936: A DCO legal challenge and an EIA judgment

Today’s entry reports on two court cases, one involving the Wheelabrator Kemsley DCO project, and another concerning EIA.

Wheelabrator Kemsley

As we previously noted, the Secretary of State granted consent for part of Wheelabrator Kemsley project but refused consent for another part of it. The application had two distinct elements: an increase in the output of an existing energy from waste installation known as Wheelabrator Kemsley K3 from 49.9MW to 75MW (which didn’t involve any development) and the construction of a second installation known as Wheelabrator Kemsley North (WKN) which would generate 42MW. The latter was the subject of a section 35 direction on 27 June 2018. The former was consented, but the latter was not.

For further context, the inspector concluded that K3 should be decided under section 104 of the Planning Act 2008 and WKN should be decided under section 105, because the latter was below 50MW. He recommended that only K3 be approved, mainly because he considered the need case for WKN was not sufficiently made out and might draw waste from outside Kent to supply it, contrary to the waste hierarchy and local waste policy. The Secretary of State disagreed with the basis for making the decision, deciding that both WKN and K3 should be decided under section 104, but nevertheless reached the same conclusion as the inspector and granted K3 while refusing WKN. This is an important issue for DCO projects (directed under section 35) because, on the face of it, local plans are likely to carry greater weight under section 105.

A legal challenge was launched by the developer. During the course of the proceedings, the Secretary of State backtracked and said that they should have decided the WKN under section 105 all along, but that this would not change the outcome.

The High Court decided that the Secretary of State’s judgment was not wrong, and concluded that a section 35 direction does turn a project which ‘is not and does not form part of an NSIP into an NSIP.’ This was a bizarre conclusion for the reasons we previously highlighted. We noted that all but one of the decisions on DCO applications for projects that were brought into the regime via section 35 were decided under section 104.

In addition, the Secretary of State issues a section 35 direction only if he or she thinks that a project is of national significance. If the judge is right then an infrastructure ‘project of national significance’ is not a ‘nationally significant infrastructure project’, which doesn’t make sense. (Just one other amusing artefact we didn’t mention in our previous post, I’ve amassed failed section 35 directions via (non-vexatious) Freedom of Information Act requests from various government departments – please let me know if you would like me to share these with you – and the Secretary of State’s reasoning for not making a section 35 direction for the Stansted Airport decision states ‘I have reached the view that the [expansion of Stansted] is not a National Significant Infrastructure Project’ – note, it doesn’t say ‘development of national significance’; other directions also appear to conflate the two).

Permission was sought from the Court of Appeal to appeal the High Court judgment for the Wheelabrator project(s), but it has been refused. The court’s order dated 22 February 2022 dismissing the appeal sets out that:

Whatever is the correct interaction between s 104 and s 105, a direction under s 35 cannot change the size or scope of the particular project under consideration… The judge was right to stress the centrality of the NPS to the statutory regime and to the Parliamentary approval that it required. A direction under s 35 (or the making of a single application for more than one project), where the project in question falls outside the scope of an NPS, would cut cross that central feature of the regime

The only slight rowing back of the High Court judgment is to note that Secretary of State concluded, as a matter of planning judgment, that the adverse impacts of the proposed development would outweigh its benefits; and accordingly section 104(7) would have applied and led to the refusal. I’m not sure the summary dismissal adds anything to change our view, but I would note that there is seemingly a work around.

Under section 35Z(5) of the Planning Act 2008, the Secretary of State has the power to ‘provide for specified provisions’ of the Planning Act 2008 to apply to the development subject to a section 35 direction. In a recent section 35 direction, granted for the Continental Link Multi-Purpose Interconnector, the Secretary of State’s section 35 direction includes the following:

The Secretary of State has decided to exercise the discretion in section 35ZA(5) to direct that the Overarching National Policy for Energy (EN-1) should apply to the application, so far as is appropriate to the development for which development consent is sought, as it would to a generating station of a similar generating capacity as the capacity of the interconnector. The Secretary of State considers that doing so would assist in ensuring that the application was treated in a manner consistent with that which governs other applications for Nationally Significant Energy Projects considered under the Planning Act 2008.

So perhaps, going forward, the judgment on the Wheelabrator project(s) will be of academic value – provided the Secretary of State exercises their discretion under section 35Z(5).

EIA judgement

The Court of Appeal has upheld the decision of the High Court that Surrey County Council did not err when granting permission for an oil well in the county without considering the climate change impacts of the oil extracted there being eventually burnt. It came down to rationality of the decision that the later emissions were not indirect effects of the project.

It is an interesting judgment because of the three judges, one upheld the High Court decision, one disagreed and the third went along with the first ‘not without hesitation’, so it was a close run thing. The one who disagreed said that because the description of EIA development was ‘extraction of petroleum and natural gas for commercial purposes’, the burning of the oil was at least an indirect effect of the wider project. The leading judgment disagreed, saying indirect impacts still had to be ‘of the project’ at hand. We shall see if it goes any further. On the particular facts of this case, if it is correct that the emissions need not be assessed here, they probably never will be.

Incidentally, this is the case where the High Court confirmed that the requirement that an environmental statement be ‘based on’ a Scoping Opinion carries little weight. For context, the Scoping Opinion recommended that the environmental assessment should ‘consider … the global warming potential of the oil and gas that would be produced by the proposed well site’, but the Environmental Statement did not do so. This appears not to have swayed the dismissal by the Court of Appeal. Do we need to re-assess how much weight to attach to Scoping Opinions?

It was also the case where the BBC was found to be in contempt of court by broadcasting part of the Microsoft Teams remote hearing and was fined £28,000, considered in this judgement.