New Community Benefit Agreements For Queensland Renewables Projects

The Planning (Social Impact and Community Benefit) and Other Legislation Amendment Bill 2025 commenced on 18 July 2025, making Social Impact Assessments and Community Benefit Agreements a pre-condition to lodging development applications for wind farms and solar farms over 1MW. The reforms are said to be about ensuring renewable energy projects have social licence with affected communities before development approval is sought. But what exactly is a Community Benefit Agreement and what do proponents need to think about when engaging with councils?

Community Benefit Agreements

A community benefit agreement, or CBA, is an agreement about providing a benefit to a community in the locality of a development that requires a social impact assessment under the Planning Act 2016.¹ It is intended that a CBA between a proponent and the relevant local government will deliver 'tangible, place-based community benefits' targeted towards the specific needs of communities most likely to be affected by the development.

A proponent seeking to make a development application (DA) for a material change of use of premises for a wind farm or a solar farm that has an output of 1MW or more cannot lodge the DA unless it is accompanied by a social impact assessment and the Community Benefit Agreement.²

The reforms do not prescribe the form and content of a Community Benefit Agreement. A CBA may be a single agreement, or multiple agreements with different parties such as neighbours and First Nations groups. The State may be a party to a CBA if the social impacts of the proposed development or the circumstances warrant it.

What are 'community benefits'?

The reforms do not prescribe benefits that must be covered in a Community Benefit Agreement, but some examples are provided, including:

providing infrastructure or contributing towards infrastructure or another thing for the community, such as a sports facility or library or a training program to upskill members of the community; and
making a financial contribution to the community, such as giving a donation to a fund established for the benefit of a community.³

The Department of State Development, Infrastructure and Planning (DSDIP) has published guidance that includes the following as examples of community benefits:

delivery of new or enhancement of existing local or regional infrastructure, such as community facilities and housing
local or regional community benefit funds or programs
sponsorship or grant funds or initiatives
local jobs and/or training programs to upskill members of the community
investment in community services such as heath, wellbeing, education or environmental initiatives
in-kind contributions, such as employee volunteerism and donations of goods and services
supporting local businesses and local procurement initiatives
benefits for First Nations peoples
energy offsets
environmental conservation projects.

The reforms do not state what the quantum of community benefits should be, rather leaving it to be negotiated between the proponent and the local council. However, the guidance provides two examples that will likely set the bar for financial contributions, but which lack detail and the nuance of policies it references.

Annual payments

Where annual payments are proposed, DSDIP points to the NSW Benefit-Sharing Guideline, which contemplates annual payments (adjusted for CPI) for the life of the project, calculated by reference to:

$850 per megawatt of installed capacity
$1,050 per megawatt of installed capacity.

Importantly, the NSW model contemplates these payments being the 'ceiling' for the total value of benefit-sharing, including neighbourhood benefits (i.e., benefits provided to individual landholders in the immediate vicinity of the project).

The Queensland guideline departs from the NSW position, stating that community benefits should not be conflated with compensation for host landholders and/or adjoining landholders. This is despite there being no statutory compensation liability to neighbouring landholders. To date, neighbour benefits have been driven by renewable energy developers and are voluntary payments made to affected landholders.

Interestingly, 'benefits for First Nations groups' is listed as an example of a community benefit, rather than compensation for an indigenous land use agreement or a commercial agreement between affected First Nations groups and proponents arising out of cultural heritage engagements. The guidance states that 'proponents are not limited in or discouraged from entering into private agreements with First Nations peoples to deliver agreed benefits, either through a CBA or via some other private agreement' (with an important caveat that CBAs are a matter of public record, while First Nations agreements are often subject to an obligation of confidentiality).

It is not clear how multiple CBAs with different parties will impact expectations of annual payments by local governments. For example, if proponents have agreements with neighbours, Traditional Owners and the relevant local government, the reforms are silent on whether the corollary is that that payments to local governments can be reduced by the value of benefits provided to other affected parties.

Housing payments

The second example of financial contributions quoted in the guideline refers to a percentage-based contribution model, using the Banana Shire Council major projects housing demand and levy policy as an example. In Banana Shire, all major projects with a capital value in excess of $50M are required to allocate 0.7% of the total capital value of the project or $650,000 (whichever is greater) towards the cost of providing new permanent housing in the region, payable on day 1 of construction.

However, under the Banana Shire model, the developer owns the property 'for supply or sale to their operational workforce' or alternatively, to be made available for sale to the public. The guidance does not go into that level of detail, leaving it to the parties to reach a negotiated outcome.

Process for negotiating a CBA

The legislation does not provide a framework for the formal negotiation of a CBA, although the guidance provides some insight. The 'notice of intent to commence a social impact statement' is seen as the first step.

There is no minimum negotiation period for negotiating and agreeing a CBA, or even a positive obligation on councils to enter into negotiations for a CBA. If council does agree to negotiate a CBA (by giving notice in writing)⁴, the Planning Act imposes an obligation on proponents and councils to act in good faith.⁵ This includes disclosing information relevant to the proposed agreement, considering and responding in a timely manner, and giving reasons.

