Bathurst Resources recently filed an application under New Zealand’s “fast-track” legislation to open the largest coal mine in the country’s history on the Denniston Plateau in Te Waipounamu / the South Island. In this post I’ll explain why a decision to approve the Denniston mine would carry both domestic and international legal risk. Along the way I’ll touch on why there’s no room for new coal mines in Aotearoa New Zealand (or anywhere in the world) if the world is going to stay within its Paris Agreement temperature guardrails. Grab a cup of tea, this post is 5,000 words long.

Background

Australian-listed mining company Bathurst Resources recently filed an application under New Zealand’s “fast-track” legislation to open the largest coal mine in the country’s history on the Denniston Plateau in Te Waipounamu / the South Island. The mine would cover an area of 3,000 hectares (seven times the size of Auckland’s CBD), including on public conservation land, and in an area with unique and rare ecosystems and species. As part of the project, 20 million tonnes of coking coal would be mined for export over 25 years, resulting in emissions of at least 53 million tonnes (for context, New Zealand’s entire annual net emissions is 59 million tonnes).

One key feature of Bathurst’s application for the Denniston mine is that its climate assessment excludes all emissions from the downstream combustion of the mined coal. This is a key issue that I’ll get on to later.

Due to the timing of the application, it can’t be approved before New Zealand’s general election on 7 November 2026. Depending on the outcome of the election, Bathurst’s application may be declined, or indeed the fast-track legislation may be scrapped altogether. But I write the following analysis under the assumption that after the election the government in power is minded to approve Bathurst’s application.

Scientific context: No room for new coal mines in a 1.5C world

But let’s take a step back. There is an emerging scientific consensus that there is no need, and indeed no room, for new coal mines if the world is to stay within Paris Agreement temperature guardrails. In the International Energy Agency’s (IEA) Net Zero Emissions by 2050 Scenario (NZE), first published in 2021, there is no need for new coal mines (or indeed, new oil and gas fields). This is because committed emissions from existing and under-construction oil and gas fields and coal mines take the world far past the global ‘carbon budget’ that can be emitted if the world is to have a fair chance of stabilising global temperatures. Developed coal mines alone break this budget. In 2023 it was calculated that almost 60% of the fossil fuels within already operating or under-construction extraction sites cannot be burned if the world is to stay within the 1.5C limit (a figure that has no doubt only risen since).

In this context, there is no room for new coal extraction infrastructure. One reason for this is that, from a political economy perspective, it’s generally much easier to stop new coal mines than close existing ones: existing projects have had capital sunk into them, meaning their developers’ interests lie in continuing to operate them for as long as economically feasible. In addition, legal barriers often also exist to governments enacting regulations that decrease the value of existing investments (i.e. international investment law).

Okay, so that’s a global analysis. Does it allow for any regional/national variation? What if mining coal in New Zealand stops coal from being mined elsewhere? The short answer is: not really—there’s no atmospheric exemption for New Zealand coal (h/t Kevin Anderson). To draw on Anderson’s excellent analysis: the atmosphere does not distinguish between a tonne of CO2 and another tonne of CO2, no matter where they are emitted from. If New Zealand develops additional coal production, that does not mean an equivalent quantity of production elsewhere automatically stops. Rather, doing so would add additional coal supply to an international market.

Domestic legal risk: potential unlawfulness of not taking combustion emissions into account in environmental impact assessment

If the Denniston mine is consented, this decision could be challenged on appeal to the High Court. Precedents from the United Kingdom, Norway, the European Court of Human Rights, and the advisory opinion of the International Court of Justice (ICJ) support the position that it is unlawful for a decision-maker to not take combustion emissions into account when making a decision to provide consent for upstream fossil fuel infrastructure. That’s certainly not the only ground on which an appeal application could be made – but it’s the one I know the most about and hence will focus on here. This section addresses the UK, Norway, European, and international law elements in turn, then draws implications for the Denniston mine.

United Kingdom: Finch v Surrey County Council

On 20 June 2024, Lord Leggatt handed down the judgment of the United Kingdom Supreme Court in Finch v Surrey County Council [2024] UKSC 2020. In this case, the Supreme Court found, in a reversal of the decisions of the lower courts, that the Surrey County Council acted unlawfully in its grant of planning permission for an oil extraction development at Horse Hill, because it failed to assess the greenhouse gas (GHG) emissions that will inevitably arise from the combustion of the oil (so-called ‘Scope 3’ emissions).

