Australia’s High Court has delivered a significant ruling in the country’s emerging climate litigation landscape, challenging how fossil fuel projects account for their full greenhouse gas emissions. In the case of MACH Energy v Denman Aberdeen Muswellbrook Scone Healthy Environment Group, the court held that the Independent Planning Commission did not adequately consider the full scope of emissions related to the proposed extension of the Mount Pleasant open-cut coal mine in New South Wales.

The decision, issued Wednesday, focused on the commission’s failure to properly address scope 3 emissions—those released indirectly when coal extracted from the mine is burned by consumers. These downstream emissions account for approximately 98% of the mine extension’s projected climate impact, which would increase annual coal production to 21 million tonnes and extend operations until 2048.

A majority of three judges ruled that scope 3 emissions must be included in environmental assessments and mitigation strategies, rejecting arguments that such emissions—often occurring overseas—should be excluded as “someone else’s problem.” Justice Gordon emphasized that the classification of emissions is merely an accounting tool and that all greenhouse gases have the same global impact regardless of where they are emitted. The court further clarified that international agreements like the Paris Agreement do not exempt local decision-makers from considering the full carbon footprint of fossil fuel projects within their jurisdictions.

While the ruling was narrowly divided, it establishes a legal precedent for how fossil fuel developments in New South Wales—and potentially across Australia—must account for their broader climate consequences. It requires decision-makers not only to assess these extensive emissions but also to consider imposing conditions aimed at mitigating them. Such conditions could include mandates for offset purchases, a potentially costly measure given carbon credit prices near A$38 per tonne and the estimated 860 million tonnes of emissions over the mine’s extended lifetime.

The case will return to the Land and Environment Court to determine whether the Mount Pleasant extension’s approval should be suspended or if specific conditions addressing scope 3 emissions should be imposed.

This ruling aligns Australia with precedent set by courts in the United Kingdom and Norway, where judicial bodies have increasingly recognized the obligation to consider emissions beyond project boundaries. It also reflects principles found in the International Court of Justice’s 2023 Advisory Opinion, which emphasized states’ responsibilities to assess the downstream impacts of fossil fuel projects under international climate commitments.

The decision comes at a time when Australia faces mounting international scrutiny over fossil fuel approvals, particularly from Pacific nations during pre-COP31 negotiations. It signals a crucial legal development that could influence not only the economics of coal and gas projects but also the strategies of environmental advocates seeking stronger climate accountability.

Climate litigation experts note that this ruling provides community groups with a clearer basis for challenging fossil fuel projects where full climate impacts, including scope 3 emissions, have not been properly evaluated, marking a notable advancement in the interplay between law and climate policy in Australia.