Environmental Impact Assessment and Climate Litigation: Reflections on EFTA Court Case E-18/24 (2025)

Nicolas Holoffe*

This blog post takes the European Free Trade Association (EFTA)’s Court’s 2025 Advisory Opinion in Case E-18/24 (Greenpeace Nordic) as a lens to examine how far Environmental Impact Assessment (EIA) regimes must go in capturing a project’s climate effects—especially indirect, downstream emissions. It first traces EIA’s evolution from a U.S. administrative tool (NEPA) to a global and EU standard (now codified in Directive 2011/92/EU, as amended by Directive 2014/52/EU), alongside the recognition of an EIA duty by international courts in transboundary-harm contexts. It then explains why climate change strains traditional EIA logic and how climate impact assessment has emerged within, and alongside, EIA frameworks. With that context, the discussion turns to E-18/24: the referred questions, the Court’s treatment of Scope 3 emissions, and its rejection of objections grounded in double counting, extraterritoriality, uncertainty, and “net” market-substitution reasoning. The article closes with the practical implications—screening vs. scoping, interactions with binding EU climate legislation and human-rights case law, and why putting full life-cycle emissions on the record may, in practice, narrow the space for authorizing new fossil-fuel projects.

Environmental Impact Assessment (EIA) has long served as a foundation of environmental governance worldwide. First introduced in 1969 through the U.S. National Environmental Policy Act (NEPA)—widely regarded as the first formal legislative framework for modern EIA procedures—this precautionary model quickly spread and was taken up in diverse legal systems. Today, EIA norms have been adopted in at least 183 countries and jurisdictions (see here), making it one of the most widely diffused environmental law instruments. Within decades, EIA became a global standard, influencing legislation from Cuba to Kenya and ultimately becoming a core pillar of EU environmental law via the EIA Directive 2011/92/EU, as amended by Directive 2014/52/EU.

The worldwide adoption of EIAs soon entered the realm of international adjudication. The ICJ has established, across cases such as Pulp Mills and Certain Activities, that states are required under general international law to conduct an EIA when an activity risks significant transboundary harm. Its recent Climate Change Advisory Opinion further confirmed that this obligation is an “expression of a more general rule requiring the assessment of risks to the environment” (para 297).

Despite their global diffusion and international recognition, one may wonder whether EIAs, as traditionally conceived, are truly suited for effectively addressing climate-related impacts. Unlike the direct, localized, and concrete harms typically assessed in EIAs, the effects of greenhouse gas emissions on the climate are diffuse, cumulative, and abstract, manifesting globally and across long timescales. These specificities were recently recognised by the ICJ which asserted “the risks posed by climate change have certain features that may affect the appropriateness of certain forms of environmental risk assessment” (para 298). It further held that “multifaceted and contextual nature of the due diligence standard” requires that “any EIA for the purpose of preventing significant harm to the climate system needs to take the specific character of the respective risk into account” (para 297).   

These issues have long been debated in academic literature, where the assessment of climate impacts within EIAs is often referred to as “Climate Assessment” (CA). CAs are a specific evolution of the EIA process, intended to address the unique characteristics of climate change. They focus on two dimensions: first, how a proposed project contributes to climate change (primarily through GHG emissions), and second, how the project itself is vulnerable to climate-related impacts such as sea-level rise or extreme weather.

In the EU context, the 2014 amendment to the EIA Directive marked a turning point, as it explicitly incorporated the two dimensions of Climate Assessments into EU law.

This framing necessarily brings GHG emissions into sharper focus—beyond direct emissions from the project itself (scope 1) and those associated with energy consumption (scope 2), to increasingly include scope 3 emissions. These cover upstream and downstream emissions, such as those resulting from the eventual combustion of extracted fossil fuels. The inclusion of Scope 3 emissions is particularly important, as downstream activities—such as the burning of exported oil and gas—usually represent the largest share of a fossil fuel project’s climate impact. According to the International Energy Agency, Scope 3 emissions account for around 80% of total greenhouse gas emissions from oil and 85% from gas, with end-use combustion making up the bulk of these emissions. Scope 3 emissions are also the most challenging to measure and control—an argument often raised against their inclusion in EIA litigation—as they are arguably too remote to be directly attributed to an extraction project and frequently occur outside the national territory.

