High Court rejects major coal mine extension in “landmark judgment” based on climate change impacts

Australia’s High Court has upheld an appeal against the approval by the New South Wales Independent Planning Commission (IPC) of an extension of a major coal mine in the state because of its local climate impacts, a decision environmental groups say could affect 17 coal proposals in the planning pipeline.

The NSW government, though, indicated it would “closely engage” with the proponent, MACH Energy, as it continued to pursue options for the project

The majority High Court decision, released on Wednesday, upheld the unanimous NSW Court of Appeal ruling that the IPC had failed a mandatory legal obligation to consider the regional impacts of burning coal exported by MACH Energy’s Mt Pleasant mine through increased bushfire risk, drought, flooding and extreme heat, according to a statement from the Climate Media Centre.

The Mt Pleasant legal challenge, brought by a Hunter Valley community group, marks the first ever climate change case to reach Australia’s apex court, finding that planning authorities are legally required to consider the local climate impacts of a coal mine’s downstream emissions before granting approval.

The so-called Scope 3 emissions from exported coal were not considered sufficient cause by the IPC to stop it from approving the giant HVO mine extension – also in NSW’s Hunter Valley – just last week.

The Mt Pleasant thermal coal mine, previously owned by BHP, was seeking a similar sized extension to HVO’s. MACH sought to dig 406 million tonnes of coal over 22 years from December 2026 – doubling the current 10.5m tonnes annual rate – while HVO is planning to extract 429 million tonnes over 19 years from the end of this year.

The High Court verdict cited former Australian chief scientist, Penny Sackett’s estimate that the Mt Pleasant extensions would be “one of the 650 largest greenhouse gas emitting projects or collective human activities in the world over industries including energy, transport, agriculture, and urban development.”

Mt Pleasant’s coal output over the 22 years would cause the emissions of 876.07 million tonnes of greenhouse gases, with all but 17m tonnes of that scope 3 emissions resulting from its downstream combustion mostly in export markets, the High Court noted.

“If the [IPC] had concluded, based on the material before it or otherwise, that the local impacts of climate change to which the development would contribute would be of a materially different magnitude, nature, extent or immediacy from climate change’s impacts globally, the position might have been different,” the court said.

“It must be inferred, however, that the Commission did not so conclude.”

“The specific impacts which the [NSW] Court of Appeal concluded that the Commission had to consider involved a likely rise in average temperatures in the Hunter region so that bushfires may become more prevalent in that area and that rainfall has the potential to both increase and decrease, particularly seasonally, with heavier rainfall events likely to become more frequent,” the High Court said, in noting why the Court of Appeal had rejected the IPC’s approval.

In a statement, NSW resources minister Courtney Houssos said the state government would “carefully consider the full judgment”.

“We want to be very clear with workers and their families, Mt Pleasant has a separate approval to continue operating until 2032,” she said. “This decision does not change that.”

Houssos said the decision related to how the expansion had been assessed and approved in 2022, under the former Perrottet government. “It does not mean the expansion cannot be reconsidered or that coal mine extensions cannot be approved.”

“The recent approval of the Hunter Valley Operations project included detailed consideration of Scope 3 emissions and conditions to minimise them,” she said, adding MACH Energy had “indicated it will continue to pursue options for the project, and we will engage closely with the company as it does so”.

For its part, MACH Energy said in a statement that it acknowledged the judgment.

“While we are disappointed with the outcome, we accept the Court’s decision and will carefully review the judgment to understand its implications for future project assessments and environmental approvals,” the miner, part of giant Indonesia’s Salim Group, said.

“MACH Energy remains committed to operating responsibly within whatever legal framework the NSW Parliament and the courts establish,” it said.

The Climate Media Centre, though, hailed the decision as a “landmark judgment”.

“The ruling sets a binding national precedent across the NSW planning system, requiring decision-makers to properly consider the local consequences of climate change associated with a project’s emissions,” it said, in a statement.

“It directly affects 17 coal proposals currently in the NSW planning pipeline, and establishes a legal template that is expected to be applied in other states and in future climate litigation across Australia,” the centre said.  

Kate Owens, director of the Australian Centre for Climate and Environmental Law and an associate professor at Sydney Law School, said the High Court decision was both a “very meaningful result for climate litigation” and a “quite precise” ruling.

“One of the most important parts of the reasoning is that international carbon accounting does not determine the scope of domestic obligations,” Owens said in a LinkedIn post. “The fact that emissions from exported coal are counted in the country where the coal is burned under the Paris Agreement does not answer the question posed by NSW law.”

“The Court has not said that scope 3 conditions must ultimately be imposed,” she said. “The obligation is to consider the question properly, and the legislation leaves scope for the decision-maker to conclude that particular conditions are not practicable or appropriate.”