The case turned on the interpretation of Directive 2011/92/EU as amended by Directive 2014/52/EU (‘the EIA Directive’) and the Town and Country Planning (Environmental Impact Assessment) Regulations 2017 (‘the 2017 Regulations’), which transpose the EIA Directive into UK law.

The basic rule is that planning permission cannot be granted for projects that are likely to have significant effects on the environment unless an EIA has been carried out in respect of that development (article 2(1); Regulation 3). The EIA must ‘identify, describe and assess in an appropriate manner…the direct and indirect significant effects’ of the project on specified environmental factors, one of which is ‘climate’ (article 3(1); Regulation 4(2)). This description should cover ‘the direct effects and any indirect, secondary, cumulative, transboundary, short-term, medium-term and long-term, permanent and temporary, positive and negative effects of the project’ (EIA Directive, Annex IV, para. 5). The Finch case concerned the interpretation of those words.

The Supreme Court reasoned that whether Scope 3 emissions constituted “direct or indirect significant effects” of the project on climate was a question of causation (para. 65). It was agreed among the parties that it was ‘inevitable’ that the extracted oil would be sent to refineries and that the refined oil would eventually undergo combustion, which would produce GHG emissions (para. 7).  

The Supreme Court found that the causal connection between the proposed project and the resulting Scope 3 emissions satisfied not only the “but-for” test, but the ‘strongest possible test of causation’, which ‘requires the occurrence of event X to be both a necessary and sufficient condition for the occurrence of Y’ (paras. 68-69, 79-80). In this case, it was ‘known with certainty’ that the extraction of oil ‘would initiate a causal chain that would lead to the combustion of the oil and release of greenhouse gases into the atmosphere’ (para. 79). Thus, ‘the extraction of the oil is not just a necessary condition of burning it as fuel; it is also sufficient to bring about that result because it is agreed that extracting the oil from the ground guarantees that it will be refined and burnt as fuel’ (para. 79). Indeed, as the court put it early in the judgment (para 2):

The whole purpose of extracting fossil fuels is to make hydrocarbons available for combustion. It can therefore be said with virtual certainty that, once oil has been extracted from the ground, the carbon contained within it will sooner or later be released in the atmosphere as carbon dioxide and so will contribute to global warming.

The Supreme Court rejected the High Court’s argument that because the oil would undergo an intermediate process of being refined in a separate facility, this disrupted the chain of causation between the extraction and the Scope 3 emissions, finding that ‘[t]he process of refining crude oil does not alter the basic nature and intended use of the commodity’ (paras. 118-126).

On the distinction between “direct” and “indirect” effects, the court found that on a natural, social-sciences definition of a direct effect as ‘an event which is not mediated by one or more variables’, combustion emissions are direct effects of the extraction of oil ‘because they are almost entirely independent of any intermediate variables’; that is, ‘there is no need to know anything about where the oil will go after it is extracted or what the oil will be used for or when or where it will be burnt’ (paras. 84-85). An alternative definition of “indirect effects/impacts” is found in the European Commission’s 2013 Guidance on Integrating Climate Change and Biodiversity into Environmental Impact Assessment: ‘Effects/impacts that occur away from the immediate location or timing of the proposed action…or as a consequence of the operation of the project’. On this definition, the court found, combustion emissions are indirect effects of the oil extraction project (paras. 88-90).

Subsequently to the litigation, the United Kingdom released new guidance that requires oil and gas companies to consider end-use emissions associated with oil and gas production in their environmental impact assessments when applying for development consents.

Norway: Greenpeace Nordic & Natur og Ungdom v Norway

The Finch case followed similar litigation in Norway. In January 2024, the Oslo District Court in Greenpeace Nordic and Natur og Ungdom v The State of Norway (represented by the Ministry of Petroleum and Energy) (Case No 23-099330TVI-TOSL-05) decided that in implementing the EIA Directive in relation to development consent for three oil and gas extraction projects (Breidablikk, Tyrving, and Yggdrasil), there was a ‘legal requirement to assess the environmental impact of combustion emissions’, as they were ‘such a significant and particularly characteristic effect of these kind of projects that they must clearly be considered indirect climate effects’ within the meaning of the EIA Directive (pp. 26, 53-56).