While Scope 3 remains the most contested category, it has become central in recent litigation and legal commentary, as courts and scholars assess whether these emissions fall within the “likely significant effects” that must be addressed under EU law. 

The recent Advisory Opinion (Case E-18/24) of the European Free Trade Agreement (EFTA) Court sheds important light on these questions. The EFTA Court is the judicial body providing interpretations of European Economic Area (EEA) law for the EFTA states participating in the EU’s internal market. Its Advisory Opinions are non-binding on the referring courts and tribunals, but they’re highly persuasive in practice. Moreover, the EFTA Court and the Court of Justice of the European Union (CJEU) “monitor and pay attention to the work of each other’s courts [and] [...] by co-interpreting rules of different legal orders, [...] reinforce each other’s rules” (see here).

1. Brief Facts

In 2023, Greenpeace Nordic and Nature and Youth Norway brought a legal action challenging the approval of three Norwegian oil and gas extraction projects—Breidablikk, Tyrving, and Yggdrasil—located in the North Sea. The claimants argued that the Norwegian government failed to conduct a proper EIA in compliance with Directive 2011/92/EU, specifically by omitting an assessment of Scope 3 emissions, i.e., the GHG emissions that would ultimately be released when the extracted fossil fuels are burned by end users, often outside Norway.

The Norwegian Appeals Court referred three interpretative questions to the EFTA Court (para 38), given that the projects fall under the EEA Agreement, which integrates the EIA Directive into Norwegian law:

1. Do emissions from the combustion of extracted petroleum (Scope 3) qualify as “effects” under Article 3(1) of Directive 2011/92/EU, even if the fuels are sold and burned abroad?

2. If yes, must national courts annul or suspend a development consent granted without assessing such effects?

3. If yes, can a court waive the assessment obligation retroactively, if the outcome would not have changed?

The discussion that follows focuses on the first and most significant question, concerning the status of downstream emissions as “effects,” rather than the two subsequent procedural issues.

2. Scope 3 Emissions as Likely Effects

The three oil and gas projects clearly fall within Annex I, point 14 of the EIA Directive, which covers petroleum extraction exceeding certain thresholds. For such projects, an EIA is mandatory (para 60), and must address all likely significant effects, including those listed in Article 3(1). Yet, the Court noted that the Article 3(1) does not specifically refer to GHG emissions that will be released from petroleum and natural gas extracted as part of a project subjected to an EIA. 

In this light, a frequent objection is that EIAs must focus on environmental effects that are directly attributable to the project proponent, particularly those that the developer can control or influence. While Scope 1 emissions and—to a certain degree—Scope 2 emissions can be influenced through careful project design and operational decisions, Scope 3 emissions are generated by third parties, often located in different jurisdictions. For Guy Dwyer, including Scope 3 emissions in an EIA would thus incorrectly attribute responsibility and obscure the boundary between a project’s direct environmental footprint and the indirect impacts from end-users.

The EFTA Court explicitly acknowledged that significant environmental impacts may arise from subsequent events that are not directly performed or controlled by the project developer but are nevertheless likely and foreseeable effects of the project. The EFTA Court first observed case law from the CJEU that asserted for example that “a project to double an existing railway track [...] can have a significant effect on the environment, since it is likely to produce, inter alia, significant noise effects [...] [that] were not brought about by the works involved in doubling the railway track but by the foreseeable increase in rail traffic permitted precisely by the works involved in doubling the track” (para 64). The Court noted that the  CJEU subsequently applied a similar test to an increase in the activity of an airport and, consequently, in the intensity of air traffic, due to improvements made to the airport in the context of a project subject to an environmental impact assessment (para 64). 

Therefore, the critical legal criterion is not direct operational control but rather a demonstrable causal connection, making such effects reasonably foreseeable outcomes of the project. In this light, the Court draws a direct causal line between extraction and end-use emissions: “the release of greenhouse gas emissions is very likely to follow the antecedent action of extracting petroleum and natural gas [...]. If not for the project, the embedded greenhouse gases would stay below ground”. On that basis, “the combustion of the petroleum and natural gas extracted and subsequently sold to third parties are likely effects of the project”, which must therefore be identified, described, and assessed under Article 3(1) (para 69).

From this perspective, the EFTA Court aligns with the UK Supreme Court’s Finch v Surrey County Council and others decision which held that “[t]he fact that the combustion emissions would emanate from activities beyond the well site boundary which were not themselves part of the project was not a valid reason to exclude them. An impact is not precluded from being an effect of a project by the fact that its immediate source is another activity that occurs away from the project site” (para 102).