If the parties cannot reach an agreement, the parties may request the Chief Executive of DSDIP to refer the matter for mediation.⁶ The Chief Executive nominates the independent mediator, but participation is voluntary and either party can withdraw at any time. The Planning Act describes the mediation process⁷, but does not go into detail about the rules of mediation, whether the discussions held are 'without prejudice', or what happens if the parties aren't happy without the outcome of the mediation process. A regulation may prescribe processes and procedures for mediation,⁸ but presently the Planning Regulation 2017 does not contain any relevant provisions.

In circumstances where the parties cannot reach an agreement, the proponent can ask the Chief Executive to give a notice stating that a CBA is not required for the application. Inability to reach an agreement on a CBA is listed in the guidance (but not the legislation) as one of the circumstances in which the Chief Executive may give notice that a CBA is not required for the DA to be lodged with the assessment manager. However, the Chief Executive's power to issue that notice is entirely discretionary.

What does it look like?

There is no prescribed form or template for a Community Benefit Agreement. According to the guidance, 'the format and structure of the CBA are ultimately determined by the parties involved, allowing for flexibility to tailor the arrangement to their needs'. It is expected that the proponent will prepare the draft and provide it to council for review, although it is acknowledged that some councils may want to hold the pen on drafting the agreement, or develop a standard template. Local governments can pass on the costs of preparing a social impact assessment report, considering a social impact assessment report for the purpose of negotiating a CBA, and negotiating a CBA, including participating in mediation. The fee is payable whether or not the parties ultimately enter into a CBA.⁹

The content of a CBA cannot be grounds for refusing a development application, or directing the assessment manager to refuse an application.¹⁰ Irrespective of whether the CBA adequately manages or mitigates the social impacts of the proposed development, a CBA is only relevant to whether an application is properly made.

However, a condition of a development approval may require compliance with the CBA, or conditions may relate to the management, mitigation, counterbalancing or monitoring of a social impact of the development.¹¹

Who controls the money?

The reforms are silent on which party should control the way in which financial payments are spent. Councils wanting to control the receipt and disbursement of annual payments or financial benefits will need to consider how those payments are received. The Planning Act does not require local governments to hold financial payments in trust, but they are required to use financial contributions for the purpose in which it is made.¹² It is open for councils to establish pooled funds to achieve more impactful, legacy-scale benefits for their region, but governance and administration of regional community benefit sharing models is not legislated. It is also not clear whether the costs associated with establishing and maintaining a pooled fund and remunerating members of an advisory committee charged with making decisions on funding allocations can be properly said to be a 'community benefit', leaving questions as to who is responsible for running costs.

On the other hand, proponents who want to retain ultimate control of the financial benefits will need to think about the manner in which financial benefits are held and the implications of any reporting and audit obligations that may be requested by councils. Establishing a specific trust may give proponents greater ability to 'open the books' to prove that financial benefits are flowing from the project, but will increase the compliance burden and cost for proponents.

Things to consider when negotiating a Community Benefit Agreement

Proponents and councils will need to consider the following issues when negotiating a Community Benefit Agreement:

agreement term and payment milestones, including relevant conditions precedent and end dates;
governance and accounting arrangements around expenditure of funds, appropriate recipients, administration costs, and remuneration for community reference groups;
the potential for coordination with other CBAs;
obligations to ensure that funds are expended and properly accounted for; and
tax treatment of funding allocations.

It is important that proponents and councils give careful consideration to drafting, given that CBAs may span the operational life of the project and go through many pairs of hands in the ongoing implementation of the agreement.

Proponents also need to be aware of the following aspects of the social impact and community benefit reforms:

A change application that triggers a change to the social impact assessment may also require the re-negotiation of CBAs.
The CBA must be entered into before the DA is lodged and before planning and environment approvals are obtained. If there is a change to the scale of the project as a result of the DA or EPBC Act approval conditions (as is often the case), the CBA will need to have some flexibility in respect of how benefits are calculated.
CBAs prevail to the extent of inconsistency with other instruments, including the development approval itself and any infrastructure agreement.
CBAs are public documents. Councils also have reporting requirements on expenditure of community benefit funding in its annual financial statement.¹³ Proponents will need to consider how confidentiality obligations to third parties, such as neighbours and First Nations groups, will be impacted as a result.
The obligation for community benefits under a CBA is separate to the proponent's obligation for:
- road and infrastructure upgrades associated with a project; and
- standard council rates and contributions, although we query whether the significant escalation in rates that we have seen for renewables projects should be revisited with the introduction of CBAs.

Going forward

New wind and solar farms in Queensland will be required to undergo a social impact assessment, which will inform the development of a Community Benefit Agreement. 'It is expected that the CBA will be meaningfully linked to the outcomes of the SIA', although there is scope for local and State Governments to direct investment through setting spending priorities.

Although a CBA is required to lodge a development application for a wind or solar farm, there is little precedent for community benefits being paid to local governments, and for local government being the custodian of the social licence. The policy intent is clear, but there is a significant lack of detail in legislation and the guidance on how these agreements will be implemented over a period of several decades. It is essential that CBAs are clearly drafted, highly adaptable, and establish strong guardrails around governance and accountability.

Footnotes

1. Planning Act 2016 s106Y.

2. s.51(4).

3. s.106Y.

4. S.151.

5. S.151.

6. S.106ZB.

7. S.106ZC

8. S.106ZC(5A).

9. S.106ZM.

10. S.106ZI.

11. S.65AA(2).

12. S.106ZL.

13. Local Government Regulation 2012 s189A(1)(a)(i).

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.