The Court held that the wording of the EIA Directive was broad, with no distinction made between direct and indirect greenhouse gas emissions (p. 52). It said, ‘[t]he whole purpose of petroleum extraction is to make geologically stored carbon available in the form of oil or gas’, and that GHG emissions ‘from the carbon are thus both an inevitable and intentional effect from the project’ (p. 53). Indeed, if combustion emissions were not included, the provisions of the EIA Directive on the assessment of indirect climate impacts from petroleum operations would ‘in practice have no real content (p. 54).

Europe: Greenpeace Nordic v Norway and the EFTA advisory opinion

On appeal from the Norwegian district court decision, the Borgarting Court of Appeal requested an advisory opinion from the EFTA Court. In its judgment, the EFTA Court agreed with the Oslo District Court and held that environmental impact assessments of a petroleum project’s probable significant effects on the environment must include ‘a reasoned estimate of the greenhouse gas emissions that are likely to result from the subsequent combustion of petroleum and natural gas extracted in the course of a project’ (paras. 89, 99).

In so holding, the court noted that ‘the release of greenhouse gas emissions is very likely to follow the antecedent action of extracting petroleum and natural gas in a project such as that at issue’; ‘[i]f not for the project, the embedded greenhouse gases would stay below ground’, such that ‘the extraction of the petroleum and natural gas represents a necessary precondition of burning it as fuel, thereby releasing emissions with an impact on the climate’ (para. 69).

In parallel to the domestic case in Norway, the two organisations applied to the European Court of Human Rights (ECtHR) for relief. On 28 October 2025, the ECtHR handed down its decision. It found that Article 8 of the European Convention on Human Rights (right to respect for private and family life) imposes the procedural obligation on States to conduct an adequate, timely and comprehensive environmental impact assessment in good faith and based on the best available science before authorising a potentially dangerous activity that may be harmful to the right for individuals to effective protection from serious adverse effects of climate change (paras. 292, 314-319).

The Court considered that petroleum would not have been extracted but for the opening of an area for extraction and the granting of production licences, and the fact that other events and permits are also necessary before extraction can take place does not break that chain of causation (para. 294).

The Court therefore held that environmental impact assessment must include not only direct GHG emissions from the project itself, but also combustion emissions ‘both within the country and abroad’ (para. 319).

International law: the ICJ Advisory Opinion on Climate Change

On 23 July 2025 the ICJ delivered its landmark Advisory Opinion on the Obligations of States in Respect of Climate Change. The opinion provides authoritative legal guidance on states’ obligations to address climate change and prevent significant harm to vulnerable countries and communities. While the opinion is non-binding, it makes clear that failure to act can trigger legal consequences.  

After reaffirming that due diligence includes the duty to conduct EIAs for activities undertaken within a state’s jurisdiction or control, the ICJ ruled that end-use emissions from burning extracted fossil fuels must be considered in EIAs for fossil fuel projects. It observed that ‘possible specific climate-related effects must be assessed as part of EIAs at the level of proposed individual activities, e.g., for the purpose of assessing their possible downstream effects’ (para. 298). While the court used the word “downstream,” meaning that in the context of a project proposal for fossil fuel extraction, it could refer to a number of different emissions categories under the GHG Protocol, the most significant such category is the so-called Scope 3, Category 11 emissions that come from burning the extracted fuel.

It is, the ICJ said, for each state “to determine in its domestic legislation or in the authorization process for the project, the specific content of the environmental impact assessment required in each case” (para. 298). However, this must be read subject to the court’s above statement that downstream effects must be assessed where relevant.

Corroborating this interpretation is the statement earlier in the court’s opinion on the scope of the relevant conduct for the purposes of the advisory proceedings. Such conduct ‘is not limited to conduct that, itself, directly results in GHG emissions, but rather comprises all actions or omissions of States which result in the climate system and other parts of the environment being adversely affected by anthropogenic GHG emissions,’ including ‘both consumption and production activities’ (para. 94). Fossil fuel production, then, is “relevant conduct” that can be subject to international law. Reading the court’s statements on EIAs in light of this consideration, it is even clearer that EIAs must, in the case of proposed fossil fuel production projects, consider end-use emissions from burning extracted fossil fuels.