3. Addressing Norway’s Objections

The Norwegian Government challenged the EFTA Court’s conclusion that the downstream GHG emissions from the eventual combustion of the extracted oil and gas are ‘likely effects’ of the extraction projects by raising 3 objections—all were dismissed.

The first objection argued that combustion emissions are too remote to be attributed to the extraction project. They only occur after several intermediate steps—refining, transport, and storage—which are separate activities subject to their own EIAs under the Directive. The resulting end-use emissions are therefore presumed to be sufficiently assessed at those later stages, and don’t need to be reassessed during the initial extraction EIA in order to avoid a potential double counting.

The Court rejected this argument. It held that the possibility of future EIAs at later stages does not relieve the initial project developer from assessing foreseeable environmental effects that arise from the extraction itself (paras 71–72). Furthermore, the Directive does not prohibit overlapping EIAs at different phases of a fossil fuel project. Instead, it supports a cumulative approach when emissions can be reasonably anticipated early in the project cycle (para 72).

The Court also stressed two core procedural objectives of the EIA Directive. First, assessments must be conducted “as soon as it is possible” (para 75), meaning early enough to influence the decision-making process. Second, they must enable “effective public participation” at a stage “when all options are still open” (para 76). If downstream emissions are only assessed at a later phase, both objectives would be undermined. In short, deferring climate impact assessments would defeat the Directive’s purpose of ensuring informed, timely, and participatory decision-making.

In this sense, double counting is not a legal flaw but a deliberate feature of a precautionary and comprehensive EIA regime—where each project assesses environmental impacts from its own standpoint, even if the same emissions are evaluated in multiple assessments. As legal scholar Benoit Mayer notes, these assessments will serve different regulatory functions: for instance, a refinery may evaluate technology to reduce refining emissions, while the extraction project assesses the significance of enabling future combustion.

Some scholars (e.g. here), as well as the Norwegian Government in the present case, have invoked a related double-counting argument against the inclusion of indirect emissions in EIAs. They contend that such an approach risks undermining institutional coherence with the emissions accounting principles established under the UNFCCC and the Paris Agreement. Yet, as the EFTA Court notes, this objection conflates two distinct legal frameworks: “Whereas the Paris Agreement seeks to ensure that greenhouse gas emissions and greenhouse gas emissions reductions are not counted twice, the purpose of the EIA Directive is not limited in this manner as its purpose is not to divide responsibilities between States similarly to the Paris Agreement” (para 73). 

Closely related to this line of argument, the government also questioned the territorial scope of the Directive: could it legitimately require the assessment of emissions occurring abroad, beyond the extraction site?

National courts across Europe have adopted divergent approaches on this point. For example, the Norwegian Supreme Court previously ruled:

“When it comes to greenhouse gas emissions from combustion abroad after Norwegian petroleum export, […] the clear principle is that each state is responsible for combustion on its own territory” (para 159).

This restrictive interpretation of territorial responsibility for GHG emissions has also been echoed in other jurisdictions. For instance, the District Court of the Hague held that emissions from international aviation fall outside national climate obligations and must be addressed at the international level (point 4.4).

Nonetheless, this perspective is now shifting. The EFTA Court embraced a broader and more integrated understanding of environmental effects. It held that indirect effects must include secondary, cumulative, and transboundary impacts, including those occurring far from the extraction site, provided that they are both significant and likely (paras 82–85).

This position is consistent with the aforementioned Finch decision which emphasized that:

“The fact that an environmental impact will occur or have its immediate source at a location away from the project site is not a reason to exclude it from assessment” (paras 93–94, 97).

The second objection raised by the Norwegian Government was that combustion-related emissions are not certain. A significant and growing share of crude oil is used in petrochemicals or other non-combustion industrial processes. Therefore, they argued, these emissions should not be considered a “likely” effect under the Directive.

The Court again disagreed. It clarified that the legal threshold is likelihood, not certainty (paras 87–88). Even if some portion of the extracted petroleum is not burned, a substantial part is. This is enough to trigger the requirement to assess combustion-related emissions as likely effects under Articles 1 and 3(1).

