Split decision: the High Court narrows one climate pathway and sharpens another in MACH Energy v Denman Aberdeen​

The High Court handed down its decision in MACH Energy Australia Pty Ltd v Denman Aberdeen Muswellbrook Scone Healthy Environment Group Inc [2026] HCA 35 on 7 October 2026, dismissing MACH's appeal and leaving the consent for the Mount Pleasant Optimisation Project invalid — but on reasoning that flips both limbs of the Court of Appeal's decision. Proponents won a unanimous narrowing of the "likely impacts" consideration under s 4.15(1)(b) of the EP&A Act, but lost by 3:2 on the distinct duty under cl 2.20(1)(c) of the Resources SEPP to consider conditions minimising all greenhouse gas emissions, including Scope 3. Both halves matter for mining, petroleum and extractive industry proponents in NSW.

What the High Court decided

The litigation concerns the Independent Planning Commission's grant of consent on 6 September 2022 for the Mount Pleasant Optimisation Project (SSD 10418), a 22-year extension of the Mount Pleasant coal mine in the Hunter Valley. Robson J dismissed all judicial review grounds at first instance ([2024] NSWLEC 86). The Court of Appeal ([2025] NSWCA 163) allowed the appeal, declared the consent invalid and remitted the matter to the Land and Environment Court — but on the basis that the Commission had failed to consider local climate impacts under s 4.15(1)(b), while rejecting the Scope 3 ground under cl 2.20(1)(c).

The High Court (Gageler CJ, Gordon, Edelman, Jagot and Beech-Jones JJ) dismissed MACH's appeal with costs, granting leave to the respondent to file an amended notice of contention. The orders replicate the result below, but the reasoning is substituted on both limbs. The High Court did not simply uphold the Court of Appeal: the objector won on the ground it had lost below, and lost the ground on which it had succeeded.

Limb one: s 4.15(1)(b) — unanimous, and pro-proponent

All five Justices held that the Court of Appeal misconstrued s 4.15(1)(b) of the EP&A Act, which requires a consent authority to consider "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 construction question was whether the words after the first comma impose a distinct, geographically focused mandatory consideration. The Court said no. As Gageler CJ and Jagot J put it at [32], "the words after the first comma function only to describe or explain aspects of the scope of the words before the comma". Their Honours observed at [33] that the contrary reading wrongly suggests "the focus of s 4.15(1)(b) is the likely impacts of the development in the locality rather than the likely impacts of the development". Gordon J was emphatic at [152]: "The phrase 'likely impacts of [the] development' in s 4.15(1)(b) contains no geographic limit." Beech-Jones J agreed at [276] that impacts "in the locality" are "neither the exclusive nor the central focus".

On the facts, "the Commission's consideration of the impacts of climate change globally necessarily encompassed the required consideration of the impacts of climate change locally" (Gageler CJ and Jagot J at [46]–[47]). Because global consideration subsumed local consideration, the third, undecided "capability" question — whether localised climate attribution is even feasible — did not arise. At [72]–[73] the Court concluded: "The Court of Appeal misconstrued and therefore misapplied s 4.15(1)(b) of the EPA Act."

The practical consequence for proponents is significant. Consent authorities are not required to undertake granular, locality-specific climate attribution exercises, with the evidentiary burden and challenge risk that would involve.

Limb two: cl 2.20(1)(c) — a bare 3:2 majority, and pro-objector

The second limb went the other way, and here the Court divided 3:2. Gordon, Edelman and Beech-Jones JJ, in separate concurring reasons, held that the Commission failed to discharge the duty in cl 2.20(1)(c) of the Resources SEPP to consider whether consent should be subject to conditions to ensure "that greenhouse gas emissions are minimised to the greatest extent practicable". Gageler CJ and Jagot J dissented jointly.

The majority's reasoning turns on the distinctness of the obligations in cl 2.20(1) and cl 2.20(2). The Commission's reasons recorded that Scope 3 emissions "are appropriately regulated and accounted for through broader national policies and international agreements (such as the Paris Agreement)" and that it had "considered all emissions associated with the Project (including Scope 3 emissions) in its assessment and determination". Gordon J held at [182]–[183] that the Paris accounting point answered the cl 2.20(2) obligation to consider the GHG assessment, but "it does not address the Commission's obligation in cl 2.20(1)(c), which relates to all greenhouse gas emissions (including Scope 3 emissions), and which requires it to consider imposing conditions to minimise to the greatest extent practicable those emissions". Beech-Jones J put it this way at [290]: the obligation "is not discharged simply by considering whether or not a consent should be issued subject to conditions in order to address or appropriately regulate scope 3 GHG emissions. The 'active intellectual process' … is directed to considering whether the consent should be issued subject to conditions that have a sharper objective, namely to ensure that all GHG emissions, including scope 3 GHG emissions, are minimised to the greatest extent practicable."