In a joint declaration, Judges Bhandari and Cleveland elaborated on this aspect of the Court’s opinion. Stating that fossil fuel emissions ‘contribute overwhelmingly to climate change,’ and that it is ‘unimaginable that States can achieve their obligations … without a rapid and drastic reduction in—and the phasing out of—fossil fuel production and dependency’ (para. 1), the judges highlighted that fossil fuels ‘are produced in order to be burned,’ and that states “must therefore factor these consequences into their assessment of the harms that such production contributes to the climate system” (para. 14). In other words, ‘States are required to account, in their assessments of environmental risk, for the increased concentration of GHGs in the atmosphere that will foreseeably result from, inter alia, production, licensing and subsidy activities’ (para. 15). Judges Bhandari and Cleveland specifically stated that this obligation stems not only from the due diligence obligations, but also their obligations under Article 2 (objectives) and Article 4 (nationally determined contributions) of the Paris Agreement (para. 15).

Implications for Denniston Coal

The application for the Denniston mine was submitted under the Fast-Track Approvals Act 2024 (FTAA). Under Article 43(3)(a) and Schedule 5 (clauses 5 to 9) of the FTAA, the application must include an assessment of the ‘actual and potential effects’ on the environment, including ‘any effect on natural and physical resources that have aesthetic, recreational, scientific, historical, spiritual, or cultural value, or other special value, for present or future generations’. Arguably the atmosphere is a resource with such special value. It also must cover ‘any discharge of contaminants into the environment and options for the treatment and disposal of contaminants’; arguably GHG emissions are such a contaminant.

The same reasoning at play in Finch and Greenpeace Nordic applies to the Denniston case. Combustion emissions are an inherent result of mining coal. The very purpose of mining the coal from Denniston would be to sell that coal so that it could be burned for energy. If whether something is an “actual effect” of the project is a test of causation, the test is clearly passed. Arguably, then, the legal interpretation of “actual effects”, on the face of those words, includes combustion emissions.

Is this a pretty simple approach to statutory interpretation? Yes. Could a more holistic assessment, including the statutory purpose, change this answer? I don’t think so. Experts in New Zealand statutory interpretation/fast track legislation are welcome to chime in.

 I therefore see the following implications/possibilities for the Denniston mine application:

• 1. The Environmental Protection Authority could return the application at this stage

Notably, the Environmental Protection Authority (EPA) has the opportunity to decide whether the application is ‘complete and within scope,’ within 15 working days after receiving it (article 46 FTAA). If not satisfied, the EPA can return the application to Bathurst. Here the EPA has an opportunity to do the right (and arguably required by law) thing and return the application to Bathurst on the ground that it does not include an assessment of combustion emissions.

• 2. The panel could decline the application

The panel could decide to decline the approval (under articles 81(1)(b) and 85(3) FTAA) if there exist adverse impacts that are ‘sufficiently significant to be out of proportion to the project’s regional or national benefits’, even after any conditions or modifications that the panel may set to avoid, remedy, mitigate, offset, or compensate for those adverse effects. There is no requirement for the panel to do so, but it may.

The climate impacts of burning the coal mined from Denniston are indeed out of proportion to any domestic benefits that could be gained from the associated revenues. According to a recent Nature paper, one tonne of emissions in 2020 under conservative assumptions results in around USD 1,000 of damages globally through 2100. Through a simple calculation, one sees that if all 53 million tonnes of emissions resulting from the Denniston mine had been emitted in 2020, this would result in USD 53 billion in damages by 2100 (of course, all emissions from the potential mine will be emitted well after 2020, but the figure stands as a rough estimate). Compare that with the possible revenue of around USD 5.4 billion (calculated on the basis of a USD 271 per tonne cost for coking coal on global markets, the cost on the date of writing this post).

Regarding the possible setting of conditions, it is inherent in the nature of coal mining that there is nothing that can be done to avoid or mitigate the effects of burning that coal later. A condition that Bathurst purchase offsets for burning the coal is a possibility, but would be so expensive that it would possibly render the mine uneconomic (to say nothing of the unreliability of offsets).

• 3. If the application is approved, an appeal may be taken to the High Court

While the right to appeal is limited under the FTAA (article 99) to questions of law, whether it is lawful for an environmental impact assessment to not consider combustion emissions is clearly a question of law. Any person or group who provided comments in the formal process may appeal to the High Court, and then for leave to appeal to the Supreme Court.