This position reflects a broader judicial trend toward rejecting arguments based on the supposed unpredictability of indirect emissions. Courts across jurisdictions in cases such as Sierra Club, Gloucester, and WildEarth Guardians v. Zinke have repeatedly refused to accept that downstream emissions are too uncertain to be assessed.

In fact, the EFTA Court appears to go a step further by holding that it does not appear unduly burdensome to require developers to provide a reasoned estimate of the greenhouse gas emissions that are likely to result from the combustion of petroleum and natural gas extracted during the project (para 88). This echoes the UKSC’s approach in Finch, where the Court concluded that “[p]redicting downstream emissions is not a difficult task. It could easily have been performed by the developer” (para 81).

The third objection raised by the Norwegian government concerns the net environmental effect of the project. It argued that the significance of combustion-related emissions is unclear, since Norwegian gas might displace more polluting energy sources (like coal), or might be replaced by other suppliers if Norway does not extract. In a global, competitive energy market, the reasoning goes, a new fossil fuel project does not necessarily increase overall emissions—it simply substitutes for existing or projected ones. 

This so-called market substitution argument has found traction in legal scholarship (here and here) and is commonly raised in similar litigation. Certain courts have been receptive to this argument. The Norwegian Supreme Court held for example that “the net effect of the combustion emissions is complicated and controversial, since it is linked to the global market and the competition situation for oil and gas. If gas is replaced by coal, cuts in the gas export will have a negative CO2 effect” (para 234).

Some courts have even gone further by claiming that new projects may even reduce emissions—such as when natural gas is said to displace coal, a more carbon-intensive energy source. A striking example is the Alpha Coal Mine case, where the Australian Land Court of Queensland accepted unchallenged evidence that “if the alternate to coal from the proposed Alpha Coal Mine is primarily sourced from Indonesia, such coal is likely to create a higher net level of emissions”, due to its lower calorific value and higher moisture content (para 227). Similarly, Indian coal was deemed likely to produce “a higher volume of CO2 emissions” when used as a substitute (para 228). On this basis, the court concluded that “replacement coal may well [...] result in an increase in GHG emissions” and found that Alpha’s coal, being relatively cleaner, could be preferable from a climate perspective (para 232).

However, other judgments—including Finch—have highlighted a different understanding grounded in economic theory. They note that a fossil fuel extraction project increases supply, which in turn lowers the market price of that fuel, making it more attractive to consumers. This leads to higher consumption—either through increased energy use or decreased reliance on lower-carbon alternatives. As the UKSC put it, “leaving oil in the ground in one place does not result in a corresponding increase in production elsewhere” (para 2).

It is within this latter line of reasoning that the EFTA Court’s judgment firmly situates itself.

The Court emphasized that the EIA Directive requires the EIA to be “limited in scope to the effects of the project itself, as distinct from other alternative projects, whether existing or speculative”. It further held that the gross climate impact of the project’s output was the relevant measure, “without regard to speculative analyses of knock-on effects on other projects elsewhere” (para 96). The Court also linked the rejection of the net emissions approach to public participation rights. Allowing developers to omit gross downstream emissions based on contested “net impact” reasoning would “undermine [...] effective public participation in decision making [...] [and] allow the developer to omit information concerning high levels of greenhouse gas emissions [...] purely on the basis that due to a ‘net’ analysis, the amounts emitted by the project would not meet the threshold of significance” (para 97). 

4. Broader Implications

The EFTA Court’s Opinion is significant because it signals an emerging consensus that the EIA Directive requires assessing downstream, end-use emissions from oil and gas extraction projects. This reading aligns with the UK Supreme Court’s decision in Finch and the Scottish Court of Session’s judgment regarding the Jackdaw and Rosebank fields. It is also reinforced internationally by the ICJ’s Advisory Opinion on climate change, which emphasized that EIAs must cover “possible specific climate-related effects [...] at the level of proposed individual activities, e.g. for the purpose of assessing their possible downstream effects” (para 298).

In this light, the Opinion falls in line with the bulk of existing case law, which has dealt with indirect emissions mainly at the scoping stage—that is, once an EIA is already required, by debating whether downstream, end-use emissions qualify as “effects of the project”. Yet, similar arguments have also been raised in relation to upstream emissions—for example, claims that methane from milk production should have been considered when authorizing a cheese-making facility (see the Irish Supreme Court in An Taisce). The Court did not embrace this line, but the fact such challenges were made underscores how the issue extends beyond downstream effects of fossil fuel projects. Crucially, the question could also be brought forward to the screening stage—the initial threshold test of whether a project is “likely to have significant effects on the environment” and thus requires an EIA at all. Addressing indirect climate effects at screening would among other broaden coverage and ensure preventive scrutiny of projects with negligible direct but substantial indirect impacts—for example, cryptocurrency data centres (see here and  here).

