The Ministry of Energy has proposed adjustments of future PDO processing related to combustion emissions

By Oslo District Court's judgment of 18 January 2024 in the so-called Climate Case II, the Ministry of Energy's approvals of the plans for development and operation of petroleum deposits (PDOs) for the Breidablikk, Tyrving and Yggdrasil fields were declared invalid. A preliminary injunction decision on the same date prohibits the state from making other decisions for these fields to the extent such decisions would presuppose a valid PDO approval, until the validity of the PDO approvals has been legally decided.

The District Court's main reasoning was that according to the Supreme Court's judgment in the so-called Climate Case I in December 2020, a legal requirement for combustion emissions to be impact assessed in connection with PDOs follows pursuant to Section 4-2 of the Petroleum Act, cf. Section 22a of the Petroleum Regulations, when interpreted in the light of Article 112 of the Constitution. This was also considered to follow from the EU's Project Directive.

The State has appealed the District Court's decision. At the same time, the Ministry of Energy announced that applicable to new development projects on the NCS, adjustments will be made in relation to the processing of combustion emissions.

Against this background, the Ministry of Energy circulated for public hearing on 2 May 2024 the following proposed amendments to the guidelines to the PDO and PIO (plan for installation and operation):

Global combustion emissions of oil and gas extracted from a development, as well as any effects of such combustion emissions on the environment in Norway, should be described.

Since the judgement in Climate Case I, the Ministry itself has made specific calculations and assessments of combustion emissions as part of the processing of applications for approval of PDOs. The proposal involves that such combustion emissions are impact assessed by the licensee in the PDO/PIO.

The Ministry of Energy will also prepare a technical study related to combustion emissions from oil and gas extracted from the Norwegian continental shelf. The study will form a scientific basis that can be used for future developments and other parts of petroleum policy. A consultation paper is enclosed with the proposed programme for the technical study.

The time limit for comments is 13 June 2024.

The proposal applies to future PDOs/PADs. For the three fields covered by the District Court's judgment, the Ministry inly refers to the fact that the State has appealed the judgment. A large number of other PDOs have been approved after the Climate Case I judgment. It has been argued that these PDOs are, in reality, in the same position as the PDOs included in Climate Case II. For all these PDOs, the proposal from the Ministry of Energy does not provide any further legal clarification.

Schjødt has leading lawyers within petroleum and administrative law and our team is available to assist companies that are either potentially affected by the two climate judgments or that wish to provide input during the consultation process.

The Ministry of Energy's consultation letter with attachments can be found here.