Supreme Court finds Climate Change a Mandatory Relevant Consideration in Oil and Gas Tenders

New Zealand Supreme Court confirms that climate change must be considered when deciding whether to offer petroleum exploration permits by tender

This morning, on Friday 19 December 2025, the Supreme Court released its judgment in Climate Clinic Aotearoa Incorporated v Minister of Energy and Resources [2025] NZSC 197. 

The appeal was dismissed, but the Court accepted several important aspects of the appellant’s legal arguments - setting an important precedent moving forward.

For context, in 2021, a group of law students from Victoria University of Wellington challenged decisions by then-Minister of Energy and Resources, Megan Woods, to grant petroleum exploration permits in Taranaki. After facing pushback from the High Court and Court of Appeal, the Supreme Court heard the case earlier this year in 2025. 

The Supreme Court dismissed the appeal on the facts, but the Court unanimously agreed with the appellants on several of their key legal arguments - their interpretation of the purpose of the statute, the fact that climate is mandatory relevant consideration when Ministers are making decisions on whether to offer petroleum exploration permits for tender, the role of s 5ZN of the Climate Change Response Act, and Treaty principles.

Ultimately, when you delve into what the judgment says, this is a win for the students and for the climate. The Court has clarified the interpretation of key provisions in the Crown Minerals Act and Climate Change Response Act, which will guide future permitting decisions moving forward. It sets out a climate-positive framework for how decision-makers must approach climate change and Treaty principles under the Crown Minerals Act.

Climate Considerations are a Mandatory Relevant Consideration

The Court held climate change is a mandatory relevant consideration when deciding whether to offer permits for tender (at [142]). This is a significant finding that goes further than New Zealand courts have done before, and provides critical clarification of how the Crown Minerals Act operates in the context of climate change.

The Court reached this conclusion for several reasons:

• Petroleum extraction and consumption are major contributors to greenhouse gas emissions in NZ and internationally.

• Climate change and its effects are an issue of “pressing concern for New Zealand and its well-being in both the near and long-term”.

• New Zealand has entered into “binding commitments which require a drastic reduction of its greenhouse gas emissions”.

• At least at the time the decisions were taken (2019-2021), no comprehensive regime existed for addressing the climate change implications of ongoing petroleum exploration and mining. At the time of the challenged decisions, although the Climate Change Response Act 2002 had been enacted, there were no budgets or emissions reduction plans in place setting out how the target would be achieved or how New Zealand would meet its international obligations.

• Given the likely scale of extraction needed for commercial viability, the climate change implications of the decision were “sufficiently clear to require the decision-maker to engage with them”.

• Section 5ZN of the CCRA, which provides that decision-makers may take New Zealand’s 2050 target, emissions budget, and emissions reduction plans into account “if they think fit”, may become mandatory in some circumstances. This depends on the “nature and subject matter of the decision, and other contextual matters”

Like in its judgment in Smith v Fonterra, the Supreme Court reiterated that “it is indisputable that climate change threatens human wellbeing and planetary health”. Moreover, the Court noted that New Zealand has entered into a series of binding international obligations relating to emissions reductions (including under the Paris Agreement). 

One of the central issues in the dispute, much like in other climate litigation cases (notably, Movement and All Aboard), was the impact of the purpose of the Crown Minerals Act.

The purpose of the Act is to “promote” prospecting, exploration, and mining of Crown-owned minerals “for the benefit of New Zealand”. The parties disagreed on whether this section requires the decision-maker to consider whether the granting of a permit or offer for tender is “for the benefit of New Zealand”, including on account of climate implications, or whether it assumes that the exploration or mining of Crown-owned minerals will necessarily be “for the benefit of New Zealand”. 

The Court found that the purpose clause is “not simply a recognition of the benefits that flow from mining, but rather a statement that what is promoted by the CMA is exploration and mining that is for the benefit of New Zealand” (at [83]). That is, not all mineral exploitation will necessarily be “for the benefit of New Zealand” - that is an assessment that must be made in the context of each and every decision. 

This conclusion may extend beyond whether climate considerations ought to be considered, also. The Court held that “the  Minister may have regard to such matters if they logically bear upon the s 24 decision concerning whether to invite blockteners for a particular mineral, or in a particular area. If there are other matters that are not dealt with, or fully dealt with, in other regulatory frameworks that are of obvious relevance to the “benefit of New Zealand” assessment, then the Minister may be required to address those matters” (at [85]).

Principles of the Treaty

The judgment also considered the relevance of the principles of Te Tiriti o Waitangi.   

Section 4 of the CMA provides that “all persons exercising functions and powers under the CMA must have regard to the principles of the Treaty”. The Court held that the legislative intent is clear: decision-makers, when exercising powers under the CMA, must address and take into account the principles of the Treaty (at [130]).

The Crown agreed that at a level of general principle, the impact of climate change on Māori is generally relevant to the Crown’s Treaty obligations, and that the Crown has a duty of “active protection” in respect of Māori interests. However, the Crown had also argued that the CMA excluded climate change considerations, because climate change was dealt with elsewhere - ie in the CCRA.

The Court rejected that argument, finding that the “climate change implications of the issue of permits are not comprehensively dealt with elsewhere, and certainly not in the context of Treaty obligations”. The Court emphasised that climate will have particularly severe impacts on Māori - citing a Ministry for the Environment report that describes the impacts on Māori as including: “political and economic marginalisation, loss of land and resources, human rights violations, discrimination, and unemployment.” 

The Court held that this required the decision-maker to consider the impacts of climate change on Māori beyond the Taranaki hapu and iwi directly affected by the specific s 24 permitting tender decision. 

However, the Court fell short of finding that the Crown failed to meet its obligations in this case - there was no pleaded challenge to the s 24 decision, and therefore no affidavit from the decision-maker. (This was because of the way the case developed - it had been pleaded on the basis of s 25, but the focus of the judgment was s 24). The Court added that, even if there had been an error at the s 24 stage, it was unlikely to warrant quashing decision because it was unlikely to have been material. 

Costs

The Court made no order for costs - but did not elaborate further on this. 

Congratulations to all those involved in this case, especially those students from Climate Clinic Aotearoa Incorporated, as well as Dr James Every-Palmer KC (Lawyers for Climate Action founder and board member), who was lead counsel for the students, and Lee Salmon Long for acting as instructing solicitor.