Can the EPBC Act reforms deliver the promised wins for both the environment and business?
Once in a generation reforms to the Environment Protection and Biodiversity Conservation Act 1999 (Cth)(EPBC Act) were passed by Federal Parliament in November 2025, fundamentally changing environmental approvals risk and compliance in Australia. Implementation is being staged through to 2028, although the most significant ramifications from these reforms will be felt by 1 December 2026, with the Minister for the Environment and Water, Murray Watt promising the updated regime will be ‘better for the environment, and better for business’. These reforms come more than five years after Professor Graeme Samuel AC completed the second independent review of the EPBC Act finding the legislation remained ‘ineffective’ and was ‘not delivering for the environment, for business or for the community’.
In this article we outline key aspects of the reforms and analyse whether they will deliver the promised ‘win win’ outcome.
About the reform package
There are seven pieces of legislation included in the reform package, including:
- the primary Environment Protection Reform Act 2025 (Cth) (Reform Act);
- the National Environmental Protection Agency Act 2025 (Cth), establishing a new National Environment Protection Agency (NEPA) as independent regulator to both enforce compliance and assess approvals under delegated powers;
- the Environment Information Australia Act 2025 (Cth), an Act that establishes Environment Information Australia (EIA); and
- four smaller Acts that address customs, excise and restoration charges.
National Environmental Standards
At the centre of the reforms are National Environmental Standards (Standards) that will introduce measurable criteria for decision making in relation to matters of national environmental significance (MNES), environmental offsets (restoration actions and contributions), regional planning, data and information, community consultation and First Nations engagement.
The Reform Act provisions establishing the framework for the Standards commenced on 2 December 2025, and the Department of Climate Change, Energy, the Environment and Water (DCCEEW) released the first two draft Standards (relating to MNES and Environmental Offsets) for public consultation with more than 750 submissions received. Following that feedback, a revised draft MNES Standard was released on 30 April 2026 and a revised draft Offsets Standard released on 8 May 2026 for public consultation with submissions due by 29 May 2026 and 9 June respectively.
Draft Standards around Community Engagement, First Nations Engagement and Data and Information are set to be released for consultation in the coming weeks.
Streamlined assessment and approvals
By 1 December 2026, two heavily utilised existing assessment pathways, being assessment on referral documentation, and public environment report, will be replaced with a streamlined assessment pathway which requires assessment decision-making within 30 business days.
Practically, a proponent will need to prepare a robust referral which frontloads environmental studies and community engagement to utilise this streamlined assessment pathway. The streamlined assessment pathway will not be available for actions involving the production or extraction of gas or coal, defined in the EPBC Act as ‘fossil fuel actions’ (which will continue to be assessed under the existing pathways).
The Minister will retain responsibility for the final approval decision, however this may be delegated to NEPA. Approvals generally cannot be granted for proposals inconsistent with the Standards, though the Minister will have the discretion to approve a deviation considered to be in the ‘national interest’, e.g. for affordable housing and renewable energy projects, but no deviation is permitted for ‘fossil fuel actions’.
No ‘unacceptable impacts’
Fundamentally, the Minister cannot approve a project that will have an unacceptable impact on a MNES.
The concept of an unacceptable impact varies for each MNES, e.g. seriously impairing the viability of a listed threatened species may be considered unacceptable. ‘Seriously impair’ means the impact will, when compared to the action not being taken, result in an impairment or alteration that is of a severe nature or context. The Standards will be critical in understanding what this restriction is likely to prohibits moving forward.
Offsets
Proponents must demonstrate they have first avoided, mitigated or repaired impacts before the Minister will consider allowing offsets for a project and if the action will have or is likely to have a residual significant impact, i.e. the approval must pass the ‘net gain’ test under the reforms.
Helpfully, offsets will be able to be delivered through either traditional land based offsets or payment into a new restorations contributions fund. Those funds are intended to be used to develop strategic broadscale offset projects, recognising that fragmented offsets may not improve species’ biodiversity values.
It is not clear what form of legal security will be acceptable for the permanency required for land based offsets though it remains unlikely voluntary declarations under the Vegetation Management Act 1999 (Qld), will be acceptable under the final Offsets Standard.
The Nature Repair Act 2023 (Cth) has also been amended to allow biodiversity certificates registered by the Clean Energy Regulator (CER) to be used to discharge offsets obligations under EPBC Act approvals. Appropriate methods will need to be developed that comply with the Offsets Standard and it is uncertain how approval of a suitable certificate will operate, noting it is the CER who issues the certificates and not DCCEEW.