Federal environment minister Murray Watt said the Albanese government had not yet reviewed the judgment in full but said the ruling would not “necessarily impact on Commonwealth decisions”.

“To my knowledge, that’s the first time the High Court has made that kind of a finding,” Watt told News24.

“I would make the point that the decision from the High Court is in relation to a NSW government decision, based on NSW legislation. So it doesn’t automatically transfer to Commonwealth decisions or Commonwealth legislation.”

Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc (DAMS HEG), a grassroots community organisation from the Upper Hunter Valley, had brought the original case against MACH.

It was represented in the Court of Appeal and High Court by environmental law firm Johnson Legal, and had fought the case through three levels of court over four years.

“Today the High Court has said what we have always known: we cannot dig up coal, ship it overseas, watch it drive climate change, and then pretend the consequences have nothing to do with us and won’t be felt by us,” said Wendy Wales, President of DAMS HEG.

“The droughts, the bushfires, the floods – are directly connected to greenhouse gases, and massive fossil fuel projects like Mt Pleasant Optimisation simply ‘add fuel to the fire,'” Wales, a retired science teacher, said.

“We can’t ignore physics, chemistry and biology,” she added. “We must live within nature’s limits and this ruling endorses that.”

With the Mt Pleasant coal mine expansion’s approval remaining invalid, it will need to be referred back to the NSW Land and Environment Court or the IPC “to properly assess the project’s contribution to local impacts of climate change”, the Climate Media Centre said.

Tony Lonergan, treasurer of DAMS HEG and also a retired science teacher, said:

“Wendy and I have seven grandkids between us. We did this for them, and for all the kids across the Hunter who are going to grow up in a world shaped by the decisions being made right now.”

“This isn’t the end of coal overnight,” Lonergan said. “But it is the end of coal mine approvals that look the other way on climate. Every planning authority in Australia now has to take this seriously. That is a fundamental change.” 

Sue Higginson, an environmental lawyer and NSW Greens spokesperson for Climate Change and Planning, said Wales and Lonergan were “climate heroes” who had “lived and breathed big coal in the Hunter Valley for years and years”.

“HVO’s Environmental Impact Statement didn’t even account for scope 3 emissions at all, and the High Court has been crystal clear that consent authorities must ensure emissions are minimised to the greatest extent practicable,” Higginson said. “It seems clear that the approval of HVO fails this test.” 

“Lawyers should be running to the Courts right now with this judgement in hand, ready to stop coal approvals in their tracks,” she said. 

Nic Clyde, NSW coordinator for Lock the Gate Alliance, said the Minns Labor government in NSW had approved 14 coal projects since coming to office in March 2023, with HVO’s “enormous, decades-long expansion” just the latest.

“The [IPC approval of HVO] was outrageously out of step with what we need for a safe future,” Clyde said.

Anita O’Hart, Principal Lawyer for Johnson Legal, said the High Court’s ruling was historic and would bind the IPC to consider a project’s emissions “through to real, local climate harm”.

“The implications extend well beyond Mount Pleasant,” O’Hart said. “This ruling will be applied by courts and planning authorities across Australia, and it will be studied internationally as one of the most significant domestic climate law decisions in the world.”

Tessa Khan, executive director of Uplift, agreed: “Governments need to contend with the fact that there is no space in the atmosphere for emissions from more coal mining if we are going to have a livable climate.” 

“The ramifications of the High Court’s judgement will be far-reaching. Australian governments should heed the example set by the UK and pause fossil fuel project approvals while policies are brought into alignment with the law,” Khan said.

The Minerals Council of Australia, however, took a dimmer view, describing the High Court’s ruling as a “further blow” for the coal industry.

“Developing a coal mine in Australia is already difficult enough because of long approval times, lawfare by activists and high royalties and other taxes,” Tania Constable, the Council’s chief executive officer, said in a statement.

“The Mt Pleasant Optimisation Project was approved four years ago after a rigorous assessment process that spanned several years, representing around $2 billion in inbound investment in the Australian resources sector by investors in Indonesia and Japan, two vital trading partners for Australia,” Constable said.

“This decision sends a very negative signal to Australia’s trade and investment partners about sovereign risk in this market,” she said.

The federal coalition was also displeased, with leaders Angus Taylor and Matt Canavan calling the ruling “a direct threat to the Hunter, to thousands of future mining jobs and to Australia’s standing as a reliable energy exporter”. 

“The Albanese and Minns Labor governments must act immediately to fix the law,” the two leaders said in a joint statement.

“This is absurd. Under the international rules Labor champions, emissions are counted where coal is used, not where it is mined,” they said. 

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