Yet, including indirect emissions in an EIA does not, by itself, force refusal—the EIA Directive is procedural and does not attach automatic legal consequences to a finding of significant effects. The CJEU has previously stated that: “[the EIA Directive] does not lay down the substantive rules in relation to the balancing of the environmental effects with other factors or prohibit the completion of projects which are liable to have negative effects on the environment” (Case C- 420/11, para 46). From this perspective, the EIA Directive is rooted in procedural environmental law under which downstream emissions must be considered without imposing additional restrictions based solely on whether they exceed the 1.5°C target set by the Paris Agreement. Nevertheless, as Dutch climate law scholar Clemens Kaupa notes, once those indirect downstream emissions are on the record, they matter legally when read alongside binding EU instruments, especially the European Climate Law (Regulation 2021/1119), which sets at least −55% net emissions by 2030 and climate neutrality by 2050. They also interact with sectoral measures—for instance, the Energy Efficiency Directive and the Renewable Energy Directive, as well as recent EU initiatives phasing out fossil-fuel vehicles and regulating sustainable fuels in aviation and maritime transport. Putting full life-cycle climate effects on the EIA file therefore frames the permitting decision against concrete, binding EU-level objectives. 

This legal context could significantly narrow EU Member States’ discretion to approve new oil and gas extraction. Because the EU’s core climate goals are collective and minimum, the duty of sincere cooperation (Art 4(3) TEU) and the principle of energy solidarity (Art 194 TFEU) require national authorities to avoid measures that jeopardize Union objectives (see here). Moreover, given the currently limited role of CCS and the legal/empirical constraints on offsetting, a robust Scope-3 assessment could provide a reasoned basis to refuse authorization unless the Member State can narrowly and proportionately justify the adverse climate effects (e.g., specific energy-security grounds) and show consistency with EU targets and principles. Such refusal for states to rely on speculative negative-emission technologies to compensate for the emissions resulting from fossil fuel extraction would align with the landmark Dutch Supreme Court’s Urgenda (para 7.2.5) and the German Constitutional Court’s Neubauer (para 33).

The legal implications of integrating Scope 3 emissions into environmental assessments are also beginning to shape international climate litigation. A notable development in this regard is the growing relevance of such assessments in human rights-based climate cases before the European Court of Human Rights (ECtHR).  While Verein Klimaseniorinnen Schweiz v Switzerland, confirmed that states must act based on credible carbon budgets, it did not engage with Scope 3 emissions. By contrast, Greenpeace Nordic explicitly raises whether failing to assess downstream emissions violates Articles 2 and 8 of the European Convention on Human Rights (ECHR), particularly when fossil fuel expansion contradicts the best available climate science (Greenpeace Nordic and Others v Norway (application), para 62). 

In line with its environment-related case law, the ECtHR may hold that when States are faced with complex environmental and economic policy choices, the decision-making process must include adequate studies and assessments to anticipate potential environmental harm and ensure a fair balance of competing interests (Taskin, para 119; Hatton, para 128). The Court has also found that national authorities fail in their obligations under Articles 2 and 8 ECHR when they approve activities without properly assessing environmental risks or adopting effective protective measures—thus exposing people to serious harm and violating their rights to life and private and family life (Budayeva, para 149; Tatar, para 112). Greenpeace Nordic could therefore redefine how human rights law addresses the full climate impact of state-authorized projects, including those whose most damaging effects occur beyond national borders.

Taken together, these developments point to an emerging life-cycle approach in permitting in the EU (and the EEA): indirect downstream emissions must be assessed, and once they are on the record, EU climate law and human-rights standards could meaningfully constrain approvals. In short, what begins as a procedural duty may become a substantive filter on new fossil projects.

* Nicolas Holoffe is an LL.M. candidate at McGill University. He also holds an LL.M. from the University of Antwerp, specializing in sustainability and human rights law, and a LL.B. from UCLouvain Saint-Louis.