The key takeaway here is that there are options. The EPA has options. The decision panel has options. And if the panel approves the mine application, individuals and groups who were involved in the decision process have the option to take a legal case on the grounds outlined above.

International legal risk: opening new coal mines incompatible with international legal obligations

This section draws heavily on a published (paywalled) article I co-authored with Tejas Rao.

The legal risk of approving the Denniston mine is not only domestic, it is international too.

New Zealand has recognised the jurisdiction of the ICJ as compulsory. The International Court of Justice (ICJ) advisory opinion on climate change means that the contentious jurisdiction of the ICJ could be utilized by willing states to challenge new and existing fossil fuel extraction licenses and permits.

This in turn means that if the New Zealand government approves a new coal mine, like the Denniston mine, it could be subject to a legal case from another country at the ICJ.

This claim could be made under the international legal duty to prevent significant harm to the environment. This duty arises when there is a risk of significant harm to the environment: ‘either where no harm has yet been caused but the risk of future significant harm exists, or where some harm has already been caused and there exists a risk of further significant harm’ (ICJAO, para. 274). This potentially includes the situation where a coal mine has been approved but no coal has yet been extracted and burned. In that situation, only a small amount of harm has already been caused, due to the operational emissions of opening the mine; however, there is a risk of future significant harm due to the fact that substantial amounts of coal would be extracted and burned. It also potentially includes the situation where a coal mine is actively producing.

A State, like New Zealand, could argue that issuing a single coal mine consent does not constitute a risk of ‘significant harm’, since any one extraction project contributes a very small amount of emissions in the context of global total emissions. Such “drop in the ocean” arguments will most likely not be accepted by the ICJ, however: the Court makes clear that a risk of significant harm ‘may also be present in situations where significant harm to the environment is caused by the cumulative effect of different acts undertaken by various States and by private actors subject to their respective jurisdiction or control’, such that individual conduct can give rise to the obligation to prevent ‘even if such activity is environmentally insignificant in isolation’ (paras. 276-277). Thus, even if the burning of coal from an individual coal mine would contribute only a small fraction of global emissions, there may well be a risk of significant harm since it would have a cumulative effect together with combustion from all other coal mines.

According to the ICJ in Pulp Mills, the principle of prevention has its ‘origins in the due diligence that is required of a State in its territory’, and requires the state ‘to use all the means at its disposal’ to avoid environmental harm (para 101). This is an obligation of conduct rather than result, which entails (para. 197):

…not only the adoption of appropriate rules and measures, but also a certain level of vigilance in their enforcement and the exercise of administrative control applicable to public and private operators, such as the monitoring of activities undertaken by such operators.

According to the ITLOS Seabed Disputes Chamber, the obligation of due diligence is ‘an obligation to deploy adequate means, to exercise best possible efforts, to do the utmost, to obtain this result’ (para. 110). The ICJ has held that, in addition to the substantive obligation to take, ‘to the best of their ability, appropriate and, if necessary, precautionary measures’ (ICJAO, para. 136), there are two procedural obligations attached to the obligation of due diligence, an obligation to carry out an environmental impact assessment, and an obligation to notify and consult in good faith (Certain Activities, para. 104):

to fulfil its obligation to exercise due diligence in preventing significant transboundary environmental harm, a State must, before embarking on an activity having the potential adversely to affect the environment of another State, ascertain if there is a risk of significant transboundary harm, which would trigger the requirement to carry out an environmental impact assessment …. If the environmental impact assessment confirms that there is a risk of significant transboundary harm, the State planning to undertake the activity is required, in conformity with its due diligence obligation, to notify and consult in good faith with the potentially affected State, where that is necessary to determine the appropriate measures to prevent or mitigate that risk.

The standard of due diligence, according to the ITLOS Seabed Disputes Chamber, ‘varies depending on the particular circumstances to which an obligation of due diligence applies’ (ITLOS AO, para. 239). The determination of what is required by due diligence calls for an assessment in concreto of what is reasonable under the specific circumstances in which a State finds itself (ICJ AO, para. 137). However, in general the Court has found that the standard of due diligence for preventing significant harm to the climate system is ‘stringent’, since climate change poses a risk of ‘a general and urgent character’ (paras. 137-138).

