NSW Court of Appeal clarifies IPC duties on Scope 3 GHG Emissions

On 24 July 2025, the NSW Court of Appeal (NSWCA) upheld Denman Aberdeen Muswellbrook Scone Healthy Environment Group (DAMSHEG) appeal, setting aside the NSW Land and Environment Court’s (NSWLEC) primary judgment, and declared that the primary judge had erred in its reasoning when it held that the Independent Planning Commission (IPC) had not failed to consider the likely impact of the project’s Scope 3 greenhouse gas (GHG) emissions on the locality, a mandatory consideration under section 4.15 of the Environment Planning and Assessment Act 1979 (NSW) (EP&A Act). A copy of the judgment is accessible here.

The appeal was brought by, DAMSHEG, a group of residents who live near the Mount Pleasant mine, who maintained their allegation that the IPC had failed to consider the likely impacts of the Scope 3 emissions of the project on the locality and sought to invalidate the IPC approval on 6 September 2022 of the MACH Energy Australia Pty Ltd (MACH) State Significant Development (SSD) consent application.

1. Background to the case and Primary Judgment

Robson J of the NSWLEC handed down the primary judgment on 19 August 2024 in Denman Aberdeen Muswellbrook Scone Healthy Environment Group Incorporated (INC2200560) v MACH Energy Australia Pty Ltd and Anor [2024] NSWLEC 86. Robson J dismissed DAMSHEG’s claim and upheld the IPC approval of MACH’s SSD consent application to expand their existing Mount Pleasant coal mine development consent for an additional 22 years. Robson J held that the IPC did consider and assess Scope 3 GHG emissions of the development and that no negative inference could be drawn from the IPC’s lack of specific reference to Scope 3 emissions in its statement of reasons or lack of conditions imposed on the project to minimise Scope 3 emissions.

The mine expansion is estimated to allow the extraction of 21 million tonnes (Mt) of coal per year up to 2048, totalling 444 Mt of coal burned over the course of the project adding 870 Mt of CO2 into the atmosphere, which would make Mount Pleasant coal mine the largest open-cut coal mine in New South Wales. An estimated 98% of the project’s emissions would be Scope 3 GHG emissions, however these emissions were assumed to be emitted outside Australia generated from burning coal at locations convenient to purchasers.

2. Issues considered by NSWCA

The NSWCA had to determine whether the NSWLEC Judge made an error in concluding that the IPC did not fail to consider the following mandatory considerations:

3. NSWCA Reasoning

Imposition of conditions to minimise Scope 3 GHG emissions

1. The NSWCA agreed with the NSWLEC Judge’s reasoning that the IPC did not fail to consider Scope 3 emissions by not imposing conditions to minimise them. The fact that the IPC had considered that emissions were already ‘accounted for’ under international regimes (such as the Paris Agreement) was a sufficient indication that it saw no need to impose any additional conditions on the development consent to minimise Scope 3 emissions. Therefore, it could not be inferred that the IPC failed to consider whether such conditions ought to be imposed.
2. All that is required of clause 2.20 of the Resources SEPP is that the IPC consider whether to impose conditions on Scope 3 emissions, and if so, what conditions should be imposed – it is not for the court to determine how much weight the IPC should place on this consideration.

Likely environmental impacts

1. The NSWCA disagreed with the NSWLEC Judge’s reasoning and found that the IPC failed to consider the ‘likely impacts of the project, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality’ a mandatory obligation on the consent authority under section 4.15(1)(b) of the EP&A Act.
2. Generally, a lack of reference to the likely impacts on the locality does not automatically mean the IPC did not consider the matter. However, the lack of reference to the impacts on the locality combined with a reference to the ‘global’ impact of the project was a strong indicator that the IPC did not consider the causal connection between the project and the environmental impacts of climate change on the locality itself.
3. To discharge this obligation, the IPC should have considered the likely environmental impact of the development on the locality (specifically that the locality was particularly susceptible to the effects of global warming) and the views of the local community to assist its decision on whether to grant or refuse the development consent, and to explain in its statement of reasons how the community’s views and the likely impact on the locality had been taken into account.
4. The IPC could not discharge the obligation to consider the impact of climate change on the locality with general references to the ‘uncontroversial’ effects of global warming on the planet generally. The IPC must make specific references of the effects of climate change on the locality as distinct from the effects globally, including any disproportionate impact the project may have on the locality compared to the global planet generally.

The NSWCA remitted the matter back to the NSWLEC to determine whether orders could or should be made under section 25B or 25C or the Land and Environment Court Act 1979 (NSW), which if complied with by the IPC could validate the development consent. However, if such orders cannot be made, then the NSWLEC must declare that the IPC’s 6 September 2022 development consent over MACH’s Mount Pleasant mine is invalid for failure to consider a mandatory consideration under section 4.15(1)(b) of the EP&A Act.

4. Impacts of decision

This decision will impact development consent applications for SSD’s and will require the IPC to directly consider the environmental impacts of the project on the locality to discharge its obligation to consider the mandatory matter under section 4.15(1)(b) of the EP&A Act. This requires the IPC to consider the causal connection between the proposed SSD and the specific environmental impacts on the locality, merely noting that the impacts of climate change will be felt is not enough.

Further, the IPC in discharging its duty must take into account the views of the local community and must list in their statement of reasons how it considered both the likely impacts on the locality and the local community’s views prior to reaching its decision to approve a development consent application. This decision will be especially impactful to SSD’s which are likely to contribute a large amount of Scope 3 GHG emissions, such as coal or gas projects, and may require the applicant to list any specific impacts of its project on the locality in its Environmental Impact Statement (EIS) (such as whether the locality is particularly sensitive to climate change), as general references to global warming in the IPC’s statement of reasons is considered by the NSWCA to be insufficient.

Proponents of SSDs should ensure their EIS clearly outlines local impacts and addresses community views. General references to climate change impacts are no longer sufficient.

Reach out to our Project Approvals team if you require guidance on meeting these requirements.

With thanks to Jeniece Taylor, Paralegal for assisting with the article.