The fine print behind the Mount Pleasant headlines 8 min read
The High Court has dismissed MACH Energy's appeal against the invalidation of a development consent extending the life of the Mount Pleasant coal mine in New South Wales, a decision that has attracted significant media attention.
The case is MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35. Despite some of the more alarmist media coverage, the decision turns on a narrow statutory construction issue specific to a particular New South Wales approval regime, and does not herald sweeping new obligations for resources operators generally. In this Insight, we examine what the Court actually decided on scope 3 emissions and localised climate impacts, and what it means in practice for resources industry operators in NSW and beyond.
Who in your organisation needs to know about this?
General counsel and in-house legal teams at mining, petroleum and resource industry operators; environment and planning teams responsible for the preparation of environmental impact assessments and approvals applications; sustainability and ESG teams managing greenhouse gas (GHG) abatement and decarbonisation planning; and directors and executives considering climate-related litigation risk.
Key takeaways
- Notwithstanding the headlines, the findings of the High Court about scope 3 emissions are an orthodox application of settled legal principles to the NSW environmental approvals regime. The fact that the Independent Planning Commission of New South Wales (IPC) was required to consider the imposition of conditions relating to scope 3 emissions was never in issue – what was in issue, and what was decided, was whether the Court could infer that the IPC had actually undertaken that consideration. The NSW Court of Appeal found that the IPC had done so. A majority of the High Court found that it had not.
- The decision is confined to the specific wording of the Environmental Planning and Assessment Act 1979 (NSW) (EPA Act) and the State Environmental Planning Policy (Resources and Energy) 2021 (NSW) (Resources SEPP) and does not establish a general requirement for planning authorities in other regimes or jurisdictions to consider conditions on scope 3 emissions.
- The decision confirms that where a decision-maker is under an express statutory obligation to do so, as is the case under the NSW environmental approval regime, it must actively consider whether to impose conditions directed at minimising all GHG emissions – including scope 3 (downstream and upstream) emissions – to the greatest extent practicable. Importantly, in NSW this is only an obligation to consider imposing such conditions, not an obligation to actually impose them, or to be satisfied that scope 3 emissions have in fact been minimised.
- The Court unanimously held that climate impacts can be assessed at a general level under the NSW environmental approval regime, rather than requiring a geographically confined inquiry into impacts in the project's locality (overturning the NSW Court of Appeal's findings and generally returning to the status quo on this issue).
MACH Energy v DAMSHEG explained
What the Court actually decided on scope 3 emissions
Clause 2.20(1)(c) of Resources SEPP, read with section 4.15(1)(a)(i) of the EPA Act, required the IPC to consider whether conditions should be imposed on a development consent to ensure that GHG emissions – including scope 1, 2 and 3 emissions – are minimised to the greatest extent practicable. A majority of the Court (Chief Justice Gageler and Justice Jagot dissenting) found that the IPC had not specifically considered whether conditions should be imposed in respect of scope 3 emissions, and the consent was therefore invalid.
The divergence in opinion between the majority and the minority in dissent turned on the inferences that could be drawn from the IPC's consideration of national and international climate frameworks relevant to the regulation of scope 3 emissions. The minority (and the NSW Court of Appeal below) considered it could be inferred that the IPC had considered and rejected the imposition of conditions directed to scope 3 emissions, on the basis of these climate frameworks. A majority of the High Court determined that consideration of these frameworks was insufficient to demonstrate that the IPC had considered the imposition of conditions directed to scope 3 emissions. The Court did not say that such frameworks are irrelevant to the decision-making process – rather, they are not sufficient to satisfy the specific obligation in the Resources SEPP to consider conditions to reduce GHG emissions.
Importantly, the Court was careful to confirm that this is only an obligation to consider imposing such conditions. It does not – contrary to some reporting – require the IPC to actually impose conditions limiting scope 3 emissions, or to be satisfied that scope 3 emissions have in fact been reduced to the greatest extent . The Court expressly acknowledged that the actual conditions to be imposed, or not imposed, remain a matter for the decision-maker, and that it is open to a decision-maker to decide against imposing scope 3 conditions – including, as Justice Gordon noted, on the basis that the relevant emissions are outside the operator's direct control. Justice Gordon illustrated this by reference to the decision in Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd (2021) 252 LGERA 221, where the IPC approved a coal seam gas development but declined to impose scope 3 conditions on the basis that those emissions were outside the operator's direct control and could not reasonably be conditioned – a legitimate exercise of the discretion, in contrast to the absence of any evident consideration in this case. The Court also left open whether a condition could validly be imposed to limit total output of the mine or to restrict sale to particular customers, which was not argued by the parties.
