Komatsu UK Ltd v The Environment Agency

Facts

The appellant, Komatsu UK Ltd, manufactures ground excavators for supply to the European construction industry and is a participant in the surface engineering sector (SEA) under a climate change agreement with the Environment Agency. The agreement establishes targets to control and reduce carbon dioxide emissions, with targets reviewed and reset for specified periods. The Department for Energy Security and Net Zero (DESNZ) oversees climate change agreements, and on 15 March 2023 proposed a timeline for an extension scheme for existing agreements, sending emission reduction targets to sector associations in March 2023. Following a consultation and negotiation period between DESNZ and the sector associations, DESNZ issued target reductions to sectors in October 2023, and the sector associations distributed those reductions amongst their participants. The Environment Agency's role, on instruction from DESNZ, was to vary the existing agreements so as to implement the newly agreed targets, and it wrote to the appellant with notice of the amended targets. By its decision of 22 December 2023 the Agency varied the agreement accordingly. The appellant appealed to the First-tier Tribunal, contending that the target was unfair because it was calculated by reference to an unusually busy post-COVID period of high production between January 2021 and December 2022, and inviting the tribunal to vary and reduce it. The parties agreed the appeal could be determined on the papers.