The UK government has released new environmental guidance (on 19 June 2025) for North Sea oil and gas developments, requiring companies to include downstream (Scope 3) emissions—the greenhouse gases produced when their oil and gas are burned—in environmental impact assessments (EIAs) for existing projects assets.publishing.service.gov.uk+14reuters.com+14ft.com+14.

🔍 What’s in the new guidance?

1. Scope 3 emissions must be quantified
   Firms must estimate all downstream emissions—refining, transport, combustion—using a reasonable worst-case scenario. They also need to explain baselines, methodologies, and assumptions, and justify any claims of substitution (like reduced production elsewhere) assets.publishing.service.gov.uk+1iema.net+1.
2. Economic benefits & mitigation evaluated together
   Ministers will weigh downstream emissions alongside economic gains and carbon mitigation plans in their licensing decisions kslaw.com+15ft.com+15drillordrop.com+15.
3. Carbon removal over credits
   Any mitigation must involve high-integrity carbon removal (e.g., direct air capture or afforestation), not purchased offsets, helping avoid loopholes gov.uk+10ft.com+10slaughterandmay.com+10.
4. Transparency & legal resilience
   This framework responds to the 2024 Supreme Court “Finch” ruling (R. v. Surrey CC), which held that EIAs must include Scope 3 emissions to pass legal muster assets.publishing.service.gov.uk+13slaughterandmay.com+13kslaw.com+13.

🛢️ Impact on North Sea projects

• Jackdaw (Shell) and Rosebank (Equinor/Ithaca):
  Both are existing, previously licensed projects now required to resubmit EIAs incorporating full downstream emissions gov.uk+5reuters.com+5ft.com+5theguardian.com.
  Final decisions, expected this autumn, will rest with Energy Minister Ed Miliband reuters.com+1thetimes.co.uk+1.
• Industry vs. environmentalists:
  Operators welcomed clarity, but climate campaigners (e.g. Greenpeace, Uplift, Friends of the Earth) warn this could be used as a loophole to authorize high-emission projects .

🌐 Why this matters

• Legal certainty: Guards against court challenges by ensuring EIAs comply with the Supreme Court ruling drillordrop.com+2gov.uk+2assets.publishing.service.gov.uk+2.
• Net‑Zero alignment: Keeps the UK on track for its 2050 target by holding fossil fuel companies accountable, even for end-use emissions.
• Balanced transition: The Labour government, led by PM Keir Starmer, remains committed to the existing North Sea projects but promises no new exploration licenses ft.com+15reuters.com+15argusmedia.com+15.

✅ Bottom line

• Mandatory inclusion of Scope 3 emissions in EIAs for existing North Sea oil and gas licenses.
• Ministerial approval will now hinge on a combined assessment of emissions, economics, and mitigation plans.
• All this stems from the Finch Supreme Court ruling in June 2024.

Upcoming decisions around Jackdaw and Rosebank (due this autumn) will serve as the first real-world test of how this guidance is implemented.

Lesson Summary

The UK government released new environmental guidance on North Sea oil and gas developments on 19 June 2025.

• Scope 3 emissions must be quantified.
• Firms must estimate all downstream emissions using a reasonable worst-case scenario.
• Economic benefits and mitigation will be evaluated together.
• Any mitigation must involve high-integrity carbon removal, not purchased offsets.
• This guidance responds to the 2024 Supreme Court "Finch" ruling.

The impact on specific North Sea projects like Jackdaw and Rosebank is evident.

• Both existing projects must resubmit EIAs incorporating full downstream emissions.
• Final decisions are expected this autumn and will rest with Energy Minister Ed Miliband.

There is a divide between industry and environmentalists regarding the new guidance.

• Operators welcome the clarity but environmental groups raise concerns about potential loopholes.

Legal certainty, net-zero alignment, and a balanced transition are key reasons why this guidance matters.

• It guards against court challenges and holds fossil fuel companies accountable for end-use emissions.
• The mandatory inclusion of Scope 3 emissions in EIAs is a significant change in the regulatory landscape.

In conclusion, ministerial approval for existing North Sea oil and gas licenses now depends on a combined assessment of emissions, economics, and mitigation plans.

• The upcoming decisions around Jackdaw and Rosebank will test the implementation of this new guidance.