When it comes to fossil fuel expansion, it makes sense that the standard of due diligence is stringent. The gravity of the outcome if states continue to expand fossil fuel production is immense: going beyond 1.5°C of warming is predicted to have devastating outcomes for people and the planet, including potentially triggering “tipping points” that will accelerate warming.

The ITLOS Seabed Disputes Chamber has noted that ‘[t]he content of ‘due diligence’ obligations…may change over time as measures considered sufficiently diligent at a certain moment may become not diligent enough in light, for instance, of new scientific or technological knowledge’ (para. 117). Similarly, the ICJ has said that ‘where there is generally recognized scientific evidence that it is highly probable that significant harm will occur, the standard of due diligence will be more demanding for all States’ (para. 283). The state of scientific knowledge regarding the perils of new fossil fuel production developments is summarised above. In summary, the science is clear that new fossil fuel production infrastructure, and even a significant proportion of existing infrastructure, is incompatible with avoiding dangerous levels of climate change.

The substantive requirement of due diligence, to take appropriate measures to the best of their ability, includes but is not limited to putting in place ‘regulatory mitigation mechanisms that are designed to achieve the deep, rapid, and sustained reductions of GHG emissions that are necessary for the prevention of significant harm to the climate system’ (para. 282). This arguably includes regulatory measures to end licensing of new fossil fuel exploration and consenting of new fossil fuel extraction projects, to phase out fossil fuel subsidies, as well as to phase down fossil fuel production in a just and orderly manner in accordance with their capacities. The ICJ in the Climate Change Advisory Opinion found that (para. 427):

Failure of a State to take appropriate action to protect the climate system from GHG emissions—including through fossil fuel production, fossil fuel consumption, the granting of fossil fuel exploration licences or the provision of fossil fuel subsidies—may constitute an internationally wrongful act which is attributable to that State.

This statement clearly establishes that activities relating to fossil fuel production, as well as consumption, can breach international law. Earlier in its judgment the Court recognised that international obligations of states with respect to climate protection fully encompass ‘activities such as the production, licensing, and subsidizing of fossil fuels’ (para. 94). In addition, the joint declaration of Judges Bhandari and Cleveland noted that the due diligence obligation to prevent transboundary harm requires states to:

adopt and enforce regulations consistent with reducing global dependence on fossil fuels. This includes phasing out the production and use of fossil fuels, transitioning away from fossil fuels and regulating fossil fuels in a manner that does not undermine global co-operation to achieve these goals, including with respect to subsidies.

Given that no new coal mines are compatible with the 1.5C temperature guardrail, it could be that any government decision to open a new coal mine would be considered a failure of a State to take appropriate action to protect the climate system from GHG emissions that would constitute an internationally wrongful act. In addition, given that burning the fossil fuels from already-operating and under construction coal mines would take the world beyond 1.5C of warming, it may be that a government’s failure to close a significant proportion of its fossil fuel extraction facilities early would also constitute an internationally wrongful act.

Notably, states with greater resources and technical capabilities (like New Zealand) face more demanding due diligence obligations. The ICJ AO noted that states with greater capacities and sufficient resources must ‘do more than a State not so well placed,’ and may be required to provide financial and technological assistance to facilitate transitions in less-capable states (paras. 290-292).

In conclusion, then, it is arguable that the substantive due diligence obligation under the duty to prevent significant transboundary harm requires New Zealand to adopt measures to phase out their fossil fuel production, and their fossil fuel subsidies, in a manner aligned with the 1.5°C goal, including not opening any new oil and gas fields or coal mines, and closing existing extraction facilities early. While of course it is a political question as to whether any other State would in fact take a legal case against New Zealand for, or in part for, opening the Denniston mine, it is a risk that should not be understated. Vanuatu has already made veiled threats against Australia for its fossil fuel expansion.

Conclusion

This blog post has outlined some domestic and international legal risks that would arise if the New Zealand government were to approve Bathurst’s application to develop the Denniston mine under the Fast-track Approvals Act. Quite aside from the moral, ethical, environmental, cultural, social, and political questions that Bathurst’s application brings up, the legal questions are significant and deserve full attention from the EPA, the decision panel, the Minister, the funders of the mine (ANZ Bank, looking at you!) and the public.