme Court ruled that planning authorities must assess “downstream” GHG emissions (Scope 3 emissions) as part of the EIA process for fossil fuel projects. The case specifically concerned oil extraction at Surrey’s Horse Hill site, where planning permission was granted without considering emissions from burning the extracted oil.

This deep dive unpacks the new guidance. In summary, it is robust, providing regulatory certainty over the approach to be taken to new fossil fuel projects. Arguments commonly brought up by the fossil fuel industry to justify new projects, arguments that commonly lack credible supporting evidence—such as market substitution arguments, “drop in the ocean” arguments, and carbon offsets and removals—are rejected or held to a high standard.

No Hiding Behind Substitution Claims

Market “substitution” is the idea that granting consent for a certain oil field will not cause an aggregate increase in GHG emissions, since production to meet market demand for oil and gas would come from another project elsewhere if the relevant field is not opened. In other words, it is the idea that proposed production would replace, rather than supplement, production elsewhere. Substitution arguments made by oil and gas industry players often lack credible supporting evidence.

Significantly, the new guidance is clear that substitution does not affect whether Scope 3 emissions need to be assessed in the EIA, following the judgment in Friends of the Earth v Secretary of State for Levelling Up. Housing and Communities (Whitehaven coal mine case). In other words, oil and gas companies may put forward substitution arguments, but Scope 3 emissions from downstream should be considered regardless. Companies may use substitution arguments to contextualize the emissions, but must back this up with credible evidence.

This is a highly effective approach. Stating the full emissions from a project provides transparency, clarity, and consistency. In the light of the net-zero goal, the correct comparison to be made is with no project, not with a project being claimed as worse or a “business-as-usual” scenario.

Presumption That All Oil and Gas Produced Will Be Combusted

In Finch, all parties agreed that it was inevitable that the oil extracted would be sent to refineries and the refined oil would eventually be combusted. But this is not a given in every situation. Oil and gas companies often argue that some of the extracted oil, for example, would be used to produce plastics or other petrochemicals.

The guidance states that the starting point is a rebuttable presumption that all produced oil and gas over the lifetime of a project will eventually be combusted. But even if developers choose to include evidence that not all oil and gas will be burned, they still must put forward an estimate of emissions based on the total combustion assumption. This approach prevents oil and gas companies from making false or unsubstantiated claims that the oil and gas will not be burned.

Significantly, too, the guidance makes clear that the end-use emissions should be presented against a "do-nothing" scenario (i.e., a "no-project" scenario). This recognizes that there will be no Scope 3 emissions if the field does not go ahead.

Scope 3 emissions include several other categories of emissions in addition to downstream combustion emissions, such as emissions from waste generated in operations, emissions from business travel, and emissions from investments. End-use emissions are Scope 3, Category 11 emissions. While a developer may choose to present other elements of Scope 3 emissions in addition to end-use emissions, the guidance says that those emissions should always be presented separately to avoid confusion. This is important because Category 11 emissions are by far the largest element for oil and gas fields, and are the most straightforward to assess, simply by multiplying the expected production by the appropriate emissions factor.

"Drop-in-the-Ocean" Arguments Rejected

Oil and gas companies have been known to make so-called "drop-in-the-ocean" arguments, i.e., that a given project’s emissions are so small compared with total global emissions as to be a drop in the ocean, so that the project consent should therefore be granted.

The guidance is clear that this approach will not be countenanced, because it “would not on its own provide a meaningful expression of the global effect of those Scope 3 emissions, because of the obvious difference in scale between individual projects and global emissions levels.”

Rather, the guidance requires an assessment of Scope 3 emissions in relation to global and national climate objectives and the current state of climate and global emissions reduction pathways. The impact must also be considered cumulatively with other existing and planned future projects in a global context. This approach aligns with IISD’s recommendation that the impacts of a project should be considered significant if the project is not consistent with credible 1.5°C scenarios or carbon budgets.

Offsets and Removals Subject to High Standard

The final point of note in the new guidance is that it raises the bar when it comes to the evidence required for so-called "mitigation" measures. There is little that can be done to mitigate Scope 3, Category 11 emissions from fossil fuel extraction projects other than compensating with carbon dioxide removals. The guidance agrees with this point of view, and states that any such emissions removal measures would need to be “transparent and easily verifiable at a project level (i.e., can be linked back to the proposed project).” They would also need to have confirmed permanence and be subject to robust third-party monitoring, reporting, and verification methodologies to ensure the measure is genuine and of high integrity.

Importantly, while the door is left open to the purchase of offsets, the guidance says it is unlikely that the purchase of carbon credits on the voluntary carbon market will be an effective mitigation measure.

The Guidance’s First Test: Rosebank

When it comes to the question of the effectiveness of this new guidance, the first test will come when the revised EIA for the Rosebank project is submitted and the decision on its development consent is made.

The Finch judgment was clear that EIA legislation does not prevent development consent being granted for projects that will cause significant harm to the environment. However, “it aims to ensure that, if such consent is given, it is given with full knowledge of the environmental cost.”

Rosebank certainly comes with a huge environmental cost when it comes to Scope 3 downstream combustion emissions. Uplift estimates that those emissions would amount to more than 200 million tonnes of CO2, more than the combined annual emissions of all 28 low-income countries.

Evidence shows that opening any new North Sea oil and gas fields is incompatible with achieving the Paris Agreement goal of limiting warming to 1.5°C.

 

Indeed, the world already has more oil and gas in existing fields than can be consumed while achieving the Paris goals. To follow through credibly on this new guidance, the British government should reject the consent for Rosebank.

International Significance

The guidance has international significance, representing the first time to this author’s knowledge that EIA law requires end-use emissions to be accounted for. Others are likely to follow, as other climate-leading countries will watch and learn from how this guidance is implemented and can replicate it. Effects on domestic oil and gas project consents aside, that role model impact could be the guidance’s biggest achievement.