By Kate Newton of RNZ 

The country’s highest court has found governments must consider climate change when deciding whether to offer oil and gas blocks for tender. 

The Supreme Court dismissed an appeal on Friday that former Energy and Resources Minister Megan Woods was required to take climate change into account when she granted on-shore exploration permits to two companies in 2021. 

However, the court found climate change is a mandatory consideration at the earlier stage of offering blocks for tender. 

Climate change was “so obviously relevant” to a decision that could lead to the extraction and consumption of fossil fuels that it must be considered, the panel of five Supreme Court justices ruled. 

“Climate change is a matter of pressing concern for New Zealand and its wellbeing both in the near and long term,” the justices wrote in their decision. 

“Moreover, the Crown has entered into binding obligations on New Zealand’s behalf in connection with reducing greenhouse gas emissions. 

“Petroleum extraction and consumption are major contributors to greenhouse gas emissions in New Zealand and internationally.” 

The Supreme Court decision emphasises climate change's relevance to fossil fuel extraction and New Zealand's emissions obligations. Photo / Paul Estcourt 

The Crown Minerals Act’s aim was to “promote” prospecting, exploration and mining “for the benefit of New Zealand”. 

The court found that “benefit” was “not simply a recognition of the benefits that flow from mining”. 

“Climate change is therefore a mandatory relevant consideration ... when deciding whether to offer petroleum exploration permits for tender,” the decision said. 

“This is because climate change is so obviously relevant to a decision to commence a process which is intended, if successful, to progress through to extraction of petroleum.” 

The case against the Energy and Resources Minister was taken to the Supreme Court by a group of Victoria University law students. 

Students for Climate Solutions, now called Climate Clinic Aotearoa, first took the case in 2021. 

The group argued that when then-Energy Minister Woods made her decision to grant the permits, she did not properly consider the impacts of climate change, despite advice from the Climate Change Commission the Government should avoid locking in new fossil fuel assets. 

The Supreme Court dismissed an appeal against how Megan Woods made decisions, stating climate change consideration is not required at the permitting stage. Photo / NZME 

The students argued climate change should be considered at the point when a minister is deciding whether to grant a permit. 

Friday’s judgment dismissed the students’ case, but on the basis that once a tender process had already been completed, going on to refuse a permit would undermine the intent of offering a block for tender. 

The proper place to consider climate change and other mandatory considerations was at the earlier stage of offering blocks for tender, the court ruled. 

The judgment found that even though Woods was not required to consider climate change at the permitting stage, she had adequately done so anyway. 

She had received detailed advice from officials and was aware of other relevant matters, including policy work on a National Energy Strategy and a broader climate change work programme. 

The High Court earlier found against the students’ case, ruling that while no one could doubt the importance of climate change issues, the purpose of the Crown Minerals Act was to promote mining for fossil fuels. 

“Such activity may be at the expense of climate change, but that is what the act seeks to advance,” Justice Francis Cooke found. 

On that account, the Energy Minister had acted in line with the law, he said.

Current projections show New Zealand is on track to meet its emissions budgets for 2022-25 and 2026-2030. Photo / File 

The Court of Appeal also dismissed the students’ appeal, with a panel of three judges finding there was no requirement for the minister to consider climate change when making permitting decisions. 

However, one of the three appeal judges, Justice Jillian Mallon, found climate change was a “permissive” consideration – in other words, the minister could factor it into her decision if she chose to. 

That was because the Climate Change Response Act, more widely known as the Zero Carbon Act, allows ministers and public agencies to take New Zealand’s emissions targets and budgets into account when carrying out their duties. 

Justice Mallon said in her judgment: “Given the accepted climate emergency, and that the combustion of fossil fuels is the main cause of climate change, it would be odd if the minister responsible for petroleum exploration was precluded from taking into account these key components of New Zealand’s response to climate change, when Parliament has said in the Climate Change Response Act that those exercising powers may do so.” 

As an example, she said if the country was on course to exceed one of its emissions budgets, “it would be odd (and potentially contrary to the benefit of New Zealand) if the minister was precluded from taking into account any published advice from the Climate Change Commission about this in determining whether to grant a permit in furtherance of the purpose of the act to promote further exploration or prospecting of petroleum ‘for the benefit of NZ”. 

At the time Woods granted the two permits, the Climate Change Commission had advised the Government it was not on track to meet its emissions targets. 

Current projections show New Zealand is on track to meet its emissions budgets for 2022-25 and 2026-2030, but not the budget for 2031-35. 

– RNZ