Heathrow’s controversial third runway can proceed, the UK’s Supreme Court ruled on Wednesday, reigniting a debate about airport capacity as the government seeks to meet increasingly ambitious climate change targets.

The UK’s top court ruled that the government had acted lawfully in its decision to favour a third runway at Heathrow and had taken proper account of the UK's commitments as represented in the 2016 Paris agreement on climate change, when deciding whether to build a new runway.

The Supreme Court had been asked to consider whether the government had acted lawfully in drawing up its Airports National Policy Statement, which covers future airport capacity in the south-east and favours a third runway at Heathrow.

The top court had been asked to consider whether the government had taken proper account of the Paris agreement, which sets targets for the reduction of greenhouse gas emissions, in its decision-making.

Handing down the court’s decision, Lord Philip Sales, a Supreme Court justice, said the government had properly taken the Paris agreement into account. “The national policy statement is not affected by any unlawfulness and is valid,” he said.

The ruling means that Heathrow is now entitled to apply for planning permission for its third runway. However, the government will still have to make the final decision on whether to allow the project, after any planning process — including a full planning inquiry — is complete.

Heathrow welcomed the decision as “the right result for the country” but did not give any indication as to when it would proceed to the next stage of the planning process.

Instead, the airport said it would focus on maintaining services during the pandemic while it consults on its next steps.

The Department for Transport said it would not comment on the ruling, on the basis that it was a private sector project. However, officials emphasised that the government took seriously its commitments on the environment and would ensure that the third runway, if it does go ahead, must still meet strict criteria on air quality, noise and climate change.

Heathrow’s plans were thrown off course when the Court of Appeal ruled in February that the government’s airport policy was unlawful as it had failed to take into account the impact on commitments made under the Paris agreement.

Wednesday’s ruling reopens the pathway to expansion at the airport west of London, but comes as the aviation industry is experiencing a significant retrenchment due to the Covid-19 crisis and as the government adopts new climate change targets.

For the first time in years there is plenty of capacity in London’s airspace: passenger numbers at Heathrow are forecast to fall to 22.6m this year, down nearly three-quarters on 2019’s figure of 81m.

The industry is not expected to recover until the middle of the decade, and Heathrow has extended the closure of Terminal 4 to the end of 2021 to help save cash after losing £1.9bn in the first nine months of 2020.

But the airport’s executives argue that the runway is a long-term project that is needed regardless of the impact of the pandemic.

Heathrow’s lawyers told the Supreme Court in October that even if “everything went smoothly” from now the runway would not be finished until 2030 at the earliest, when the pandemic could be a “distant memory”.

The Supreme Court’s decision breathes new life into the debate over how to expand airport capacity in the south-east that has dogged successive governments for decades.

MPs backed a new runway at Heathrow in 2018, following a recommendation from the Airport Commission three years earlier.

The political focus on climate change has increased since then, and environmental campaigners argue that expanding the airport is incompatible with the UK’s commitment to bring all greenhouse gas emissions to net zero by 2050.

Will Rundle, head of legal at Friends of the Earth, which brought the challenge, said: “This judgment is no ‘green light’ for expansion . . . Heathrow expansion remains very far from certain.” Plan B Earth, another campaign group which brought the case, called the ruling “terrible” and said it would appeal to the European Court of Human Rights.

Back Heathrow, a group of residents and businesses, said the decision was a boost for local employment and a “huge moment” for the UK in the days before the end of the Brexit transition period.

Intentional Airlines Group, the parent company of British Airways - Heathrow’s biggest carrier, said the need for additional capacity at Heathrow should be reassessed “and the environmental impact and cost of expansion reviewed independently”.

Additional reporting by Jim Pickard