This decision is subject to an application for special leave to the High Court S119/2025 filed on 21 August 2025
The New South Wales Court of Appeal’s recent decision in Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd [2025] NSWCA 163 has materially shifted the approach in the assessment of greenhouse gas emissions for major projects in New South Wales.
In this decision, the Court of Appeal made a conditional declaration invalidating the Mount Pleasant Optimisation State significant development consent (SSD 10418), which was seeking approval for a 22 year extension to the mine to December 2048, and an increase in the mine’s approved annual production rate from 10.5 Mtpa to 21 Mtpa. The conditional declaration of invalidity was declared on the basis that the Independent Planning Commission (IPC) failed to give consideration to the effects of climate change in the locality of the project, even though the assessment documentation had dealt adequately with potential climate change impacts at a regional, state, national and global level.
The matter has now been remitted to the NSW Land and Environment Court (LEC) to consider whether the LEC will enliven its powers under s25B and s25C of the Land and Environment Court Act, 1979 and make orders for conditional validity and then validity of the development consent. However, even if the LEC makes these orders, this will not displace the key finding by the Court of Appeal concerning the need to consider impacts on the locality.
In this article, we cover the key implications and risks arising from the case and the broader trends that we are seeing for emissions intensive projects.
Key implications for proponents of emissions intensive projects in New South Wales
The judgment makes it clear that any development consent for a project with material greenhouse gas emissions will be vulnerable to judicial review proceedings unless the consent authority has adequately considered how climate change is likely to affect the project’s immediate surrounding environment and neighbouring communities. It is not sufficient to assess the wider potential impacts of climate change alone. Potential local impacts of climate change which may need to be considered could include increased bushfire frequency, prolonged dry periods and irregular precipitation patterns.
The Court of Appeal reached this conclusion on the basis that section 4.15(1)(b) of the Environmental Planning and Assessment Act 1979 (NSW) requires a consent authority to take into consideration ‘the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality’.
The Court of Appeal, however, did not accept the Applicant’s argument that the IPC failed to consider section 2.20 of the State Environmental Planning Policy (Resources and Energy) 2021 when granting development consent, by not adequately considering whether conditions dealing with Scope 3 emissions should have been imposed. Rather, the Court held that Scope 3 emissions were directly considered by the IPC, and, following that consideration, it was a matter for the IPC to determine whether or not to impose conditions in relation to Scope 3 emissions.
Key steps to minimise approval risks arising from this judgment
Proponents of emissions intensive developments should consider including detailed assessment of the potential impacts of climate change on the surrounding locality in its assessment documentation. This will enable the relevant consent authority to give adequate consideration to this mandatory consideration, and minimise the likelihood of successful judicial review proceedings challenging the grant of development consent.
Trends relevant to emissions intensive projects
The Mount Pleasant decision forms part of a broader trend that we are seeing. That is, NSW regulators are increasingly scrutinising greenhouse gas impacts and developing more stringent standards.
The trend is, in part, a result of legislated emissions reduction targets under the Climate Change (Net Zero Future) Act 2023 of a 50% reduction by 2030, a 70% reduction by 2035, and net zero by 2050 (against a 2005 baseline).
It is also, in part, a result of activist litigation like this recent Mount Pleasant decision. Indeed, it was the decision in Bushfire Survivors for Climate Action Incorporated v Environment Protection Authority [2021] NSWLEC 92 in which the Court specifically ordered the NSW Environment Protection Authority (EPA) to develop environmental quality objectives, guidelines and policies “to ensure environment protection from climate change”. Since that decision, the EPA has progressively expanded its role with respect to greenhouse gases and climate change.
In practice, we have seen that the Department of Planning, Housing and Infrastructure has increasingly given significant weight to agency advice from the EPA on greenhouse gas issues. This focus on emissions and the need to address (to the Minister’s satisfaction) the issues raised by the EPA as part of third-party stakeholder engagement can result in significant delays to the assessment and approval of State significant development applications. Relevantly, the EPA prepares its agency advice in the context of its NSW Guide for Large Emitters released earlier this year, which should be carefully reviewed and complied with by proponents and incorporated into assessment documentation where appropriate.
In this respect, the DPHI has recently imposed conditions on State significant development approvals which, for example:
- require the preparation and periodic update of a Greenhouse Gas Management Plan satisfactory to the Planning Secretary;
- carry out three yearly reviews of greenhouse gas abatement measures to the satisfaction of the Planning Secretary; and
- impose greenhouse gas performance measures, which if exceeded must be offset using a mechanism to the satisfaction of the Planning Secretary.
Meanwhile the EPA is continuing to roll out its own climate change policy and action plan. The EPA is currently consulting on proposed new requirements for holders of environment protection licences including:
- Climate Change Licensee Requirements
- Climate Change Mitigation and Adaptation Plans: Mitigation Requirements
- Greenhouse Gas Mitigation Guide for NSW Coal Mines.
Submissions can be made until Tuesday 7 October 2025 (see here).
In this context, it has never been more important to consider the implications of greenhouse gas emissions in NSW, both for new projects and existing operations, and to develop effective greenhouse gas mitigation solutions.
Please reach out if you require any advice on the implications these matters have on your project.
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