Posted on November 10, 2019 by Elaine Yeo and Megan Hawley

Proposed Limits on Consideration of Greenhouse Gas Emissions in Mining Projects

On Thursday 24 October 2019, the NSW State Government introduced the Environmental Planning and Assessment Amendment (Territorial Limits) Bill 2019 which will amend the Environmental Planning and Assessment Act 1979 (‘EPA Act‘).

The bill, if passed, will insert a new provision into the EPA Act to prohibit consent authorities from imposing conditions of development consent for the purpose of achieving outcomes or objectives relating to impacts  outside of Australia as a result of the development or impacts occurring within NSW as a result of development outside of Australia.

There is also a proposed amendment to the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (”Mining SEPP’) to remove the mandatory requirement for consent authorities to consider downstream greenhouse gas emissions in determining a development application for development for the purposes of mining, petroleum production or extractive industry.

In the context of coalmines, downstream greenhouse gas emissions, or ‘scope 3’ emissions include emissions that are produced as a result of transporting and burning coal products from the mine, generally after the coal has been sold.

According to the second reading speech for the bill by Rob Stokes, Minister for Planning and Public Spaces, the bill is concerned with ‘technical and jurisdictional issues‘ relating to the enforcement of conditions that have extraterritorial impacts, which are matters of international trade and within the realm of the Commonwealth, not the state government.

Reaction to Recent decisions

The bill is in response to recent decisions by the Independent Planning Commission (‘IPC‘) and the Land and Environment Court relating to greenhouse gas emissions produced from overseas coal burning.

Of significance is the IPC’s decision in August 2019 to grant consent for the United Wambo Open Cut Coal Mine in the NSW Hunter Valley to United Collieries Pty Ltd (‘Applicant‘). The IPC imposed a condition of consent whereby the Applicant must prepare an Export Management Plan requiring the Applicant to use all reasonable and feasible measures to ensure that any coal extracted from the development is only exported to countries that are parties to the Paris Agreement within the United Nations Framework Convention on Climate Change, or are considered by the Planning Secretary of the Department of Planning, Industry and Environment as having similar policies as in the Paris Agreement.

In September 2019, the IPC also refused the Bylong Coal Project because of ‘all of the direct and indirect [greenhouse gas] emissions…that will adversely impact the NSW environment.’ In this case, one of the issues raised was the contribution of scope 3 emissions from burning the coal in South Korea.

These IPC decisions came months after Preston CJ’s Land and Environment Court decision in Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7. In that case, Preston CJ refused development consent for a coal mine in Rocky Hill. Although not the principle reason for refusal, the judgment made powerful statements about the impact of the development on climate change:

[699] ‘In short, an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time. Wrong place because an open cut coal mine in this scenic and cultural landscape, proximate to many people’s homes and farms, will cause significant planning, amenity, visual and social impacts. Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions. These dire consequences should be avoided. The Project should be refused.’ [emphasis added]

On the other hand, the Court upheld the Planning and Assessment Commissions’s (‘PAC‘) decision to approve a coal mine in Australian Coal Alliance Incorporated v Wyong Coal Pty Ltd [2019] NSWLEC 31. Moore J confirmed the PAC must have considered downstream emissions that will arise from the burning of the coal proposed to be produced from the mine under the Mining SEPP.

Impact of the amendments in the bill

As the Minister states in his second reading speech, the proposed amendment to the Act will prohibit the imposition of conditions that seek to address impacts outside of Australia, but this does not affect the ability of the consent authority to consider extra-territorial impacts (such as scope 3 emissions) in their assessment of a development and possibly to refuse consent on the basis of such impacts.

Whilst the mandatory requirement to consider such impacts would be removed in respect of mining projects by the proposed amendment to the Mining SEPP, this would not preclude consideration of such impacts to the extent the consent authority considered there to be such an impact as a result of the development. Given the evolution of the Court’s attitude to addressing climate change impacts as part of development assessment, it is likely that consideration will continue to be given to scope 3 emissions in development assessment, albeit that any such impacts will not be able to be regulated by way of conditions.

The bill has not been well-received by environmental groups. In particular, the Chief Executive Officer of the Environmental Defender’s Office, David Morris, has stated:

It doesn’t matter where Australian coal is burned, it’s Australian communities that are and will increasingly feel the brunt of a changing climate. The Government’s decision artificially carves out climate impacts from Australian coal on local communities – that is an absurd decision.

We will monitor the progress of the bill.

UPDATE: Voting on the bill has been deferred until after March 2020.

If you have any questions regarding this article please contact Megan Hawley on 02 8235 9703, or Elaine Yeo on 02 8235 9712.