Mining company Kepco fails to convince High Court to hear Scope 3 test case

The High Court has rejected Kepco Bylong Australia's application for leave to appeal over the 2019 decision by the NSW Independent Planning Commission (IPC) to refuse the mine project in the Bylong Valley. The company argued that the IPC, and subsequently the NSW Court of Appeal, misconstrued clause 14 of the State Environmental Planning Policy (SEPP) for mining, which deals with greenhouse gas emissions.

Background

In 2019, the IPC refused an application made by KEPCO Bylong Australia Pty Ltd (KEPCO) for a state significant development approval to construct and operate a new open-cut coal mine known as the "Bylong Coal Project" in the Bylong Valley located northeast of Mudgee, NSW. The Project was expected to recover 121 million tonnes of coal over a period of up to 29 years.

One of the reasons for refusal of the Project by the IPC was that KEPCO's proposal had not minimised its Scope 3 emissions to the greatest extent possible. Like most coal mining projects, the majority (98%) of the estimated GHG emissions from the Project were "Scope 3", being those emissions from coal transportation and the combustion of the product coal, and were estimated to be 203 million tonnes of carbon dioxide-equivalent. KEPCO had proposed to develop an Energy and Greenhouse Gas Management Plan that would set out measures to minimise GHG Scope 1 and 2 emissions from the development; however it did not put forward measures for minimising Scope 3 emissions.

The Court of Appeal ultimately held that the IPC's view that KEPCO had not minimised Scope 1, 2 and 3 greenhouse gas emissions to the greatest extent practicable was "simply a finding of fact" that the Commission was entitled to make, not a misconstruction of clause 14(1).

For further background to this case, see our insights article on the NSW Court of Appeal case.

High Court rejects appeal on basis of insufficient prospects of success

KEPCO applied for leave to appeal to the High Court, and argued that the Court of Appeal should have found that the IPC was wrong to rely on clause 14 of the SEPP to consider the mine's scope 3 emissions, as well as to consider the state's climate change policy framework in its deliberations. In its submissions to the High Court, the company argued that the regulation of greenhouse gas emissions is "a matter of ever-increasing significance in obtaining development consent" and that the IPC's interpretation of clause 14 "is to treat that clause as a very substantial impediment to approval of further coal mining development in NSW".

A community group, the Bylong Valley Protection Alliance, represented by the Environmental Defenders Office, was also a party to the proceedings.

The High Court ultimately concluded that there was "no question of principle which would be in the interests of justice for this Court to consider" and that "an appeal to this Court would not enjoy sufficient prospects of success to warrant the grant of special leave to appeal".

This decision affirms the Court of Appeal's decision that the relevant consent authority can assess the adequacy of a company's proposed measures to minimise all greenhouse gas emissions, including scope 3, when deciding whether to grant consent for a mine or petroleum project.