Reduced ‘grandfathering’
Provisions narrowing the ‘continuing use’ exemption for land clearing activities commenced on 2 December 2025, meaning landowners can no longer claim the exemption to clear vegetation that has not been cleared for 15 years (other than for a forestry operation or on land within 50m of a watercourse, wetland or drainage line in the Great Barrier Reef catchment area).
Whilst the Act do not currently propose entirely repealing the ‘continuing use’ or ‘specific environmental authorisation’ exemptions, the already tenuous reliance on these exemptions will decrease further and receive further regulatory scrutiny by NEPA. This may represent a material risk to continuing operations for many older fossil fuel projects historically dependent on the ‘grandfathering’ provisions.
Increased penalties and enforcement powers and compliance focus
Significantly increased penalties will apply by no later than 1 December 2026 particularly for corporations, as well as new civil penalties to ensure a corporation does not benefit from environmental breaches attracting penalties as high as 10% of annual turnover (capped at $825 million). These changes will generally only apply to contraventions occurring after 1 December 2026.
New environment protection orders will also be available in relation to an actual or alleged contravention that is posing a risk to the environment, and can lead to a stop work order or a requirement to take rehabilitation action being imposed. NEPA will also be able to utilise compliance audits to monitor compliance with approvals.
Other key reforms
Other noteworthy aspects of the reform package include:
- the NEPA and EIA commencing operations on 1 July 2026, resulting in delegation of compliance and enforcement to NEPA and information collation to EIA;
- minor preparatory works for referred actions being able to proceed with the Minister’s written agreement while assessment remains in progress;
- bilateral agreements will be updated to reduce duplication, primarily by broadening the State assessment processes currently recognised, i.e. assessments under the Planning Act 2016 (Qld) are not recognised under the existing Queensland bilateral agreement. Critically, any accredited assessment will need to demonstrate consistency with the Standards;
- a decision that a referred action is ‘not a controlled action’ will lapse after 5 years if the action is not substantially commenced within that time;
- greenhouse gas emissions reporting from 1 December 2026; and
- creating two types of bioregional planning instruments to deliver landscape planning. ‘Bioregional Guidance Plans’ are non-binding and will provide information to decision-makers, while ‘Bioregional Plans’ are binding and will designate certain areas as ‘development zones’ or ‘conservation zones’. No approval will be required to take an action in development zones, provided the Bioregional Plan is complied with and the action is registered with the Minister. Comparatively, actions within conservation zones will generally be prohibited, aside from certain exemptions (which do not apply to ‘fossil fuel actions’).
Senate Inquiry Report
While still in Bill form, in October 2025 the reform legislation was referred to the Senate and Communications Legislation Committee for inquiry and report, with submissions invited until 5 December 2025. Although the reforms were passed in November 2025, the Committee inquiry continued and the report issued on 31 March 2026. Report recommendations included that the full suite of Standards be urgently progressed, clearer guidance be given on offsets maintenance periods, the principles and processes to apply for calculating offsets contributions (including the calculator) be published as soon as possible, and that guidance be published on use of the national interest pathway.
Will the Reforms be better for business and the environment?
Although stakeholders disagree as to whether the reforms deliver a perfect solution, our analysis reveals the changes could benefit the businesses and projects that are able to adapt early (despite limited applicability for coal and gas projects). Investment and project delivery will, however, be undermined if the Standards are poorly defined and reform implementation is overly complicated. Early adaptation has been and will continue to be hindered while critical detail is deferred to subsidiary documents, the majority of which remain to be published. On 8 May 2026, three policy papers were released regarding: the transition to the NEPA, more certainty for projects and environment protection, and reducing duplication. Notably, it is proposed that the new ‘unacceptable impact’ definition commences on 1 July 2026 together with the new arrangements for bilateral agreements. Consultation on the three papers is short, closing on 21 May 2026.
Coal and gas activities can not benefit from various streamlining pathways creating inequality of outcomes. The increasingly tenuous ability to continue to rely on ‘grandfathering’ exemptions also suggests older projects of any type may be disproportionately disadvantaged compared to projects that have only commenced this century. Certainly the reforms will reduce the metaphorical space available for operators and investors with appetite for bullish timeframes and for testing legislative and administrative limits.
From an environmental perspective, there should be improvement as a result of the reforms, but only if the Standards appropriately limit the opportunity for discretion, the rules are applied consistently during the decision-making process and obligations are firmly administered and enforced.
Ultimately, one of the key objects of the EPBC Act is to promote ecologically sustainable development through the conservation and ecologically sustainable use of natural resources. Only time will tell whether the reforms achieve this objective and prove to be better for business, the community and the environment.
Perhaps the results of the recently announced Queensland Productivity Commission’s inquiry into the impacts of the EPBC Act reforms on Queensland which is due to be completed in April 2027, will provide insight into the prospects of the ‘win win’ promise succeeding.