An advisory opinion delivered by the European Free Trade Association (EFTA) Court in proceedings between the Norwegian State and Greenpeace Nordic and Nature and Youth Norway clarifies that downstream (Scope 3) greenhouse gas (GHG) emissions must be assessed as part of Environmental Impact Assessments (EIAs) before development consents for oil and gas projects are granted.
This opinion aligns with the UK Supreme Court's landmark ruling in R (on the application of Finch on behalf of the Weald Action Group) v Surrey County Council and others[2024] UKSC 20 (the Finch decision) (see our blog post) and could have implications for existing development consent decisions in EEA States.
Although it is called an advisory opinion, the EFTA Court's decision must be followed by the Norwegian Court of Appeal and other EEA national courts confronted with the same question. The Court of Justice of the European Union (CJEU) is not bound by the EFTA Court's opinion, but it provides a strong indication as to the direction in which EU law will move.
Key points from the EFTA Court's advisory opinion
- Scope 3 GHG emissions from combustion of extracted oil and gas sold to third parties are "indirect effects" within the meaning of Article 3(1) of the EU Directive (2011/92/EU) (the EIA Directive) and accordingly must be assessed in EIAs.
- Under the European Economic Area Agreement (EEA Agreement), national courts are obligated to eliminate the unlawful consequences of any breach. Where consents were granted without assessing Scope 3 GHG emissions, all necessary measures should be taken (including possibly revoking or suspending approvals until adequate EIAs are conducted).
- The obligation to assess direct and indirect effects cannot be retrospectively dispensed with and so applies even if the omission did not affect the outcome of the granting of consent. This means that violations cannot be justified on the assumption that the outcome would remain the same.
- While the Finch decision was not explicitly considered by the EFTA Court, its reasoning in respect of the need to consider Scope 3 emissions aligns with the Finch decision in England, unifying English and EEA law on the inclusion of Scope 3 GHG emissions in EIAs.
Background
In June 2023, Greenpeace Nordic and Nature and Youth Norway challenged the Norwegian Energy Ministry's (the Ministry) approval of three North Sea oil and gas projects, on the basis that the EIAs for those projects did not consider Scope 3 GHG emissions from the "end-use" combustion of oil and gas produced by the projects after being on-sold to third parties: Greenpeace Nordic and Nature & Youth v. Energy Ministry (The North Sea Fields Case), case no. LB-2024-36810-2 (theNorth Sea Fields Case).
The Oslo District Court held that Scope 3 GHG emissions must be assessed under Norwegian law and the EEA Agreement. The Ministry appealed, and the Norwegian Court of Appeal sought an interpretative opinion from the EFTA Court (the supranational judicial body specifically for EEA States) on the scope of the EIA Directive. The request for an advisory opinion, albeit related to the North Sea Fields Case, ran separately from the case itself.
The EFTA Court issued its advisory opinion on 21 May 2025, and specifically deferred to the Court of Appeal to determine the substantive appeal of the case in light of its opinion. Proceedings will now continue in the Norwegian Court of Appeal, which is due to hear the substantive case in September 2025.
Issues referred to the EFTA Court
The Court of Appeal referred three questions to the EFTA Court:
- Whether GHG emissions from the combustion of oil and gas extracted and sold to third parties constitute an "effect" that must be assessed as part of an EIA under Article 3(1) EIA Directive;
- If yes, whether a national court must eliminate the unlawful consequences of an approval granted without such an assessment; and
- If yes, whether a national court can retroactively waive the obligation to assess Scope 3 GHG emissions if it is shown that the procedural failure did not affect or influence the decision outcome.
Question 1: Scope of environmental effects to be assessed under Article 3(1)
The EFTA Court determined that Scope 3 GHG emissions released from the combustion of oil and gas as part of an extraction project and sold to third parties constitute "indirect effects" of a project within the meaning of Article 3(1). This is because, objectively, combustion (even if abroad) is a reasonably foreseeable result and among the likely significant effects of the project. It must therefore be subject to an EIA prior to the granting of development consent.
The court noted that the scope of the EIA Directive is very broad, aiming for an overall, comprehensive assessment of the environmental impact of projects, covering direct, indirect, cumulative and transboundary effects, including those on climate. The court therefore held that an EIA must include an analysis of the cumulative environmental effects of foreseeable and likely events following the project's completion (including refining) to the extent necessary to cover all notable impacts of the project itself. However, this analysis should not extend to alternative projects outside the project's scope or speculative analyses of indirect market effects.
The court further determined that the fact that oil and gas extracted from a project may be put to a variety of uses does not exempt it from the need to conduct an EIA. Indirect effects need only be "likely", rather than certain, for the obligation to conduct an EIA to apply. In this regard, the opinion goes further than the Finch decision, where the certainty of downstream use was an agreed fact.
Question 2: Remedies for breaches
Though the EIA Directive does not specify required State actions for breaches, the court held that under Article 3 EEA Agreement, States must ensure EEA law's effectiveness, including nullifying unlawful consequences such as consents issued without proper EIAs. National authorities may revoke or suspend consents, and courts should interpret national law to permit this.
However, regularisation after the fact, such as a retroactive validation of consents, remains possible, albeit only in exceptional circumstances.
Question 3: Retroactive waiver of assessment
The EFTA Court confirmed that national courts cannot retroactively dispense with (or bypass) the obligation to assess direct and indirect effects of a project under Article 3(1) EIA Directive, even if the omission allegedly did not affect the decision's outcome. Where there is a procedural defect in an EIA that does not affect the decision's outcome, this may not require annulment or suspension of that consent. However, this does not apply to substantive EIA obligations for assessing environmental effects which have an "obvious" effect on the decision-making process.
Comment
The EFTA Court's opinion has potentially significant consequences for oil and gas projects across the EEA, but it may also have even broader implications. Although the CJEU is not legally obliged to take the opinion into account, as an interpretation of EU law it appears highly likely that it would be considered should there be EU cases on the same issue.
In addition, the clarification regarding retroactive waiver could have implications for recently consented projects.
In the Finch decision, the UK Supreme Court confirmed the need to assess Scope 3 GHG emissions within EIAs, but the court was not required to assess whether the release of GHG emissions from combustion was a likely effect of the project because, in that case, it was an agreed fact that all of the oil produced would be burned, releasing GHG emissions. However, in the recent decision of R (on the application of Alison Caffyn) v Shropshire Council & L J Cooke & Son [2025] EWHC 1497(Admin) (see ou rblog post), the English Administrative Court adopted a very similar standard of "likely" causation to that adopted by the EFTA Court (as explored above). Therefore, it appears that English and EEA law are harmonised insofar as Scope 3 GHG emissions relating to commercial oil and gas projects are required to be considered at the EIA stage.
Given the reliance on the EEA Agreement to support the need for measures to remedy any failure to carry out obligations even if the outcome would be the same, the consequences in England are less certain. It is expected that, given the availability of Government guidance on the need to consider Scope 3 GHG emissions within EIAs following the Finch decision, matters would not reach that stage
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