Energy and mining sectors reeling after High Court decision on coal mines’ Scope 3 emissions

Australia’s giant mining and energy sectors have been left dealing with major uncertainty after the High Court ruled planning authorities needed to account for the the impact on local climate change before approving coal projects.

In a decision hailed by climate and environment activists and decried by major industry, the High Court said Scope 3 emissions — those caused indirectly by a company’s product and value chain — should have been taken into account when approving fossil fuel projects.

The case centred around MACH Energy’s Mount Pleasant coal mine in the Upper Hunter Valley after the company sought to extend its operating life by 2022. Hunter Valley residents, funded via crowdfunding, launched a legal challenge that was initially unsuccessful but won last year.

The company subsequently took its case to the High Court but on Wednesday lost in a 3-2 spilt decision. It was the first time the High Court was asked to consider climate grounds in determining a case.

Minerals Council of Australia chief executive Tania Constable described the decision as a further blow the nation’s prospects of meeting demand for high-quality coal.

“This decision sends a very negative signal to Australia’s trade and investment partners about sovereign risk in this market,” she said.

“Now mines may have to work out how to reduce emissions from their export customers, or scope 3 emissions.”

“Australian resource companies should not be forced into a situation where well-funded legal attacks over a number of years require a High Court appeal.

“Other investors in Australia’s resource sector will carefully review the outcome from today’s High Court judgement and the potential ramifications for other projects.

Gas giant Woodside was considering and reviewing the judgment, a spokesperson on Wednesday confirmed.

The decision has also sparked a political fight, with the Coalition calling for Prime Minister Anthony Albanese and NSW Premier Chris Minns to change the laws or risk threatening thousands of mining jobs.

“This is absurd. Under international rules Labor champions, emissions are counted where coal is used, not mined,” Opposition Leader Angus Taylor and Nationals Leader Matt Canavan in a joint statement said.

“The Coalition calls on the Minns Government to act immediately to introduce legislation amending the Environmental, Planning and Assessment Act.

“It must make clear that overseas emissions from Australia’s exported resources are not a consideration of project approvals.”

A MACH Energy spokesman said the mine’s workers had lived with fear and uncertainty for too long.

“While we are disappointed with the outcome . . . (we) will carefully review the judgment to understand its implications for future project assessments and environmental approvals,” he said.

Those who brought the case, and environmental groups, were celebrating their victory, saying “common sense” had prevailed.

Muswellbrook landowner Wendy Wales led the case against the planned expansion of the Mount Pleasant mine.

The retired science teacher dubbed the decision a win for Hunter communities.

Ms Constable has called on the Minns Government — responsible for some of Australia’s richest coal deposits — to further protect planning approvals.