Australia’s highest court has just delivered its first-ever decision in a climate case. And it could sour the economic argument for developing new coal and gas projects in New South Wales, and possibly Australia.
This High Court judgement is timely – Australia is co-hosting an international pre-COP31 climate summit in the Pacific this week and is facing renewed pressure from Pacific leaders over fossil fuel projects.
The court’s decision on Wednesday – in a case brought by a community group against mining company MACH Energy over a coalmine expansion – is not a unified legal declaration against fossil fuels.
But this restrained, technical judgement quietly sets a new standard for coal and gas projects in the state – and potentially across the country. It means planning authorities must consider the whole carbon footprint of these projects, including the emissions produced by customers burning these fossil fuels overseas.
Although the decision concerns one specific coal mine – MACH Energy’s Mount Pleasant coal mine in NSW – it directly affects the 17 other coal proposals currently in the state’s planning pipeline.
It could also provide a legal blueprint for how courts across the country handle future cases against fossil fuel projects.
Remind me, what is climate litigation?
Climate litigation involves taking governments or companies – and occasionally individuals – to court in a bid to hold them responsible for climate harms.
There are now thousands of these cases worldwide. After the United States and Brazil, Australia has more of these cases than anywhere else: 193 cases by the end of 2025. This wealth of climate litigation is due to the prevalence of fossil fuel projects in Australia, coupled with lax regulation and high community engagement.
Climate litigation is used because a court can legally require governments and companies to act, in a way that community opposition or political pressure can’t. It is particularly effective where government regulation is slow, weak or missing altogether.
What is this case about?
The Mount Pleasant open-cut coal mine sits near Muswellbrook, in NSW’s Hunter Valley. It was originally approved to run until December 2026, digging up to 10.5 million tonnes of coal each year.
In 2021, the mine’s owner, MACH Energy, sought to extend its life by 22 years, and double its output to 21 million tonnes a year until 2048.
Most of the mine’s climate footprint does not come from the mine itself, but from the burning of the coal it produces. The vast majority of its emissions are classified as “scope 3” – this includes the emissions produced when the mine’s coal is burned overseas.
In 2022, the Independent Planning Commission, the body that decides on major NSW projects, approved the expansion of the mine. But a local community group, the Denman Aberdeen Muswellbrook Scone Healthy Environment Group, challenged that approval in the NSW Land and Environment Court.
The community group argued the planning commission had failed to ask how the mine’s emissions would worsen climate change in the Hunter region. The group also argued the commission breached a NSW planning rule that required it to consider imposing conditions to minimise greenhouse gas emissions, including scope 3 emissions, to the “greatest extent practicable”.
Although the community group lost in the Land and Environment Court, the NSW Court of Appeal unanimously agreed with their arguments, and declared the approval invalid in July 2025. MACH Energy appealed this decision, bringing the case to the High Court in May this year.
What did the High Court decide?
The High Court’s decision to oppose the Mount Pleasant mine expansion was not unified: three judges were in favour, and two against.
The three judges in favour reached the same conclusion. They ruled the Independent Planning Commission didn’t do enough to assess the mine’s scope 3 emissions, or how these might be mitigated or reduced.
They also rejected the idea that scope 3 emissions, when they happen overseas, are someone else’s problem. As Justice Michelle Gordon put it, these emissions have the same detrimental impact no matter how they are categorised.
This means that for every NSW coal or gas project approval, decision-makers must now consider imposing conditions to deal with scope 3 emissions, such as requiring companies to buy carbon offsets.
However, offsets are no silver bullet, as they allow companies to compensate for their current emissions and effectively keep burning the same amount of fossil fuels.
What comes next
Community groups now have a clear, High Court-endorsed basis to challenge approvals where authorities haven’t properly assessed a project’s full carbon footprint.
In NSW, developers of future coal projects will be expected to propose ways to curb their scope 3 emissions, potentially at significant cost. This could dramatically reshape the economic case for continued fossil fuel production in Australia.
The case now returns to the NSW Land and Environment Court, which can suspend the operation of the mine or set conditions on its scope 3 emissions. The latter option, however, may be extremely expensive for MACH Energy.
The High Court’s decision is consistent with other recent rulings across the globe.
In Norway and the United Kingdom, courts have required decision-makers to deal with all greenhouse gas emissions linked to fossil fuel projects, not just those from the project site itself.
And last year, the International Court of Justice found countries are legally required to assess the effects of fossil fuel projects, both in their own jurisdictions and overseas.
While the High Court’s ruling is focused on NSW law, courts and decision-makers across Australia are paying close attention. This landmark decision shows the climate harms of fossil fuels can no longer legally be ignored.
Nina Araneta-Alana, Research fellow, Laureate Program on Global Corporate Climate Accountability, The University of Melbourne; Jacqueline Peel, Professor of Law, The University of Melbourne; Liz Hicks, Lecturer in Law, The University of Melbourne, and Suzanne Varrall, Research Fellow, Laureate Program on Global Corporate Climate Accountability, The University of Melbourne
This article is republished from The Conversation under a Creative Commons license. Read the original article.
