March 2019

Wrong place wrong time for the fossil fuel industry

Gloucester Resources Limited v Minister for Planning [2019] NSWLEC 7

A recent decision by Chief Justice Preston of the Land and Environment Court of New South Wales has brought climate change to the forefront of legal discussion.

Background

In 2012, Gloucester Resources Limited (GRL) lodged a development application seeking consent for a coal mine known as the Rocky Hill Coal Project. Its purpose was to produce 21 million tonnes of coal over a period of 16 years.

In 2017 the Planning Assessment Commission, as a delegate of the Minister for Planning, refused the application. Three main reasons were given for the refusal, being zoning issues, visual impact and public interest.

Decision

GRL appealed that determination. In a lengthy judgement which was handed down on 9 February 2019, Chief Justice Preston of the Land and Environment Court upheld the decision of the Planning Assessment Commission. Whilst the primary argument against approval of the RHCP focussed on the compatibility of the development with other land uses, a key factor upon which Chief Justice Preston based his decision was the amount of greenhouse gases that would be emitted from the mine if approved, and their resultant impact on climate change.

In his decision, Chief Justice Preston placed significant weight on Australia’s participation in ‘The Paris Agreement,’ a historic global climate agreement that was entered into by close to 200 countries under the United Nations Framework Convention on Climate Change. Signatories to this agreement have undertaken to tackle climate action from 2020. Australia set an ambitious target of reducing our greenhouse gas (GHG) emissions by 26-28% below 2005 levels by 2030. Chief Justice Preston held:

“The approval of the Project (which will be a new source of GHG emissions) is also likely to run counter to the actions that are required to achieve peaking of global GHG emissions as soon as possible and to undertake rapid reductions thereafter… The NSW government has endorsed the Paris Agreement and set itself the goal of achieving net zero emissions by 2050… the exploitation and burning of a new fossil fuel reserve, which will increase GHG emissions, cannot assist in achieving the rapid and deep reductions in GHG emissions that are necessary.”

The arguments put forward for approval

First, GRL argued that the GHG emissions associated with the Rocky Hill Coal Project would not necessarily cause the carbon budget to be exceeded because reductions from other sources (such as the electricity and transport sectors) would balance out against them. Chief Justice Preston refuted this position and called it ‘speculative and hypothetical.’

Secondly, GRL argued that the ‘size of the global abatement task’ meant that emissions reductions should be made where they count most and generate the least economic harm, and that to refuse consent to an individual coal mine would not achieve this. Chief Justice Preston did not accept this and held that a consent authority is not formulating policy as to how best to make global emissions reductions but must rather determine the application before it on its own merit.

Thirdly, GRL argued that if the Rocky Hill Coal Project was not approved, emissions would occur regardless as the demand for coal will not reduce and the investment for mines will simply flow to other coal producers in countries such as India and Indonesia. In addition to this, it argued that carbon leakage would actually increase if coal mining moved to other countries due to the high environmental standards of Australian coal mines comparatively. Chief Justice Preston dismissed these arguments as unsubstantiated and unproven.

Lastly, GRL argued that the GHG emissions associated with the Rocky Hill Coal Project would be justified due to the coal that would be produced being essential in the production of steel, which in turn is “critical to our society.” Chief Justice Preston found this argument to be overstated and explained that the approval of this mine in particular was not going to be a determinative factor in maintaining steel production worldwide.

At paragraph 699 of his judgement, Chief Justice Preston held:

“In short, an open cut coal mine in this part of the Gloucester valley would be in the wrong place at the wrong time…
Wrong time because the GHG emissions of the coal mine and its coal product will increase global total concentrations of GHGs at a time when what is now urgently needed, in order to meet generally agreed climate targets, is a rapid and deep decrease in GHG emissions.”

What does this decision mean?

The impact that this decision will likely have on the fossil-fuel industry is significant. The ‘wrong time’ reasoning used by Chief Justice Preston suggests that any new proponent of a fossil fuel development in Australia will need a strong offset plan to gain approval.

In a legal sense, historically it has been difficult to connect individual projects such as the Rocky Hill Coal Project to GHG emissions, as arguments such as those used by GRL have been accepted.

This decision clearly links the individual proposal to its climate change impact. With the global issue of climate change a focal consideration for individual applications, it may no longer be enough to argue that emissions from a proposal make up a fraction of global emissions.

This decision builds upon and increases the recognition of links between fossil fuel developments and climate change.

Authors: Dennis Loether and Charlie Parsons

Further contacts: Laura Raffaele and Steven Griffiths