Following recent developments in assessing climate change impacts of coal projects, the New South Wales (NSW) government is considering limiting the ability of consent authorities to refuse or impose conditions on a project on the grounds of its scope 3 emissions, i.e., those emissions arising out of the coal being burnt.

At present, consent authorities assessing a new coal project would be required to consider whether to impose conditions aimed at ensuring, amongst other things, that greenhouse gas emissions (including downstream emissions) are minimised to the greatest extent practicable. This includes considering any applicable state or national policies concerning emissions (State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 [Mining SEPP] cl 14).

There have been two recent decisions to refuse planning approvals for coal mines on grounds including climate change impacts of emissions, notably the Rocky Hill Coal Mine which was refused planning consent by the NSW Land and Environment Court, and a proposed coal mine in Bylong Valley refused by the NSW Independent Planning Commission. A recent approval of the United Wambo coal mine included conditions requiring the coal only be exported to countries which had ratified the Paris agreement. 

If such amendments took place, this may restrict the ability of public interest environmental litigants to appeal approvals of fossil fuels projects on the grounds of its downstream emissions, and require objectors to establish other compelling grounds to warrant refusal of the project by the Court or consent authority. 

However, this will likely only superficially reduce litigation and transitional risks for the fossil fuels industry. With a number of insurers and banks under pressure to divest from insuring or lending to coal projects, and activist shareholders applying pressure to divest and diversify fossil fuels investments, it is likely that other market and litigation drivers will keep scope 3 emissions on the agenda.