
In case you somehow missed the endless briefings given last week, Rachel Reeves wants you to know: economic growth is the Labour government’s “No 1 mission”. The chancellor announced a flurry of government-backed infrastructure projects, most controversially a third runway at Heathrow Airport. But the noise around Heathrow meant that another environmentally significant decision, taken in the British courts last week, largely flew under the radar. (Sorry.)
Edinburgh’s court of session ruled on Thursday (30 January) that licences for the withdrawal of oil and gas from Rosebank and Jackdaw, two oil fields in the North Sea, which were approved under Rishi Sunak’s Conservative government, were issued unlawfully. The ruling found the emissions from the fossil fuels the sites would produce were not accounted for when the plans were signed off. Approval was given to the project in Rosebank, the UK’s largest untapped oilfield and backed by Norwegian gas giant Equinor, in autumn 2023, while Jackdaw, backed by Shell, was granted its licence in 2022.
Though the judgement allows the companies behind each project to continue preparatory work, campaigners who brought the case against Rosebank and Jackdaw celebrated “a historic win”. The North Sea Transition Authority and Ed Miliband, the energy secretary, will consider new evidence from the projects’ backers about the “downstream” emissions they would create, before coming to a new decision on the sites, which is expected in the spring.
Labour have long bemoaned the messy “inheritance” it received from the Conservatives, and Rosebank and Jackdaw perhaps typify that. As I noted last November, when the judge heard the final arguments in this case (which the government did not formally defend), crowding in external investment for public-private infrastructure projects is key to the government’s clean power plans. The £22bn pledged by Reeves et al. for two carbon capture projects on Merseyside and Teesside, for example, comes in a joint venture with investment from BP, TotalEnergies and Equinor. The chancellor is clearly keen on keeping the oil and gas industry – who need to be brought along on the net zero journey – onside.
Nevertheless, Reeves must also consider the optics of approving Jackdaw and Rosebank having pledged to not grant any new oil and gas licences while in opposition. (Not a great look!) Though, as noted in the aftermath of the court’s decision, that pledge did not include granting “production licences”, which these North Sea projects would require. Some Labour MPs, reeling from the decision to back a third runway at Heathrow, have warned they would “go absolutely nuts” if the licences were regranted.
All of this could weigh heavily on Miliband, who previously referred to Rosebank as a “colossal waste of taxpayer money and climate vandalism”. The energy secretary will already have to contend with how expanding Heathrow – something he considered resigning his cabinet post over in 2010 – fits into Britain’s carbon budgets, a series of legally binding targets that limit the amount of C02 the UK can emit. According to a Miliband ally, if there are any attempts by Reeves and prime minister, Keir Starmer, to green light the projects in the North Sea, “Ed will come to that fight armed with a lot of evidence about what Rosebank will do to our carbon emissions.”
Indeed, if Rosebank and Jackdaw do go ahead, the climate backlash will likely be enormous. Anti-Rosebank activists cite research that claims burning the oil and gas produced at the site would emit more C02 than the 28 poorest countries do in a year. The International Energy Agency has been clear that there is “no need for investment in new fossil fuel supply” if we are to limit global heating to 1.5C above pre–industrial temperatures. Right on cue, research showed that average global temperatures in 2024 were 1.6C over that threshold – the first year to do so.
So where do we go from here? The oil companies are being coy. Shell praised the court’s decision to allow preparatory work on “this nationally important energy project” while new consents are sought. Equinor also welcomed the decision, labelling Rosebank as “critical for the UK’s economic growth”. A lot has been promised: over £3.3bn of private finance has been pledged and over 5,000 jobs were set to come from both projects, primed to become operational from 2026/2027. There is a lot of sunk cost – both financially and in terms of industrial relations – attached to both Rosebank and Jackdaw.
But the government has form on this. After plans to open the Cumbria coal mine – set to be the country’s first for 30 years – were struck down by the courts last September on grounds similar to the North Sea verdict, ministers confirmed that new mining schemes would be banned to “pave the way for a clean, secure energy system”.
It’s worth remembering that compared to the North Sea projects, the Cumbria coal mine was less significant: it was set to create 500 jobs, and West Cumbria Mining, its backing firm, was putting in around £200m into the scheme. This also happened, as one industry lobbyist noted, before “[Donald] Trump and Labour’s post-Christmas growth zeal”. Last week at Davos, when asked about the choice between net zero and her “No 1” economic growth missions, Reeves said: “Well, if it’s the No 1 mission, it’s obviously the most important thing.”
Labour has always framed its commitments to net zero – clean power 2030 or the national wealth fund – as running in unison with economic growth. But, as the disputes over Heathrow and Rosebank show, that marriage is not always harmonious.
This article was originally published as an edition of the Green Transition, New Statesman Spotlight’s weekly newsletter on the economics of net zero. To see more editions and subscribe, click here.
[See also: Why net zero will become a headache for Labour]