Oslo District Court: the Ministry of Energy's approval of the development plans for the Breidablikk, Tyrving and Yggdrasil fields are invalid

The Oslo District Court rendered on 18 January 2024 its award in two cases that were subject to joint treatment by the Court; with the following summary conclusions;

• The Ministry of Energy's approvals of the development plans for the Breidablikk, Tyrving and Yggdrasil fields are invalid;
• The Norwegian State is prohibited from making other decisions that assume that the approvals of the development plans are valid before the validity of the approvals are legally final and in force.

Case 1) concerns the material question whether the Ministry's approvals were valid, whereas case 2) is an injunction case.

The reason for the invalidity conclusion in case 1) is in short that the Court has found that that there is a legal obligation to undertake an impact assessment of emissions from combustion of the exported petroleum (combustion emissions). Combustion emissions mainly take place abroad in other countries because the large majority of the produced petroleum is exported.

The requirements to the content of a development plan and impact assessment in the plan are set out in section 4-2 of the Petroleum Act and section 22a of the Petroleum Regulations. Although none of these provisions directly mention impact assessment of combustion emissions, the Court finds that an interpretation of these provisions in light of section 112 of the Norwegian Constitution concerning impacts of interventions in the nature and the EU Project Directive imply that impact assessments of combustion emissions shall be made as a part of development plans.

This case, also called Climate Case II, is based on the Supreme Court judgement in Climate Case I from 2020 (HR-2020-2472-P). The judgement in Climate Case I also addresses emissions but concerns assessments earlier in the process, at the time of opening an area for petroleum activities before any licenses have been awarded. The majority vote addresses such assessments in general and conclude that an assessment of the emissions should be made, but not necessary as a part of the opening of an area for petroleum activities, but that it should be a part of the approval of field development plans.

After the Supreme Court judgement the Ministry issued on 1 July 2022 an announcement that the administrative treatment of field development plans would be adjusted to demonstrating the evaluations of combustion emissions in future decisions related to the development plans.

A main issue in the judgement by the Oslo District Court is whether the announced new treatment of demonstration of the evaluation of combustion emissions are satisfactory in relation to the applicable legislation and the Supreme Court judgement in Climate Case I, or whether full impact assessments of this issue are required prior to decisions on the field development plan.

The approval of the development plan for Breidablikk was made after the Supreme Court judgement but before the Ministry's announcement of the adjusted administrative treatment of development plans. The approvals of the development plans for Tyrving and Yggdrasil were made after the announcement, and combustion emissions er addressed in the approval decision, but no impact assessments of the combustion emissions were made.

The Parliament (Stortinget) addressed the issue of treatment of combustion emissions in connection with the approval of the Yggdrasil development plan (which had to be treated by the Parliament due to the level of the development cost) but did not include an impact assessment of this issue. The Court finds that irrespective of this, the requirement for impact assessments followed the legislation referred to above, and the Supreme Court's ruling in Climate Case I.

For the time being the judgement is not in legal force as it can be appealed within one month. The prohibition in the injunction case 2) concerns only the Norwegian State's ability to make certain other decisions and does not directly address the activities on the fields concerned. The licensees in the fields were not party the case. For the field in production, Breidablikk, the production takes place on a separate production permit which was not made subject to the case. The Breidablikk field has a production permit until 31 December 2024 and this production permit is not impacted. If the present judgement by the Oslo District Court should become final and in legal force new approvals of the field development plans including impact assessment of the combustion emissions may be required for the Ministry to issue new production permits for the relevant fields.