The New South Wales Court of Appeal has allowed an appeal concerning a proposed 22-year extension of the development consent for the Mount Pleasant Coal Mine, which produces thermal coal, on the basis that the Independent Planning Commission failed to consider the effects of climate change on "the natural and built environment in the locality".
Snapshot
- MACH Energy Australia Pty Ltd sought State significant development approval to extend the life of the Mount Pleasant Coal Mine, which was referred to the Independent Planning Commission (IPC).
- The IPC approved the application subject to conditions. In making its determination, the IPC noted the cumulative impact of greenhouse gas emissions globally and referred to Australia's obligations under the Paris Agreement.
- On appeal, the Land and Environment Court upheld the IPC's decision. However, the Court of Appeal quashed that decision, on the basis that the IPC had failed to consider the specific effects of climate change on the locality of the mine.
Background – a coal mine is to be extended
The proponent, MACH Energy Australia Pty Ltd, sought approval to extend the development consent for the Mount Pleasant Coal Mine for 22 years (the Project). The IPC granted consent to the Project, subject to conditions. In its statement of reasons, the IPC noted that submissions had identified "the cumulative impact that GHG emissions would have". The mine produces thermal coal.
Proceedings in the LEC – the development consent is upheld
A local environment group, Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc (DAMS), commenced judicial review proceedings in the Land and Environment Court (LEC) alleging the IPC had failed to consider a number of the mandatory relevant considerations in section 4.15 of the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act). At first instance, Justice Robson dismissed the proceedings.
Grounds of appeal – failure to consider mandatory relevant considerations
There were two grounds before the Court of Appeal:
- whether the IPC erred by failing to consider whether to impose conditions to minimise Scope 3 emissions (as required by cl 2.20 of the State Environmental Planning Policy (Resources and Energy) 2021 (NSW) and s 4.15(1)(a)(i) of the EP&A Act); and
- whether the IPC erred by failing to consider the likely environmental impacts of the Project on the natural and built environments, and social and economic impacts in the locality (as required by s 4.15(b) of the EP&A Act).
Court of Appeal decision – impacts of climate change on the locality of the Project must be considered
DAMS succeeded on its second ground of appeal. Although the IPC had referred to the effects of climate change "being felt globally", and how the extension of the Project's life would increase emissions, this did not relieve the IPC of the specific obligation in s 4.15(1)(b) of the EP&A Act) to consider the environmental impacts of the Project "in the locality" of the Project. The Court held that the IPC was required to consider "the causal relationship between the Project and its effects on the locality", including the Project's climate change impacts. This was especially the case where the evidence indicated that the locality of the Project was "particularly susceptible" to the effects of climate change.
In reaching this conclusion, the Court referred to the previous decision of Gloucester Resources, which found that the fact a project might only minimally contribute to global emissions did not affect the need to consider the impacts of those emissions in the locality of the project (see our earlier blog here).
DAMS' first ground of appeal was dismissed, as the Court held the IPC had considered Scope 3 emissions by observing that they would be "regulated and accounted for" by any country which purchased coal from the Project. The Court also held that once the issue was considered, there was no obligation on the IPC to impose any conditions. This has previously been considered in Queensland in the Waratah Coal decision (see our earlier blog here).
Interestingly, the Court declined to invalidate the consent. Instead, the Court agreed with the proponent to remit the proceeding to the LEC, to consider whether the Court should impose orders for the validity, or conditional validity, of the consent. This may avoid the need for the IPC to reconsider the matter.
Implications of the decision – local impacts of climate change must be considered
The decision provides important guidance on the nature of the assessment required by section 4.15(b) of the EP&A Act – namely that even where environmental impacts might be far-reaching or global in nature, the impact on the locality of the specific project must be considered. This is particularly important guidance for consent authorities when determining whether or not to grant consent.
We anticipate that there will be increased focused from consent authorities on identifying the location of environmental impacts, and in particular how projects may contribute to climate change in a particular locality. That may require assessing whether a particular locality is especially prone to bushfire or flood risk, or the effects of warmer temperatures or rising sea levels.
The judgment can be found at the following link: Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd [2025] NSWCA 163
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