Australia gets its first independent federal environmental regulator

On 1 July 2026, Australia's regulatory landscape for Commonwealth project assessment and approvals, compliance and enforcement changed significantly. For the first time, the Commonwealth will have a dedicated independent federal environmental regulator, the National Environmental Protection Agency (NEPA).

A suite of other significant reforms to the EPBC Act — including enhanced compliance and enforcement powers, increased penalties, and new regulatory tools — was slated to commence on 1 July 2026. However, the Federal Government has advised, in response to feedback, that more time was needed for consultation on these reforms. These other elements will commence at a future date to be proclaimed. The Federal Government has indicated that these may come into play by August to September 2026.

This article explains what the NEPA is, what it does, its powers following 1 July 2026, the other frameworks which are yet to come into effect to support its establishment, and what businesses should do to prepare.

How did we get here?

In late 2025, the Commonwealth introduced significant reforms to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) following years of review. Read our further insights on the reforms.

Commencement of the reforms has been staggered. Some early changes took effect immediately, a further tranche of changes commenced on 20 February 2026, and the next tranche (including NEPA) commenced on 1 July 2026. The balance of the reform package will commence no later than 1 December 2026.

What commenced on 1 July 2026?

The Commonwealth's new independent assessment and compliance entity

The National Environmental Protection Agency Act 2025 (NEPA Act) and related amendments to the EPBC Act commenced on 1 July 2026.

This legislation established the NEPA and conferred a range of functions on the NEPA under the EPBC Act and other Commonwealth Acts, including those governing waste and hazardous waste, ozone and greenhouse gas management, and underwater cultural heritage. This article focuses on its EPBC Act functions.

The NEPA is led by a CEO, who will inherit powers from the Minister and Secretary of DCCEEW. John Bradley PSM has been appointed as the inaugural CEO of the NEPA, having most recently led Victoria’s environmental department for a period of eight years.

The NEPA's core function is to act as an independent regulator able to undertake regulatory, compliance, and enforcement actions (including conducting environmental audits and compliance monitoring) under these Commonwealth Acts. From 1 July 2026, the NEPA CEO can exercise the compliance powers previously conferred on the Minister under the EPBC Act. Further changes to the EPBC Act to increase penalties and enhance enforcement powers are yet to commence. These are explored below.

From 1 July 2026, under the EPBC Act, the Minister may delegate certain functions to the NEPA CEO or the NEPA staff. In practice, and similar to current delegations to officers of the Department of Climate Change, Energy, the Environment and Water (DCCEEW), the expectation is that the NEPA will make the majority of decisions on whether projects are controlled actions, and whether they should be approved. It remains to be seen when these delegations will begin to take effect and assessment functions effectively transfer to the NEPA.

Certain decisions cannot be delegated to the NEPA and will remain with the Minister. These include entering into or cancelling bilateral agreements, accrediting State and Territory frameworks, approving national interest proposals, making bioregional plans, and making National Environmental Standards (NES).

The NEPA CEO will conduct periodic reviews of bilateral agreements between the Commonwealth and states and territories to ensure consistency with the EPBC Act and will maintain public registers of regulatory decisions to promote transparency and accountability.

Handover between DCCEEW and the NEPA is expected to take some time. Prospective project proponents should be prepared to navigate 'teething issues' associated with the handover.

Head of Australia's environmental data agency

1 July 2026 also saw the establishment of the Head of Environment Information Australia (EIA) under the Environment Information Australia Act 2025 (Cth). The functions of the Head of EIA are to provide the Minister, the NEPA CEO and the public with access to high-quality information and data relating to the environment, publish State of the Environment Reports, and maintain databases of national environmental information assets and environmental economic accounts.

What is still to commence?

The significant enforcement powers and other regulatory tools to be conferred on the NEPA CEO under Schedule 1, Parts 1 and 2 of the Environment Protection Reform Act 2025 (Cth) will not start until a later date.

The Federal Government had initially proposed for these provisions to be proclaimed on 1 July 2026 to allow the NEPA to have all of its powers available upon establishment. This has since been postponed to allow additional time for stakeholders to familiarise themselves with the upcoming changes.

The following sections outline the key reforms which will now come into force at a later date subject to proclamation (potentially August to September 2026). They will be supported by revised regulations.

Increased enforcement powers — and immediate audit exposure for existing approvals

The NEPA CEO does not yet have access to the enhanced suite of enforcement powers.

One of the more significant tools to be granted to the NEPA CEO will be the new environment protection order (EPO) power. Once these provisions commence, an EPO (essentially a 'stop work order') may be issued where the NEPA CEO reasonably believes that:

• a person has contravened, is contravening, or is likely to contravene the EPBC Act, the regulations, or a condition of an environmental authority or exemption; and
• that contravention is causing, or poses an imminent risk of, serious damage to the relevant protected matter or environment.

Requirements that may be imposed by an EPO include discontinuing or not commencing specified activities, changing or restricting the manner in which activities are carried out, or requiring specified action to be taken. An EPO is limited to a maximum duration of 14 days, which the NEPA CEO may extend by one further period of up to 14 days. Notably, the NEPA CEO will not be required to observe the natural justice hearing rule when issuing or varying an EPO.