Scope 3 emissions constituted 98% of the project's total predicted emissions. Edelman J's observation at [228] captures the majority's instinct: "The manifestation of an active intellectual process which engaged only with the possibility of conditions upon two per cent of those emissions is not the consideration required by cl 2.20(1)(c)."

On materiality, Gordon J applied the framework consolidated in LPDT v Minister for Immigration [2024] HCA 12: "There was a realistic possibility that, had the Commission done so, conditions to minimise Scope 3 emissions could have been imposed" (at [195]). MACH could not demonstrate inevitability of outcome. And at [196]–[198], her Honour rejected the Court of Appeal's reliance on the objector's "forensic choice" not to propose conditions: the onus of proposing minimisation conditions (or demonstrating impracticability) sits with the proponent, not the objector.

The dissenters did not dispute the width of the duty or the inclusion of Scope 3 emissions — that is common ground across all five Justices. Their difference was characterisation of the Commission's reasons: "It cannot be inferred that the Commission failed to comply with [cl] 2.20(1)(c) of the Resources SEPP" (at [63]). The split is about discharge, not about scope. That makes the holding narrow, and — as a 3:2 decision on a provision the NSW Government could amend by executive instrument — vulnerable both to SEPP amendment and to future distinguishing on better-drafted reasons.

The net result

The consent is invalid, the appeal was dismissed with costs, and the matter stands remitted to the Land and Environment Court under Division 3 of Part 3 of the LEC Act (ss 25B–25E). Under that regime the Court may, instead of leaving the consent void, suspend it and specify terms whose satisfaction will validate it (s 25B), and s 25E imposes a positive duty on the Court to consider that course. The expansion consent's fate turns on the outcome of the remitter. The mine itself reportedly continues to operate under a separate six-year extension approved in August 2026, so there is no immediate operational consequence, but the position on the 22-year expansion is unresolved.

Why this is a distinctly NSW decision

The operative result does not travel. Clause 2.20 is a NSW-only provision of the Resources SEPP (carried over, in materially identical terms, from cl 14 of the Mining SEPP 2007, so the existing line of authority — most notably Mullaley Gas and Pipeline Accord Inc v Santos NSW (Eastern) Pty Ltd [2021] NSWLEC 110 — remains directly applicable). Section 4.15(1)(b) is uniquely worded NSW text. The conditional-validation remedy in Division 3 of Part 3 is a NSW-only innovation. And the precedent chain the Court was navigating — Mullaley, Ross v Lane, El Khouri, Bingman, Pallas Newco — is NSW planning jurisprudence through and through.

On Ross v Lane [2022] NSWCA 235: the plurality distinguished and criticised it, but did not overrule it. It retains relevance within its now-confined scope, and practitioners should not treat it as displaced wholesale.

The administrative law doctrine, however, has broader national significance.

What it means for mining applications in other states

Queensland. There is no cl 2.20 analogue, but the Land Court independently reached Scope 3 cognisability in Waratah Coal Pty Ltd v Youth Verdict Ltd (No 6) [2022] QLC 21, recommending refusal of the Galilee Coal Project on combined climate and human rights grounds under the "standard criteria" of the Environmental Protection Act 1994 and the Human Rights Act 2019 (Qld) — the latter a uniquely Queensland layer with no NSW equivalent. The appeal was discontinued in February 2023, so Waratah Coal stands. Rolleston Coal [2025] QLC 22, applying the same framework but recommending approval, shows the framework is not a per se bar. Objectors in Land Court objection hearings are likely to rely on the High Court's reasoning on "active intellectual process".

Western Australia. Under Part IV of the Environmental Protection Act 1986, the EPA's Greenhouse Gas Emissions Guideline (November 2024) already requires proponents to report Scope 1, 2 and 3 emissions. The policy settings remain volatile, with some projects routed toward the Commonwealth Safeguard Mechanism, but WA proponents are already assessing downstream emissions as a matter of course.

Victoria and South Australia. Victorian Environment Effects Statement processes have treated both upstream and downstream Scope 3 emissions as relevant considerations when assessing a project's greenhouse gas impacts and consistency with climate policy.; SA's PDI Act 2016 pathway bites only for major "called in" projects. Neither has a cl 2.20 equivalent.

Commonwealth. The EPBC Act is silent on Scope 3, and Minister for the Environment v Sharma [2022] FCAFC 35 confirmed both the absence of a duty of care and that the EPBC Act is not a greenhouse gas instrument — with Beach J expressly contrasting the EPBC Minister's limited function with the NSW IPC's express GHG obligation. The Safeguard Mechanism covers Scope 1 only, post-approval.

In short: directly, this decision changes little interstate; by influence and doctrine, a fair amount. The trend — decision-makers must visibly grapple with downstream emissions — is national, and reinforced internationally by R (Finch) v Surrey County Council [2024] UKSC 20, itself also a 3:2 decision requiring EIA assessment of downstream combustion emissions.

