What has happened?
In MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35, the High Court of Australia dismissed an appeal by the operator of the Mount Pleasant coal mine in the Upper Hunter. By a 3:2 majority, the Court held that the Independent Planning Commission's (Commission) approval of a major expansion of the mine was affected by jurisdictional error.
The error was that the Commission did not consider whether to impose conditions to minimise the project's "scope 3" greenhouse gas emissions, which make up 98 per cent of the project's total emissions.
Context
In 2022, the Commission approved an extension of the mine's life by 22 years, to 2048. The extension would allow an additional 406 million tonnes of coal to be extracted and double the annual production rate to 21 million tonnes.
Greenhouse gas emissions are commonly divided into three categories:
scope 1: emissions released directly by the activity, such as fugitive methane from the mine;
scope 2: emissions from the energy the facility buys and uses; and
scope 3: other indirect emissions, here mainly from burning the coal, largely overseas.
A local community group, DAMSHEG, sought judicial review. The Land and Environment Court dismissed the challenge. The Court of Appeal allowed DAMSHEG's appeal, holding that the Commission had failed to consider the impacts of climate change "in the locality" of the mine under s 4.15(1)(b) of the Environmental Planning and Assessment Act 1979 (EPA Act).
MACH appealed to the High Court. DAMSHEG argued that the Court of Appeal's decision should in any event be upheld on a different ground: that the Commission had failed to comply with s 2.20 of the State Environmental Planning Policy (Resources and Energy) 2021 (Resources SEPP).
Issue 1: impacts "in the locality"
All five justices held that the Court of Appeal had misread s 4.15(1)(b). That provision requires a consent authority to consider "the likely impacts of that development", and the words that follow describe some of the kinds of impacts included. The impacts "in the locality" are not the central focus. If an impact is not confined to the locality, the provision does not elevate its local effects above its effects elsewhere.
The Commission had considered the project's contribution to global climate change, which necessarily encompassed its local effects. It had also considered the environmental impact statement material on local climate risks and imposed bushfire and water management conditions. It was not required to refer specifically to every local effect in its reasons. The level of detail at which a relevant impact is considered is ordinarily a matter for the consent authority.
Issue 2: conditions to minimise scope 3 emissions
Section 2.20(1)(c) of the Resources SEPP requires a consent authority, before granting consent for mining, petroleum production or extractive industry, to consider whether to impose conditions to ensure "that greenhouse gas emissions are minimised to the greatest extent practicable".
The majority (Gordon, Edelman and Beech-Jones JJ) held that:
"greenhouse gas emissions" in s 2.20(1)(c) includes scope 3 emissions;
the Commission's reasons dealt in detail with conditions to minimise scope 1 and 2 emissions, the remaining 2 per cent, but did not consider conditions for scope 3 emissions. Instead, it treated those emissions as accounted for under the Paris Agreement in the countries where the coal would be burned;
the fact that no party had proposed scope 3 conditions did not remove the Commission's duty, given the public interest at stake in a decision of this kind; and
the error was material, because there was a realistic possibility that the decision could have been different.
Chief Justice Gageler and Justice Jagot dissented. They inferred from the Commission's reasons that it had considered the issue, concluding that the scope 1 and 2 conditions, read with the international and national policy framework, were enough to minimise all of the project's emissions.
The Court also rejected MACH's argument, based on the Court of Appeal's earlier decision in Ross v Lane, that a failure to consider these matters could not invalidate a consent. The reasoning in that case was criticised.
What happens next?
The matter returns to the Land and Environment Court. That Court must consider whether, instead of declaring the consent invalid, to make orders under the Land and Environment Court Act 1979 suspending the consent or specifying terms on which it can be validated. The High Court emphasised that it was not reviewing the merits. It did not decide what conditions, if any, should be imposed on scope 3 emissions.
How will this affect you?
Mining, petroleum and extractive industry proponents should address scope 3 emissions directly in their environmental assessment. This includes what measures could minimise them or why conditions are not practicable, rather than relying on the fact that they are counted elsewhere.
Consent authorities should expressly consider each limb of s 2.20(1) of the Resources SEPP, for all scopes of emissions, and record that consideration in their reasons.
Existing approvals that adopted similar reasoning may be open to challenge, subject to the statutory time limits for challenging a consent.
All development: the decision clarifies that s 4.15(1)(b) is concerned with a development's likely impacts generally, not only its local impacts. It also confirms that the consent authority generally decides how much detail is required.
Further information
For further information please contact Darren Bick, Director, on +61 416 167 556 or darren.bick@bicksteele.com.au.