In addition, the NEPA will eventually take on an expanded environmental audit framework. Once this framework commences:

• the NEPA CEO may issue 'directed audit' notices. The scope of these notices will be expanded beyond the holder of, or a person otherwise approved to take action under, an environmental authority and can now be issued to persons subject to an environmental order (including an EPO, conservation order, remediation determination, or remediation order) and persons to whom an environmental exemption applies, as well as proponents of an approved action. A directed environmental audit is conducted by a registered auditor appointed by the audited person; and
• the NEPA CEO without prior notice may appoint an authorised officer or a registered auditor to conduct a 'compliance audit' of a range of activities carried out – or purportedly carried out – under an authority granted under the EPBC Act.

Increased penalties

The higher penalty regime which passed as part of the EPBC Act reforms is also yet to commence.

The new civil penalty formula is designed to disincentivise a 'cost of doing business' approach to compliance. From commencement of this regime, for the most serious breaches, the maximum civil penalties will be:

• for individuals, the greater of 5,000 penalty units ($1,650,000 as of 1 July 2026), or three times the sum of the benefit derived, and detriment avoided from the contravention; and
• for corporations, the greatest of 50,000 penalty units ($16,500,000); three times the benefit derived or detriment avoided; or 10% of annual turnover for the relevant 12-month period, capped at 2.5 million penalty units ($825 million).

Maximum criminal penalties will also increase for the most serious offences under the EPBC Act, including taking an action that has, or is likely to have, a significant impact on a listed threatened species or ecological community. These will be:

• for individuals, the maximum criminal penalty increases from 420 penalty units ($138,600) to 1,000 penalty units ($330,000); and
• for body corporates, the maximum criminal penalty increases from 2,100 penalty units ($693,000) to 5,000 penalty units ($1,650,000).

Negotiation of bilateral agreements

Bilateral agreements will underpin the Government's goals of streamlining assessments and reducing duplication. Once the relevant provisions commence, any new bilateral agreement, and any existing agreement varied after that date, must satisfy three new requirements:

• the accredited framework must be consistent with the prescribed NES;
• actions approved under it must not have unacceptable impacts; and
• actions must pass the net gain test.

DCCEEW is in the process of agreeing new bilateral agreements with states and territories which meet these requirements, supported by $47.6 million in funding allocated in the 2026-27 Federal Budget. These agreements are not intended to be signed until the NES are finalised later this year.

Existing assessment bilateral agreements will continue to operate under pre-reform requirements until varied or replaced. However, these bilateral agreements now fall within the NEPA's monitoring and audit functions, and the NEPA CEO must arrange a review of the operation of those agreements within three years, followed by a recurring five-year cycle, and may conduct assurance reviews at any time.

Protection Statements

In the future, the Minister may, by legislative instrument, make Protection Statements for listed threatened species and ecological communities, consolidating Recovery Plans, Conservation Advices, and related policies into a single instrument that guides decision-makers.

Protection Statements clarify what a decision-maker must consider when assessing whether to approve an action relevant to the listed threatened species or ecological community. Once made, a Protection Statement is subject to a mandatory five-year review cycle and must be considered when negotiating bilateral agreements and making bioregional plans.

The Federal Government had proposed to bring these changes forward to support bilateral agreement negotiations. This has since been postponed pending finalisation of the supporting regulations.

Unacceptable impact definition

A fundamental concept under the reforms is that the Minister may not approve an action that has an 'unacceptable impact' on matters of national environmental significance. Unacceptable impacts must be avoided and may not be offset.

The definitions in the EPBC Act of 'unacceptable impact' have not yet commenced. These were initially slated to commence with the start of the NEPA and to support bilateral agreement negotiations and the making of Protection Statements. They will now take effect at a later date along with these related concepts.

While the definitions may still commence early, these criteria will only apply to individual projects once the full suite of reforms commences later this year. Transitional arrangements ensure that the definition does not apply to any approval decision, including earlier 'clearly unacceptable' decisions by the Minister, made before the commencement of the balance of reforms.

Rulings

The NEPA CEO will eventually have the power to issue formal Rulings, which are written opinions on how the law, regulations, or NES apply to a specific situation where the relevant decision is vested in NEPA. These powers were proposed to be brought forward to allow the NEPA CEO to make Rulings ahead of the full suite of reforms. This has since been postponed to allow further consultation on regulations supporting these powers.

Decision-makers performing functions under the EPBC Act must not act inconsistently with a relevant Ruling, unless they are satisfied that it would be inappropriate to do so in the particular circumstances, in which case they must publish their reasons for the inconsistency.

This is a tool businesses can use in the future to obtain regulatory certainty before committing to a referral or project design. Proponents facing novel issues, particularly ahead of the new unacceptable impacts requirement coming into effect, should consider proactively seeking a Ruling once these provisions commence.

The Minister may also make Rulings, but only in relation to provisions of the EPBC Act that confer functions on the Minister — not in relation to provisions vested in the NEPA CEO. Both Ministerial and CEO Rulings will be reviewable on a five-year cycle.

