The community benefit system

In 2025, the Queensland government introduced major reforms to the Planning Act 2016 (Qld) (Planning Act), through the Planning (Social Impact and Community Benefit) and Other Legislation Amendment Act 2025 (Amending Legislation).

These reforms introduced the community benefit system, an entirely new step in the development approval process. Under this new system, prescribed development applications must be accompanied by a Social Impact Assessment Report (SIA) and, subject to few exceptions, a Community Benefit Agreement (CBA) negotiated between the proponent and the local council to address social impacts on communities.

Currently, the system only applies to development applications for a material change of use (MCU) for a wind farm, a solar farm over 1MW or a battery energy storage system (BESS) over 50MW.

On commencement, the Amending Legislation deemed any development application for these uses that had been made but not decided as being 'not properly made'. These applications were returned to the beginning of the confirmation period, effectively restarting the application process. Absent Ministerial intervention, proponents wishing to pursue affected applications were required to develop a SIA and agree a CBA before re-lodging the application. This meant that the changes had some retrospective application, noting the usual position that applications commenced before legislative change generally continue to be assessed in line with the pre-reformed legislation.

The Planning and Environment Court's recent decision in X-Elio Sixteen Mile Solar Farm Pty Ltd v Western Downs Regional Council [2026] QPEC 31 (X-Elio) demonstrates the potential for even greater retrospective operation of the Amending Legislation. It has significant ramifications for solar, BESS and wind projects that were properly made and decided by councils before commencement of the Amending Legislation and are subsequently appealed to the Planning and Environment Court. It may also open up similar challenges in relation to future planning legislation changes that post-date development approval decisions.

The X-Elio proceedings

In X-Elio, the proponent lodged code assessable MCU applications for a 420MW solar farm and 140MW/240MW BESS. The applications were accepted as properly made on 24 November 2023 and were ultimately refused by the Council on 1 May 2024. The Council's decision was subsequently appealed by the proponent before the Amending Legislation came into effect.

The appeal asked the Court to assess the merits of the applications and determine whether they ought to be approved. The issues on appeal included impacts on rural land use. The community benefit system was not an issue in dispute between the parties.

However, before beginning such an assessment, the Court considered the effect of the Amending Legislation on the status of the MCU applications.

The developer and the Council submitted that the Amending Legislation did not apply to the MCU applications because they had been 'decided' by the Council's refusal before commencement of the Amending Legislation.

The Court disagreed, determining that:

• the Court's role in the appeal required it to consider the MCU applications anew. The Court must act as assessment manager, and assess the merits of the application having regard to law and policy as it stands at the date of the appeal;
• 'decided' indicates a certain finality. Because the MCU applications were appealed and to be heard anew, they were not conclusively decided;
• the MCU applications were therefore placed in the same position as any other undecided application on the commencement of the reforms, meaning the Amending Legislation applied;
• the Amending Legislation retrospectively made the MCU applications not properly made; and
• the MCU applications therefore could not be considered by the Court.

The practical consequence of this finding is that the Court cannot determine the merits of the MCU applications. Instead, new applications will need to be made that comply with the requirements of the community benefit system.

What does this mean for developers?

While the effect of this decision only applies to a unique type of case in the Planning and Environment Court, the potential consequences for proponents currently undergoing the time and cost of Court proceedings for such cases are significant.

The decision will have ramifications for any wind, >1MW solar or >50MW BESS development applications that were decided by councils before the Amending Legislation came into effect, appealed to the Court, and are awaiting judgment.

For proponents:

• an appeal against the refusal of a development application now has limited utility because appeal rights that would have otherwise enabled a proponent to challenge a Council's decision cannot be pursued; and
• an appeal against the giving of a development approval (for example, by a submitter) may risk a finding that the development application is no longer properly made.

For completeness, the Planning and Environment Court can exercise discretion to excuse non-compliance with the Planning Act, and effectively treat an application as properly made despite not complying with certain requirements of the legislation. As at the time of publishing, neither party has asked the Court to consider exercising its discretion. The X-Elio decision may also be subject to appeal to the Court of Appeal.

Other implications

Further ramifications of the Amending Legislation are the subject of a separate proceeding, Eurimbula Project Co Pty Ltd v Gladstone Regional Council, in which judgment is currently reserved.

Eurimbula raises questions about the relevance and weight to be given to the Amending Legislation in deciding an extension application under section 87(1) of the Planning Act. In that case, a development approval for the Eurimbula Solar and BESS project had been issued on 29 August 2018. On 28 March 2025, the proponent sought to extend the currency period of the development approval. The Council refused the extension application, for reasons that included:

• the Amending Legislation represented a material change in planning policy, the assessment process and the facts and circumstances that may affect the public interest;
• a lack of relevant works or further approvals (particularly Federal approvals) that would signify an attempt to act on the development approval; and
• crucially, the development conditions were no longer in line with community expectations.

The proponent has appealed that decision, arguing that the Amending Legislation is not a relevant factor, as Parliament did not prescribe any consequence for extension applications under assessment, unlike development applications as seen in X-Elio. The Council has submitted that an assessment under section 87 confers a wide discretion. While the Amending Legislation did not render undecided extension applications as not properly made, Council argues this does not support the reading in of a limitation to factors that may be relevant in deciding an application under section 87.

More broadly, the X-Elio decision raises questions that extend well beyond the community benefit system. The Court’s reasoning – that an appeal effectively reopens a development application to be assessed against the law as it stands at the date of hearing—has potentially wide-ranging consequences for similar future planning legislation reforms in Queensland. For developers and investors in major projects, this creates a new layer of regulatory risk: a decided development approval could be undermined by legislative changes enacted before an appeal is heard. The decision signals that proponents should factor the possibility of shifting legislative requirements into their project timelines, appeal strategies and risk assessments, not only for renewable energy projects, but for any development subject to the Planning Act.

For advice on how the X-Elio decision and the community benefit system may impact your projects, contact our Environment and Planning team.