Climate impacts can be assessed generally, not locality by locality
The Court unanimously overturned the NSW Court of Appeal's finding that the IPC was required to consider climate impacts specifically in the locality of the project, as distinct from climate impacts generally. The Court of Appeal had read the words 'in the locality' in section 4.15(1)(b) of the EPA Act as requiring the IPC to treat local impacts as the focal point of its assessment; the High Court held this was an error, with Chief Justice Gageler and Justice Jagot confirming that the required focus is the development itself and its likely impacts, and that the level of specificity at which a likely impact is considered is ordinarily a matter for the decision-maker to determine. Each member of the Court reached a similar conclusion: the assessment is not a geographically confined inquiry, and climate impacts – given their inherently global character – may properly be considered at a general level, even though localised impacts may also be relevant and their identification remains a matter for the IPC. This is, practically, the only workable reading: treating climate impacts as requiring assessment project area by project area would be an enormous and arguably unworkable task, given the diffuse and cumulative nature of GHG emissions.
It is worth noting that MACH Energy was, in fact, unanimously successful on this ground of appeal, which reverses a significant (and disruptive) finding of the NSW Court of Appeal as to the operation of section 4.15(1)(b) of the EPA Act. Its appeal was nonetheless dismissed because DAMSHEG's notice of contention – based on the issue of the IPC's consideration of conditions for scope 3 emissions – was upheld.
Practical implications for resources operators in NSW and beyond
Clause 2.20(1) of the Resources SEPP applies to all development for the purposes of mining, petroleum production or extractive industry in NSW – so the decision is of general relevance to resources operators in NSW. That said, the effect of the decision is largely to confirm the approach typically taken by industry and the IPC to consideration of conditions for scope 3 emissions. For operators with projects currently before the IPC, the clearest lesson is one of process and documentation: consent authorities need to demonstrate a genuine, active engagement with scope 3 conditions, rather than treating broader national or international climate frameworks as a substitute for that consideration. To do that, they need to be armed with information in the environmental assessment process which demonstrates that the operator has considered conditions across all emissions. Operators should also expect that, as GHG abatement and decarbonisation plans evolve, consent authorities and regulators may increasingly expect scope 3 emissions to be addressed at the planning stage.
A narrow decision, not a seismic shift
Notwithstanding the media coverage and commentary from various groups, this is best understood as a narrow decision turning on the application of a specific provision of the NSW consent regime to a specific decision of the IPC, not a judgment with immediate consequences for the resources sector generally. The Court itself emphasised that the case turned on its own facts – the particular statutory language requiring specific consideration, and the inferences properly drawn from the IPC's detailed reasoning – and acknowledged that in other matters under the same regime, a decision-maker that has genuinely considered scope 3 conditions and chosen not to impose them has acted entirely legitimately.
Unresolved issues to watch
A number of issues remain open following the decision. Justice Adamson's remarks in the Court of Appeal – quoted several times during the proceedings – raised the possibility of various conditions that might be imposed with regard to scope 3 emissions, in each case directed at actions within the operator's control (including offsetting). Separately, the Court expressly left open whether a condition could be imposed to limit total output and sale to particular customers, which was not argued in this case. The Court also declined to resolve whether climate impacts are, in principle, capable of being the subject of a localised impact assessment at all. Each judge treated this as unnecessary to decide.
Actions you can take now
- Resources operators with matters before the NSW IPC should review how scope 3 emissions are addressed and documented at the consideration stage and seek advice on specific projects or approvals.
- Future applicants will need to give the IPC sufficient information to adequately consider whether conditions should be imposed to limit scope 3 emissions to the greatest extent . If an applicant considers that scope 3 conditions would be unworkable or uncommercial, the applicant should provide the IPC with sufficient information to justify this position.
- Operators with projects in other jurisdictions should seek advice on analogies that may seek to be drawn in the context of those regimes.