Minor or preparatory works consents

Once the supporting regulations commence, proponents with controlled action decisions currently under assessment will be able to apply to the Minister for written agreement to undertake minor or preparatory works while awaiting an approval decision. If agreed, those works will be exempt from the offence provision in section 74AA(1) (which makes it an offence to commence an action that has been referred but not approved).

Examples of works that may qualify include site investigations, geotechnical drilling, and enabling works such as access track construction. Once operative, the Minister will need to be satisfied that:

• the works are a minor or preparatory component of a larger action;
• impacts to matters protected under Part 3 of the EPBC Act are genuinely minor and capable of being remediated; and
• it is appropriate for the person to undertake the proposed works before the larger action has been assessed and approved.

The application would need to be made in writing, and the Minister (or the NEPA under delegation) will be required to decide within 20 business days of receiving a complete application.

While the Federal Government had initially proposed to bring these changes forward to give proponents early access to this improved flexibility, industry will now need to wait several months.

Updated reconsideration processes

New provisions for reconsiderations of controlled action decisions have also been postponed. Once proclaimed, two changes will be particularly significant for proponents:

• First, requests from persons other than the designated proponent must now be made within 28 business days of the Minister publishing notice of the original decision.
• Second, the substantive information requirements for a valid reconsideration request, previously set out in regulations, are now embedded directly in the primary legislation under section 78A, including requirements to provide substantial new information and demonstrate a high degree of certainty as to its quality and accuracy.

Provisions allowing operations to continue during a reconsideration assessment (section 79E) have already commenced on 20 February 2026.

A new mechanism will also allow the Minister to reconsider 'particular manner' decisions, essentially providing for the variation of the conditions which attach to the conduct of the action and which mean that it is not a controlled action (section 79A). The prescribed information requirements for applications under this mechanism will be set out in regulations yet to commence.

Lapsing of 'not controlled action' decisions

Once proclaimed, a new lapsing regime will also apply to non-controlled action (NCA) and NCA-particular manner (NCA-PM) decisions. Where an action has not substantially commenced within five years of the date of the notice, the decision will lapse, meaning the proponent can no longer rely on it and the action must be re-referred. This change will not apply retrospectively to NCA decisions made before the proclamation date.

The Minister must notify the proponent at least six months before the five-year anniversary. Proponents may request an extension of up to ten years from the original decision date, subject to Ministerial approval. The detailed prescribed requirements for extension requests — including reasons for the delay, a proposed extended date, and evidence of steps being taken to substantially commence the action — will be set out in regulations yet to commence.

Proponents who receive NCA or NCA-PM decisions after the proclamation date should be aware of the 5-year lapse date for their referred action and plan accordingly.

Takeaways

With the commencement of the NEPA and the looming commencement of the balance of its powers, the following steps are appropriate regardless of whether you are seeking EPBC Act approval in the future, are the operator of an existing approved project, or an investor with EPBC Act-exposed assets:

1. Prepare for the enhanced compliance regime by strengthening internal compliance governance. Invest now in strengthening internal compliance systems and condition-reporting frameworks. Review governance arrangements — including internal reporting lines, escalation protocols and incident response procedures — to ensure they are fit for purpose under the new regime, with particular attention paid to the NEPA's forthcoming EPO and audit powers. Increased penalties mean these frameworks need to be fit-for-purpose and effective.
2. Conduct a compliance audit of all EPBC Act approval conditions. Map your current operations against each condition of your existing EPBC Act approvals, particular manner requirements and exemptions, ideally under privilege. The NEPA CEO's compliance audit powers will apply to all existing authorities and may be initiated without prior notice — though the detailed audit procedures and auditor registration framework will be prescribed by regulations yet to commence. Being proactive and prepared for a compliance audit once the provisions commence is the most cost-effective risk management step available to project operators right now.
3. Familiarise yourself with the upcoming regulatory tools. Consider how they can be best utilised for your project once they have commenced. For example, proponents may seek Rulings from the NEPA CEO to obtain binding written opinions on how the law applies to their specific situation and may apply for consent to undertake minor or preparatory works while an approval decision is pending. Both tools can reduce delay and provide greater project certainty if leveraged early.
4. Know your decision-makers. Controlled action decisions and assessments are expected to shortly move from DCCEEW to the NEPA under delegations. As with any changing of the guard, there may be 'teething issues' in moving these processes over to new systems. The Government has indicated that it is undertaking work with the NEPA to set the culture and to respond to identified concerns around responsiveness, transparency and collaboration within assessment teams.
5. Engage early with NES to inform project and referral design. These standards will directly shape the content of future environmental assessments and approval conditions, irrespective of the precise date on which the surrounding provisions commence. The draft NES for Data and Information and the NES for Community Engagement are currently open for public consultation, closing on 7 July 2026. Early engagement with the draft NES allows you to identify gaps in existing environmental documentation and to position your project competitively ahead of the expected commencement of the final tranche of the reform package.

For advice on how these compliance and enforcement reforms may impact your projects, or to discuss strategies for managing increased regulatory scrutiny under the reformed EPBC Act, contact our Environment and Planning team.

For further reading, explore our EPBC Act Reforms – What You Need to Know series.