Beyond coal — and beyond resources

Clause 2.20 applies to all "development for the purposes of mining, petroleum production or extractive industry". The sharpened Scope 3 conditions duty therefore reaches metalliferous mining, coal seam gas and petroleum production, and quarrying — not just coal. And although cl 2.20(1)(c) does not expressly refer to upstream or downstream emissions, cl 2.20(2)'s express reference to downstream emissions confirms the duty catches both: for a coal mine, Scope 3 embraces not only combustion of exported product but also upstream fuel and electricity extraction/production and domestic rail and shipping.

It does not reach non-resources high emitters. For gas-fired power, smelters, cement works, data centres and large industrial projects, greenhouse gas emissions remain a general s 4.15(1)(b) "likely impacts" consideration, supplemented by project-specific SEARs and any applicable environmental planning instruments (the geographically confined and materially weaker cl 2.19 of the Industry and Employment SEPP for the Western Sydney Employment Area is the closest analogue). There is no "consider conditions to minimise to the greatest extent practicable" duty for those classes. The NSW Government could extend a cl 2.20-style duty to other development classes by SEPP amendment, and that policy possibility is worth watching.

The exportable administrative law

Several strands of the decision will be cited well beyond planning law:

•     Materiality. The Court applied the LPDT [2024] HCA 12 consolidation: an error is jurisdictional only if material — a realistic, not fanciful, possibility that the decision could (not would) have been different; the threshold is not onerous; the applicant bears the onus; the inquiry is strictly backward-looking; and the court must not stray into merits review. This is the Hossain–SZMTA–MZAPC–Nathanson lineage.

•     The taxonomy of statutory duties. Section 4.15(1) is a conditional duty ("such as are of relevance"); cl 2.20(1) is an unconditional, itemised duty. The distinction drove the outcome.

•     The content of "consideration". The Plaintiff M1/2021 [2022] HCA 17 formulation — read, identify, understand, evaluate — applied with its accompanying caution that "active intellectual process" is not a warrant for merits review, consistently with Minister for Immigration, Citizenship and Multicultural Affairs v McQueen [2024] HCA 11 and Minister for Immigration and Citizenship v Li [2013] HCA 18, and with the weight doctrine from Peko-Wallsend and Sean Investments.

•     Reading reasons. The structure of a decision-maker's reasons can itself ground an inference of non-consideration. The 3:2 split shows how closely the Court can divide on that inferential exercise.

What you need to do

For general counsel, project directors and heads of approvals:

1.   Audit current and pending EISs for their Scope 3 treatment against the sharpened cl 2.20(1)(c) reasoning. Under cl 7(1)(d)(iv) of Sch 2 to the Environmental Planning and Assessment Regulation 2000 (NSW), it is the proponent — not the Department, the Commission or objectors — who carries the onus to propose Scope 3 minimisation conditions, or to put on evidence explaining why conditions are impracticable: the Mullaley pathway, where the Commission lawfully declined to condition Scope 3 after a reasoned engagement with the question.

2.   Stress-test existing consents still within challenge windows, or on remittal, for exposure to objector challenge invoking the new ratio. The most exposed are consents whose reasons dealt with Scope 3 only through Paris Agreement / national accounting language — precisely the reasoning the majority held insufficient.

3.   For in-flight applications, consider supplementary assessment material before determination, and work to ensure the consent authority's reasons expressly answer the cl 2.20(1)(c) conditions question for each emissions scope. Concrete conditions the Court identified as the kind of possibilities a consent authority could consider include coal-washing requirements before export, calorific-content thresholds, limiting exports to countries with Nationally Determined Contributions under the Paris Agreement, requiring exported coal to be used only in power stations deploying technologies such as carbon capture and storage or fluidised bed combustion, and emissions offsets.

4.   Anticipate elevated judicial review risk and tighter departmental and IPC assessment practice, particularly given the reported pipeline of 17-plus NSW coal proposals.

5.   Do not assume invalidation is the worst outcome. The Court endorsed KEPCO Bylong, in which consent was refused outright to a new coal mine because the proponent had proposed no condition addressing the 98% of emissions falling within Scope 3. A proponent that fails to propose Scope 3 minimisation conditions is exposed to refusal, not just to a vulnerable consent.

Remediating Scope 3 treatment in the EIS addresses both risks — the s 4.15(1)(b) "likely impacts" consideration and the cl 2.20(1)(c) conditions duty — at once.

The watching brief

Three issues bear watching. The 3:2 margin leaves the holding vulnerable: a differently constituted bench, or well-drafted Commission reasons, could confine it quickly. Clause 2.20 itself remains current and unamended, with no amendment or review announced as at the date of writing, although federal ministers have characterised the ruling as "technical" and jurisdiction-specific and a NSW policy response cannot be excluded. The LEC remitter on conditional validation under ss 25B–25E will be the first real test of what "practicable" Scope 3 conditions look like in NSW, and may prove as consequential in practice as the High Court's decision.