Climate in the Consent: What MACH Energy and the latest reforms mean for developers

4 November 2026
Crisp Law
Newsletter

By Derek Ding

Does a NSW consent authority now have to weigh what a project’s emissions will do to the community next door?

In this edition, we look at the High Court’s first climate change judgment, MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35, delivered on 7 October 2026.

Much of the coverage reports that planning authorities must now consider the local climate impacts of a project. The High Court rejected that reading, where consent still fell but on a narrower ground; the Independent Planning Commission (IPC) never considered conditions on scope 3 emissions.

In addition, we will set this decision beside the Full Federal Court’s 2022 judgment in Minister for the Environment v Sharma, which refused to impose a duty of care on the federal Environment Minister towards Australian children. Read together, the two cases demonstrate where climate arguments succeed and fail in Australia today.

This will then make up part 1 of the newsletter, with part 2 turning to the statutory changes in NSW, the ACT and the Commonwealth that tighten environmental regulation. For developers and contractors, the practical risk sits in the assessment record.

Australia’s first High Court judgment to consider climate change

Facts:

MACH owns the Mount Pleasant open cut coal mine in the Hunter Valley.
In 2022, the Independent Planning Commission (IPC) approved MACH’s application to:
- extend the mine’s life by 22 years, and
- significantly expand its output.
Scope 3 emissions, released when the coal is burned (largely overseas), made up 98% of the project’s total greenhouse gas emissions.

The IPC imposed conditions on scope 1 and 2 emissions but not in respect of scope 3.

Then:

The Denman Aberdeen Muswellbrook Scone Healthy Environment Group (DAMSHEG) sought judicial review of the IPC decision.
The Land and Environment Court of NSW dismissed this.
The NSW Court of Appeal set the IPC approval aside after holding the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) required a causal inquiry into the climate impacts of the development in its locality ( i.e the IPC had to consider how the project’s emissions would affect the local area).
Then the High Court the matter was appealed to the High Court on 2 grounds.

Ground 1: No ‘local climate impacts’ test

The EPA Act requires a consent authority to take into consideration “the likely impacts of that development, including environmental impacts on both the natural and built environments, and social and economic impacts in the locality.”

The High Court held that:

The EPA Act did not limit consideration to local environmental impacts (ie local, national or global).
Declined to decide whether climate change can be an environmental impact in the locality of a development.

As a result, on this ground MACH succeeded unanimously. The High Court therefore rejected the ‘local climate impacts’ test that much of the coverage says it adopted.

Ground 2: the scope 3 conditions were never considered

The consent nonetheless fell because the IPC failed to meet to meet the State Environmental Planning Policy (Resources and Energy) 2021 (Resources SEPP) requirement that the consent authority must “consider whether or not the consent should be issued subject to conditions aimed at ensuring… that greenhouse gas emissions are minimised to the greatest extent practicable”.

The High Court:

held that the IPC failed to consider conditions directed to scope 3 emissions (i.e. the IPC, by treating scope 3 emissions as a matter for the countries importing the coal failed to discharge the requirement to consider conditions.)

The obligation is to consider such conditions through “an active intellectual process,” not to impose them. The appeal was dismissed with costs, leaving Court of Appeal’s orders in place.

The matter therefore returns to the Land and Environment Court, which must consider making orders under the Land and Environment Court Act 1979 (NSW) before declaring the consent invalid. Those orders can suspend the consent and specify terms that, once complied with, will validate it, with or without alterations.

For MACH, the practical question is whether the consent can be validated once scope 3 conditions are properly considered.

Sharma, the duty of care that did not survive appeal

Facts:

In 2016, Whitehaven Coal sought approval under the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) to extend its Vickery coal mine in northern NSW.
8 Australian children, led by Anjali Sharma, sued on their behalf and on behalf of all children in Australia. Their litigation representative was Sister Marie Brigid Arthur.
The plaintiffs sued the federal Environment Minister, alleging that the Minister owed them a duty of care in negligence when deciding whether to approve the extension.

At first instance:

At first instance in Sharma v Minister for the Environment (2021) the Court held that under the EPBC Act, the Minister:

owed Australian children a duty to take reasonable care to avoid causing them personal injury or death arising from climate-driven heatwaves and bushfires, and
had substantial control over that risk and that the children were vulnerable to it.

On appeal:

The Full Court set aside the declaration. Each judge gave separate reasons.

Allsop CJ held that the duty would require the Court, at the point of breach, to decide core questions of climate policy, including how scope 3 emissions from exported coal should be weighed. Those questions are unsuitable for judicial determination (at [15], [260]-[262]). The duty was also incoherent with the EPBC Act, whose focus is the protection of species, communities and water resources (at [267], [272]).
Beach J held that there was insufficient closeness and directness between the Minister’s decision and the risk of harm. The class of potential victims was indeterminate (at [362]-[363], [702]-[704]).
Wheelahan J held that the EPBC Act did not create a relationship capable of supporting the duty. Controlling emissions and protecting the public from climate change were not roles that Parliament had conferred on the Minister under that Act (at [839], [847]-[852]). It was additionally held that approval of the extension was not, in the legal sense, a cause of personal injury to the children (at [882], [886]).

The children did not seek special leave to appeal to the High Court. The Full Court’s decision remains the leading Australian authority on climate related duties of care owed by government decision makers.

How should we reconcile these cases?

Whilst it may be tempting to read MACH as a High Court step away from Sharma, the legal reasoning is consistent, and decisions are consequent of differing legal questions.

	Sharma (Full Federal Court, 2022)	Mach Energy (High Court, 2026).
Project	Vickery coal mine extension	Mount Pleasant coal mine extension
Decision-maker	Federal Environment Minister	NSW Independent Planning Commission
Legal reasoning	Negligence (private law duty of care)	Judicial review (statutory mandatory considerations)
Statute	EPBC Act ss 130 and 133	EP&A Act s 4.15(1) and Resources SEPP cl 2.20(1)(c)
Issue	Is a duty owed to Australian children to avoid climate related injury?	Did the IPC consider what the legislation required it to consider?
Held	There was no duty; policy, incoherence, indeterminacy and causation	Consent was invalid, scope 3 conditions were not considered
Local or future harm	It is not a basis for a duty	It is not a required focus of s 4.15(1)(b)

In both cases, the court declined to make the identification of particular climate harm, whether to future generations or to a locality, the legal test. In Sharma that harm could not found a duty of care. In MACH, it was not a mandatory focus of the consent authority’s assessment.

The cases differ in their source of the obligation. Sharma asked the court to create a new duty that the EPBC Act did not contemplate. MACH enforced a duty that the NSW legislature had already written into the Resources SEPP, to consider conditions minimising all greenhouse gas emissions.

Together, the cases show that climate litigation now succeeds by holding decision makers to the process the statute prescribes, not by asking courts to invent new substantive duties.

The article is general information only and not legal advice. If you would like advice on how the environmental law today affects your project or business, our experts at Crisp Law are here to assist.

Contact Crisp Law for advice and information:

Telephone: +61 2 8042 8701

Email: admin@crisplaw.com.au

References

Photo by Albert Hyseni on

https://unsplash.com/photos/white-and-black-airplane-on-brown-sand-during-daytime-Sy_8KuxLwBI

Cases

MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35

Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc v MACH Energy Australia Pty Ltd [2025] NSWCA 163

Minister for the Environment v Sharma (2022) 400 ALR 203; [2022] FCAFC 35

Sharma v Minister for the Environment (2021) 391 ALR 1; [2021] FCA 560

Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd (2021) 252 LGERA 221