A green victory in the hunter

The New South Wales Court of Appeal decision in Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd (NSWCA, 2025) is frequently described as a climate change case. In substance, however, it is a case about statutory obligation and evaluative discipline in planning law.

The Court did not determine whether coal mining should proceed, whether climate change warrants refusal of development, or whether Scope 3 emissions must always be decisive. Instead, it addressed a narrower but legally significant question: what a consent authority is required to do when legislation mandates consideration of the likely impacts of a development in the locality.

background

In September 2022, the Independent Planning Commission of New South Wales (IPC) granted conditional development consent for the Mount Pleasant Optimisation Project, a State Significant Development approval permitting MACH Energy Australia Pty Ltd to extend the life and increase the output of the Mount Pleasant coal mine near Muswellbrook in the Hunter Valley.

The approval followed assessment by the Department of Planning and Environment and a public hearing process. The project approval contemplated production of up to 21 million tonnes of run-of-mine coal per year and extended operations to 2048.

The IPC acknowledged that the project would generate greenhouse-gas emissions, including emissions arising from the combustion of exported coal, and that such emissions contribute to global climate change.

The Legal Challenge

The challenge was brought by Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc (DAMSHEG), a community organisation representing residents of the Upper Hunter region.

The proceedings were brought as judicial review, not a merits appeal.

DAMSHEG did not argue that the project must be refused because of climate change, nor that coal mining is unlawful. Instead, the group focused on the statutory obligations imposed by section 4.15(1)(b) of the Environmental Planning and Assessment Act 1979 (NSW), which requires a consent authority to consider:

“the likely impacts of the development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality.”

The case was framed on the basis that this obligation is mandatory and requires a genuine evaluative exercise.

Proceedings in the Land and Environment Court

Following the IPC’s approval, DAMSHEG sought judicial review in the NSW Land and Environment Court. In August 2024, the primary judge dismissed the challenge, finding that the IPC had considered greenhouse-gas emissions and had not failed to take a mandatory consideration into account.

The primary judgment accepted that the IPC had acknowledged the contribution of emissions to climate change and that this acknowledgment was sufficient to satisfy the statutory requirement.

DAMSHEG appealed.

The Court of Appeal Decision

On 24 July 2025, the New South Wales Court of Appeal allowed the appeal and set aside the 2022 development consent.

The Court held that the IPC had failed to properly discharge its mandatory duty under section 4.15(1)(b). The defect identified was not the absence of climate change discussion, but the absence of a distinct evaluative assessment of how the project’s emissions were likely to result in environmental impacts in the locality.

The Court emphasised that section 4.15 requires more than acknowledgment of an issue. It requires the consent authority to engage with the statutory task directed by the text of the provision.

Although the IPC’s materials addressed climate change at regional, national, and global levels, the Court found that they did not address how the emissions attributable to the project were likely to manifest as impacts on the local natural or built environment.

What the Court Did – and Did Not – Decide

The Court of Appeal did not hold that Scope 3 emissions must always be treated as a stand-alone impact, nor that they necessarily require refusal of a development. It did not mandate particular modelling techniques or prescribe specific metrics.

What the Court did decide was that, where emissions are identified and relied upon as part of the assessment material, the consent authority must explain how those emissions are relevant to the statutory inquiry it is required to undertake.

In effect, the Court drew a distinction between recognising the existence of emissions and evaluating their likely impacts in the locality, as the statute requires.

Immediate legal effect

• The 2022 development consent for the Mount Pleasant Optimisation Project was set aside by the NSW Court of Appeal.

• As a result, the optimisation and expansion authorised by that consent cannot lawfully proceed.

• Any reliance on that approval to extend mine life, increase extraction rates, or implement optimisation works is invalid unless and until a fresh or corrected consent is granted.

  
  

What did not happen

• The Court did not order the mine to close.

• Existing mining operations that are authorised under earlier, still-valid consents were not disturbed by the judgment.

• The decision did not determine the merits of mining at Mount Pleasant, only the legality of the particular approval pathway.

  
  

Practical operational position

• The mine may continue operating within the limits of its pre-existing approvals.

• The proposed optimisation – including increased production and extended mine life – is on hold pending:

  • reconsideration by the consent authority, or

  • a fresh approval process that properly discharges the statutory duty identified by the Court.

    
    

What happens next

The matter was remitted for further steps to determine whether the defect can be cured through further assessment or conditions, or whether a new approval process is required.

A High Court special leave application has been filed, but until and unless that alters the position, the expansion remains legally unavailable.

Outcome and Remittal

The Court made a declaration setting aside the development consent. The matter was remitted for further proceedings to determine whether the identified defect could be addressed through further assessment or conditions, or whether a fresh approval process would be required.

Until a valid consent is issued following that process, the project cannot lawfully proceed on the basis of the 2022 approval.

An application for special leave to appeal to the High Court was filed in August 2025 and remains pending.

Professional Significance

The Mount Pleasant decision is significant for what it says about statutory reasoning, rather than climate policy. For consent authorities, the case confirms that mandatory considerations under section 4.15 are not satisfied by high-level or abstract discussion. Where impacts are required to be considered in the locality, the assessment must address how the development is likely to affect that locality.

For proponents, the decision highlights the need for environmental assessment material to support a structured evaluative process, particularly where impacts are indirect or cumulative.

For practitioners, the case reinforces a recurring principle of administrative law: a statutory obligation to consider is an obligation to evaluate, not merely to acknowledge.

Conclusion

The Mount Pleasant Court of Appeal decision is best understood as a case about the limits of statutory compliance in environmental assessment. It does not expand the scope of planning law, nor does it compel particular outcomes. Instead, it insists that when Parliament has prescribed an evaluative task, that task must be carried out with fidelity to the statutory language.

In that sense, the decision is less about climate change and more about how administrative power is exercised when the law requires decision-makers to explain how a development affects a place.