A NSW green group, the Hunter Environment Lobby, has lost its bid to force a coalmine to offset greenhouse gas emissions that fall below the level covered by the carbon tax.
In the first case of its kind, the NSW Land and Environment Court indicated last November that the expansion of the open-cut Ulan coalmine near Mudgee might be granted only if it offset its direct emissions.
But the court case was complicated when the federal government unveiled its carbon tax, due to come into effect in July.
Justice Nicola Pain said she wanted to hear submissions on how a NSW-imposed condition could work alongside the federal government’s Clean Energy Act before she made her final judgment.
This week Justice Pain decided that further conditions were “unnecessary”.
In her ruling, Justice Pain said she was “satisfied that the scheme as represented in the CE Act, together with related legislation” was sufficient to ensure emissions were offset.
Once it expands, the Ulan coalmine – a joint venture between Xstrata Coal and Mitsubishi Development – is expected to pump out about 575 million tonnes of carbon dioxide over its 20-year lifespan, according to a submission by the Environmental Defender’s Office.
Of this, direct emissions – or scope one emissions – are expected to produce an average of more than 100,000 tonnes of carbon dioxide a year, sustainability consultant David Blyth told the court.
Senior solicitor Natasha Hammond-Deakin from the NSW Environmental Defender’s Office, representing the Hunter Environment Lobby, said Tuesday’s decision meant Ulan could potentially pump out thousands of tonnes of emissions for free.
“Even though the bulk of the scope 1 greenhouse gas emissions from the Ulan project are the type of emissions that are regulated by the Clean Energy Act, in the years that Ulan emits below 25,000 tonnes of GHG emissions they won’t be liable to pay,” Ms Hammond-Deakin told AAP on Wednesday.
“And that is where we said our client’s conditions should step in to fill the gap.”
About four per cent of the mine’s scope 1 emissions during its lifetime are now set to be released without being offset.
Justice Pain described the figure as “de minimis”.
But Ms Hammond-Deakin said the carbon tax should not be seen as a blanket solution.
“Our view still is that it is not de minimis given the numbers,” she said.
“Just because we have a carbon tax that isn’t necessarily the complete answer.
“There needs to be a suite of measures in place to regulate emissions.”
Despite the result, she said the court’s initial indication that scope 1 emissions would need to be offset had still set a precedent which could be “helpful in other situations or contexts in the future”.
“If suddenly we didn’t have a carbon tax in the future that could be such a situation,” she said.
The Hunter Environment Lobby is considering its options as to a possible appeal, Ms Hammond-Deakin said.
Xstrata Coal NSW’s chief operating officer, Ian Cribb, said Ulan would now push ahead with the project.
“The court’s decision not to require carbon offsets for an individual project was appropriate because it would have unfairly prejudiced one mine within the industry when such issues should be driven by national, or preferably international, policy,” Mr Cribb said in a statement.