Court decision

Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208

The Federal Court has dismissed two judicial review proceedings challenging a decision of the Federal Environment Minister to issue approvals in favour of the expansion of two coal mines in New South Wales under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (the EPBC Act).

This case represents the first challenge to a controlled action decision under the EPBC Act on the grounds of climate change.

The applications for judicial review 

Narrabri Coal Operations Pty Ltd and Mach Energy Australia Pty Ltd are proponents in respect of two separate applications for the expansion of existing coal mines at Mount Pleasant (the Mount Pleasant Project) and Narrabri (the Narrabri Project).

The expansions were initially approved as controlled actions in September 2019 (in respect of the Mount Pleasant Project) and in August 2020 (in respect of the Narrabri Project). The applicant requested reconsideration of the controlled action decisions in July 2022 on the basis of substantial new information about the impacts that the expansion projects will have, or are likely to have, on matters protected by Part 3 of the EPBC Act. Substantial new information about the impacts of the actions on matters relating to climate change was submitted by the applicant.

The Minister for the Environment and Water (Minister) determined that the reconsideration requests were valid, but in May 2023 decided not to revoke the original decision because she was satisfied that:

1. the proposed actions would not cause any net increase in greenhouse gas emissions; and
2. even if the actions would result in increased emissions, the likely increase would be very small.

The Minister identified a number of factors relevant to these conclusions, including the possibilities that:

1. generated omissions would be offset by the implementation of policies in countries where the coal would be consumed, and that those countries will each have nationally determined contributions under the Paris Agreement to reduce emissions;
2. if the proposed actions do not proceed, there will not necessarily be an effect on the total level of greenhouse gas emissions; and
3. if the proposed actions do not proceed, then the market will respond by increasing supply from alternative sources, and the prospective buyers will likely purchase an equivalent amount of coal from another supplier.

Accordingly, the Minister could not conclude that the proposed actions will be a substantial cause of adverse impacts on Matters of National Environmental Significance (MNES).

The Applicant commenced judicial review applications in the Federal Court, seeking reconsideration, revocation and substitution of the Minister’s decisions based on the availability of new information about the impacts of each proposed action on matters protected by the Act.¹

The Minister’s decisions

In making her decisions, the Minister was required to decide whether the proposed actions are a controlled action and which provisions of Part 3 of the EPBC Act (if any) are controlling provisions for those actions.² 

In doing so, the Minister must have considered all adverse impacts that the actions have, will have, or are likely to have.³

The Minister’s decisions confirmed that the proposed actions were controlled actions and that ss 18 and 18A (listed threatened species and communities) and ss 24D and 24E (a water resource, in relation to coal seam gas development and large coal mining development) were controlling provisions.⁴ 

In the decision, Justice McElwaine considered whether the Minister was legally justified in deciding to confirm the controlled action decisions,⁵ and found that it was not Parliament’s intention to prescribe how the Minister is to undertake their assessment, and what matters may or may not be considered.⁶

On the Court’s reading of the EPBC Act, the Minister’s task required an assessment of the impacts the action has or will have or is likely to have. Where the impact is indirect, the definition of “impact” in the EPBC Act requires it to be a substantial cause. In undertaking the assessment of the impacts, Parliament has not authorised the Minister to engage in a “process of indeterminate reasoning or speculation by reference to possibilities”.⁷ The Minister may undertake a “broad evaluative assessment” but is limited by the definition of “impact” under the Act.⁸ 

Ultimately, Justice McElwaine concluded that it was open to the Minister to determine that any increase in global greenhouse gas emissions would be not be a “substantial” cause of adverse impacts.⁹ This is despite the Minister acknowledging the connection between greenhouse gas emissions and climate change, and agreeing that “climate change has, or will, impact” MNES.¹⁰ The Minister also accepted that all but one of the MNES under Part 3 of the EPBC Act have been, or will be “affected by climate change and its effects”.¹¹  

The judgment commented that it would be a matter for Parliament to consider whether the exercise of the Minister’s powers should explicitly consider the effects of climate change.¹²

Both applications were dismissed by Justice McElwaine who found that the Minister had not acted outside of her obligations in making her decision. 

Conclusion

The applicant has indicated that it is considering its options in the wake of the decision by the Federal Court.

Various commentators have speculated that this decision means that future assessments of coal projects under the EPBC Act will not need to take into account the risks of climate change without legislative amendment.

Following the second review of the EPBC Act, the government made a commitment to reform Australia’s environmental laws. Consultation on the details of the draft legislation is occurring, and it is anticipated that the government will release draft legislation for public comment later this year.

For more information, please get in touch with our Resources and Energy team. 

1. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [2]; EPBC Act s 78A and Part 3A.
2. EPBC Act, s75(1)(a) and (b).
3. EPBC Act, s 75(2)(a) and (b). 
4. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [1].
5. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [4].
6. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [74].
7. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [57].
8. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [57] and [153]; EPBC Act, s 257E. 
9. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [155].
10. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [2] and [4].
11. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [2] – [3].
12. Environment Council of Central Queensland Inc v Minister for the Environment and Water (No 2) [2023] FCA 1208, [7].