National Policy Statements – all change

The year started with a bang as the then Secretary of State for Energy Security and Net Zero designated the long overdue revisions to the suite of energy National Policy Statements, the original versions of which had been around since 2011.  Familiarity with those NPSs bred contempt, however, and the aging policy hadn’t kept up with technological advancements and legislative change – including the all-important commitment to net zero.  This meant spending time and resources rehashing need cases and policy questions at examination, and resulted in an increased risk of challenge on policy grounds to decisions on NSIP development. 

The long overdue designation of updated energy NPSs (and, in May, the National Networks NPS which deals with road, rail and strategic rail freight interchange projects) brings greater certainty to developers, authorities and other parties interested in those areas and is to be welcomed.  Labour’s manifesto recognised the importance of a clear policy framework and promised further new NPSs.  One challenge for the new government – which previous administrations have certainly failed to achieve – will be to keep those NPSs up to date.  The requirement to review NPSs every five years already exists, but the will to do so has, to date, been lacking.

Onshore wind is back in the picture

Sticking with policy, Ed Miliband, the new Secretary of State for Energy Security and Net Zero, marked his first day in his department by issuing a written policy statement on onshore wind.  Noting the government’s commitment to “doubling onshore wind energy by 2030”, the Secretary of State removed with immediate effect the de facto ban on onshore wind development in England which has been in place since 2015. 

The block on onshore wind took the form of restrictive policy tests in the National Planning Policy Framework which – although not an outright ban – required onshore wind development to meet higher standards than other forms of development and garner unanimous community support, something almost impossible to achieve for even the least controversial developments.  This draconian policy context therefore served as an effective ban on onshore wind projects and materially restricted the number of onshore wind projects being promoted and approved.

The written policy statement makes clear that these draconian policy tests no longer apply, and that onshore wind proposals will be have parity in policy terms with other energy development proposals. 

The NPPF – which Labour has promised will undergo a wide-ranging overhaul shortly – will be updated to reflect these changes.  Alongside that update, we’re told to expect a consultation on bringing large onshore wind proposals into the NSIP regime, followed by a revised NPS to put in place a policy framework to ensure certainty for all involved. 

The government appears to be mindful that onshore wind remains contentious and that community buy in is instrumental to its delivery.  To that end, communities will be empowered to participate in decision-making, as well as to “benefit from hosting local renewable energy infrastructure” through an update to the long-standing Community Benefits Protocol.  It will be interesting to see whether this update takes onboard the National Infrastructure Commission’s recommendations that government should develop a framework of direct benefits for local communities and individuals hosting NSIPs which would otherwise deliver few local benefits.  If so, one fundamental question will be how to structure such benefits in a way that deals satisfactorily with accusations that planning permissions can, in fact, be bought.

Finch – implications for environmental impact assessment

To the courts, now, and the culmination in the Supreme Court of the long-running Finch case.

The environmental impact assessment process requires the preparation by the applicant of an environmental statement which must assess the likely significant effects – direct and indirect – of the proposed development on the environment.  Given the fertility of this area as a ground for legal challenge, those preparing environmental statements (and those advising them or paying them) have long grappled with the extent to which indirect effects must be assessed.

In Finch, planning permission had been granted for an onshore oil drilling site at Horse Hill in Surrey.  The key issue at stake was whether the developer’s environmental statement had to assess the impacts of greenhouse gas emissions that would result from the end use of the oil extracted as well as those of the development itself.

The High Court found that the EIA process is concerned with the use of land for development and the effects of that use, and is not directed at environmental impacts which result from the use or consumption of an "end product" such as oil.  It also held that the EIA regulations did not require an assessment of the "downstream" greenhouse gas emissions arising from the combustion of the refined products made from the oil.

The Court of Appeal decided that, to require assessment, impacts on the environment had to have a sufficiently close connection with the development to be indirect effects of it.  In this case, the environmental effects of emissions arising from the combustion of the oil extracted at Horse Hill could reasonably be seen as far removed from the proposed development itself – not causally linked to it – because of the various intervening stages between the extraction of the crude oil and the ultimate generation of those emissions.

The case was appealed all the way to the Supreme Court.  In contrast to the High Court and Court of Appeal, the Supreme Court held that the planning authority’s decision not to require the assessment of the effect on climate of the combustion of the oil that would be produced from the development meant that its decision to grant planning permission for the project was unlawful.  The emissions that will occur when the oil produced is burnt as fuel are within the scope of the EIA required by law. 

The Supreme Court put to bed the High Court’s concerns that accepting that combustion emissions are environmental effects of the extraction of oil would “open floodgates” and render the EIA process unduly onerous and unworkable.  The majority judgment distinguished oil – which inevitably will be burnt as fuel – from other commodities such as iron or steel, which have many possible uses and can be incorporated into may different types of end product used for all sorts of different purposes.  The Supreme Court remarked that the EIA process does not require attempts to be made to measure or assess putative effects which are incapable of assessment.

The Supreme Court’s decision in Finch gives rise to some challenging questions for practitioners about what, going forward, is the necessary scope of a robust EIA process.  It’s arguable (as Lord Sales’ dissenting judgment did) that Finch expands the scope of environmental impact assessment beyond issues that a decision maker can sensibly be expected to address at a local level and which are more appropriately dealt with nationally.  It’s also fair to say that, with careful consideration and structuring, environmental impact assessments can be prepared so as to be robust and compatible with the findings of the Supreme Court. 

At the very least, Finch gives rise to some significant near to medium term uncertainty, and in the context of efforts to make environmental impact assessment (and the proposed successor, environmental outcome reports) more accessible and straightforward to interpret, that isn’t helpful.  The implications go beyond energy and infrastructure development, and are likely to affect development projects more generally.

What’s next?

While the first half of the year has given those involved in the infrastructure planning sector plenty of food for thought, the new government has promised yet more planning reform to come.  The mantra remains to streamline, accelerate and simplify.  The new Planning and Infrastructure Bill will set out to accelerate the delivery of high quality infrastructure, and legislation is promised to help the UK achieve energy independence and unlock investment in energy infrastructure.

The principle of reforms to streamline the delivery of infrastructure is welcome – but reforms have been promised for a long time with little in the way of material progress to show for it.  The Labour government’s challenge will be to legislate and implement quickly as further delays arising from the consenting system risk throttling the delivery of critical national infrastructure.

There’s much more to come in infrastructure planning and development planning more generally.  The Commons recess starts on 30 July and MPs return for the new term on 2 September before the party conference season starts ten days later – so expect announcements galore around these dates.  However long your summer break, the Hogan Lovells planning team will be on hand to keep you up to date.

Authored by David Wood.