South African environmental law is undergoing a decisive shift in how climate change considerations are integrated into environmental authorisation (EA) decision-making. Courts are increasingly recognising climate change as a material consideration within the "need and desirability" assessment required under the National Environmental Management Act 107 of 1998 (NEMA), particularly regarding fossil-fuel developments. This judicial path coincides with the publication of the Draft National Guideline for the Consideration of Climate Change Implications in Applications for Environmental Authorisations in terms of section 24J of NEMA on 24 October 2025 (Draft National Guideline). Once finalised, the Draft National Guideline will be a mandatory consideration for competent authorities when determining EA applications, alongside other relevant factors contemplated in section 24O of NEMA.

Two recent superior court judgments, Green Connection NPC and Another v Minister of Forestry, Fisheries and the Environment and Others (5676/2024) [2025] ZAWCHC 349 (Green Connection) and South Durban Community Environmental Alliance and Another v Minister of Forestry, Fisheries and the Environment and Others (479/2023) [2025] ZASCA 134 (SDCEA), confirm that inadequate climate change impact assessments can render EA decisions unlawful. At the same time, the Supreme Court of Appeal’s decision to grant leave to appeal in Green Connection, specifically on whether climate change impact assessment, including Scope 3 emissions, is required at the exploration phase or only at the production phase, introduces significant legal uncertainty for the upstream petroleum sector. Applicants, competent authorities and company boards must therefore navigate a developing regulatory landscape, where judicial doctrine is advancing more rapidly than settled policy and statutory clarity.

The current regulatory framework

Section 24O of NEMA, read with the Environmental Impact Assessment Regulations, 2014, requires an EA applicant to motivate the “need and desirability” of a proposed development. This assessment is rooted in the principle of sustainable development, balancing present socio-economic needs with the rights of future generations. The Department of Forestry, Fisheries and the Environment’s Guideline on Need and Desirability, 2017 expressly directs applicants to consider South Africa’s climate change commitments as part of this motivation.

Importantly, section 24O of NEMA requires competent authorities to consider all relevant factors, including applicable guidelines published under NEMA, departmental policies, environmental management instruments, and any other information relevant to the application. Climate change considerations are therefore mandatory, but they are not determinative in isolation and must be weighed against other relevant factors such as economic development, energy security and the protection of existing rights.

The constitutional and administrative-law foundation for this approach is well established. In Fuel Retailers Association of Southern Africa v Director-General Environmental Management 2007 (6) SA 4 (CC), the Constitutional Court held that a failure to consider a relevant environmental impact renders an administrative decision reviewable. This principle was further developed in Earthlife Africa Johannesburg v Minister of Environmental Affairs and Others [2017] ZAGPPHC 58, where the court confirmed, in relation to the proposed Thabametsi coal-fired power station, that a formal expert climate change impact assessment constitutes the clearest evidence that climate impacts were properly considered. In Sustaining the Wild Coast NPC and Others v Minister of Mineral Resources and Energy and Others [2022] ZAECMKHC 55, the court extended this reasoning to fossil-fuel projects, emphasising that climate change impact assessments must consider the full lifecycle of the activity culminating in production and combustion, thereby recognising exploration and production as interconnected stages of a single process.

Green Connection and unresolved questions of scope and timing

In Green Connection, environmental organisations successfully reviewed the decision to grant an EA to TotalEnergies EP South Africa for offshore oil and gas exploration. The Western Cape High Court found that the environmental impact report was deficient because it failed to quantify greenhouse gas (GHG) and fugitive emissions from potential gas combustion, did not consider renewable energy alternatives, and did not adequately explain mitigation measures. The Court rejected the argument that climate change assessment could be deferred until the production phase, finding instead that exploration and production formed part of a continuum requiring meaningful climate consideration at the exploration stage.

However, the Supreme Court of Appeal has granted leave to appeal on this precise issue. As a result, guidance from superior courts on whether climate change impact assessments, including Scope 3 emissions, are required at the exploration phase or only once production becomes reasonably foreseeable is still yet to be determined. This uncertainty has significant implications for petroleum rights holders, particularly regarding whether separate assessments are required at each regulatory stage or whether a single, comprehensive assessment may suffice. The appropriate temporal and evidential scope of Scope 3 emissions quantification remain unresolved where commercial viability and downstream end-use are speculative. The precedent that may come out of the Supreme Court of Appeal could have unexpected consequences for other extractive industries.

