Last month I wrote a long post about the legal risks that would be involved if regulators in Aotearoa New Zealand were to approve Bathurst’s application for the Denniston coal project.
A couple of things have happened since then, so in this post I’ll try to make sense of developments.
First, the EPA’s rejection of Bathurst’s fast-track application causes delays to the project, although it doesn’t stop it. Second, legal advancements in New South Wales bring the combustion emissions argument closer to home.
Environmental Protection Authority returns Bathurst’s fast-track application
Under section 46 of the Fast-Track Approvals Act (FTAA), the Environmental Protection Authority (EPA) returned the application to Bathurst as incomplete. The EPA had asked Bathurst for more information about how it would protect native wildlife in the area, especially lizards. Despite further information being provided, the EPA found that the application still did not comply.
Although this has nothing to do with the combustion emissions issue that I argued should cause the EPA to seriously consider returning the application, it’s a clear set back for the Denniston proposal, causing further delays. Bathurst, of course, will probably just revise and resubmit the application. But the timeline will begin again under s 46(5) FTAA.
If Bathurst reapplies, and if the EPA accepts the application, and if it gets through to the panel stage, there’ll be something else to think about:
A new landmark ruling from NSW: the Mount Pleasant mine and downstream combustion emissions
Today the High Court of Australia released its ruling in Mach Energy Australia v Denman Aberdeen Muswellbrook Scone Healthy Environment Group [2026] HCA 35. The case concerned a proposed extension of the Mount Pleasant coal mine, enabling an extra 406 million tonnes of coal to be extracted over 22 years. About 98% of the projected emissions from the project would be scope 3—the vast majority of which would be downstream combustion emissions.
This case was different to the Denniston one, in that Mach Energy’s Environmental Impact Statement accompanying its proposal already identified scope 3 emissions—most of which came from downstream combustion.
The consent authority granted consent to the project. In doing so it noted that most of the coal would be exported, and stated that under the Paris Agreement, scope 3 emissions are attributed to the country within which they are emitted, and would be “appropriately regulated and accounted for”. It did not consider whether to impose conditions to minimise scope 3 GHG emissions.
By a 3-2 majority, the High Court of Australia held that the consent authority’s approval of the mine extension was invalid, because it had failed to consider how to mitigate the greenhouse gas emissions that would be generated by the mine when the coal is exported and burnt overseas, as required by cl 2.20(1)(c) of the State Environmental Planning Policy (Resources and Energy) 2021 (NSW) and s 4.15(1)(a)(i) of the Environmental Planning and Assessment Act 1979 (NSW). Clause 2.20(1)(c) of the Resources SEPP required the consent authority to consider “whether or not the consent should be issued subject to conditions aimed at ensuring…that greenhouse gas emissions are minimised to the greatest extent practicable”.
It was held that the meaning of “greenhouse gas emissions” in this clause included scope 3 emissions. Edelman J said cl 2.20(1)(c) Resources SEPP ‘does not exclude from the ambit of minimisation conditions those emissions that might be accounted for, or even regulated, by other countries’ (para. 239). The judgment of Gordon J noted that there is no reference to emissions scopes in the UNFCCC, Paris Agreement, or any other international law at the treaty or customary level: ‘The impact of greenhouse gas emissions is the same, regardless of how they are categorised.’ (para. 182)
Implications for Denniston
It’s a different fact pattern. And there is no comparable provision to cl 2.20(1)(c) Resources SEPP in the FTAA: the only sections of the FTAA that on their face enable conditions to be set are ss 84-84AA, and neither of these requires the panel to consider any conditions at all, let alone specifying the consideration of minimising GHG emissions.
But let’s look more closely at the FTAA. As I outlined in the previous post, under s 85(3) a panel may decline to approve an application if it forms the view that (a) there are one or more adverse impacts in relation to the approval sought; and (b) those adverse impacts are sufficiently significant to be out of proportion to the project’s regional or national benefits, “even after taking into account – (i) any conditions that the panel may set in relation to those adverse impacts; and (ii) any conditions or modifications that the applicant may agree to or propose to avoid, remedy, mitigate, offset, or compensate for those adverse impacts.”
Implicit in s 85(3)(b) is a requirement that the panel consider conditions. Think about it: if there weren’t an implicit requirement that the panel take into account possible conditions after determining that there is an adverse impact, the subsection would make no sense.
As I argued in the previous post, it’s highly likely that the effect on global warming of the combustion emissions from the mine constitutes an adverse impact. So the panel, if it found this adverse impact existed, would then be required to consider any conditions it could set or that the applicant might agree to, to avoid, remedy, mitigate, offset or compensate for the GHG emissions generated by the mine when the coal is burnt.
That in my view is the real implication of the High Court of Australia’s judgment in Mach Energy v DAMSHEG: its reasoning can be applied by analogy to bolster the case for the consideration of conditions under s85(3) to include conditions relating to downstream combustion emissions.
Next steps
We’ll see, when Bathurst inevitably reapplies, whether it makes the right decision to include downstream combustion emissions in its application. If it does not, as I argued before, the EPA has the option to reject the application (again). If the EPA accepts the application, it is then open to the panel to find an adverse effect that is sufficiently significant to be out of proportion to the project’s benefits. Finally, if the panel approves the application regardless, it is then open to anyone who submitted on the application to appeal. There’s still a long way to go.