SDCEA on mandatory considerations of renewable energy alternatives

In SDCEA, the Supreme Court of Appeal considered an EA granted to Eskom for a proposed 3,000 MW gas-to-power plant. The applicants contended that the environmental assessment failed, amongst other arguments, to adequately consider GHG emissions and renewable energy alternatives. Eskom and the State argued that the decision was justified by the Integrated Resource Plan 2019 (IRP) and national energy security imperatives. The Supreme Court of Appeal rejected this position, holding that while the IRP is a relevant policy framework, it cannot override NEMA’s mandatory requirements to assess climate change impacts and reasonable alternatives, including the "no-go" option. The judgment underscores that compliance with energy policy is insufficient on its own and that climate change considerations must be substantively engaged in every EA decision.

Scope 3 emissions and proportionality

The requirement to assess Scope 3 downstream combustion emissions remains the most contested aspect of climate change impact assessment. The United Kingdom Supreme Court’s decision in R (on the application of Finch) v Surrey County Council [2024] UKSC 20 (Finch) held that Scope 3 emissions must be assessed when they are an inevitable consequence of the development. However, Finch concerned a production project where combustion of the extracted oil was a certainty. This contrasts sharply with reconnaissance permits and exploration rights where discovery, commercial viability and end-use are uncertain.

At the early exploration stage, the quantum of potential reserves is unknown, downstream uses may include non-combustion applications, and multiple regulatory approvals separate exploration from any future production. These uncertainties render Scope 3 quantification at exploration inherently speculative and potentially unreliable, with projected emissions varying widely. A proportional, tiered assessment regime is therefore necessary to align administrative burden with technical certainty, recognising that reconnaissance and early exploration activities typically involve limited direct emissions and should not require speculative Scope 3 quantification without confirmed discovery.

Protection of existing rights and regulatory sequencing

The Draft National Guideline requires consideration of climate-related financial risks, including transition risks and stranded assets. Without clear limits, this creates a risk that existing or pending exploration and production rights granted under the MPRDA may be indirectly constrained through the EA process. Climate considerations must be balanced against constitutional imperatives, including development, energy security and job creation.

Uncertainty is compounded by the Climate Change Act 22 of 2024. Sections 26 and 27, which establish the framework for listed GHGs, listed activities and carbon budget determinations, are not yet in operation. For petroleum operators with long-term investment horizons, uncertainty regarding future carbon budget allocations and the potential for retrospective application creates material investment risk that may deter foreign direct investment and undermine otherwise viable projects.

Directors' duties and climate risk

These developments have important corporate governance implications. Directors are increasingly expected to manage climate-related risks as part of their duties under section 76(3) of the Companies Act 71 of 2008. Climate change presents foreseeable financial and regulatory risks, and failure to ensure that specialist assessments adequately address those risks may expose boards to claims of negligence. Boards considering fossil-fuel projects must therefore ensure that climate risks, mitigation measures and renewable alternatives are properly interrogated as part of the "need and desirability" assessment.

The path forward

Green Connection and SDCEA have added to the growing bank of legal precedent that climate change impact assessments are a core aspect of EA decision-making. Courts expect meaningful engagement with GHG emissions, renewable alternatives and long-term sustainability, and policy compliance alone will not suffice. Once finalised, the Draft National Guideline will play a critical role in providing regulatory certainty by embedding proportionality and methodological clarity into climate assessments.

A differentiated approach should recognise that reconnaissance permits and non-invasive exploration warrant streamlined screening focused on Scope 1 and 2 emissions, invasive exploration requires focused Scope 1–2 assessment with Scope 3 analysis only once commercial discovery is reasonably foreseeable, and that production and development applications justify comprehensive Scope 3 quantification and climate scenario analysis.

Written by Garyn Rapson, Partner & Gaura Moodley, Trainee Attorney at Webber Wentzel