Australian Conservation Group Challenges EPA's Decision to Renew Coal-Fired Power Stations' Licences

Jones Day

Proceedings filed by public interest group Environment Victoria represent the first climate change litigation in Australia to challenge the licence to operate of coal-fired energy producers.

A public interest group has filed proceedings in the Supreme Court of Victoria seeking judicial review of a decision of the State's Environment Protection Authority ("EPA") to renew the operating licences of Victoria's last three remaining coal-fired power stations (the "Licences"). The action commenced by Environment Victoria also names the three operators of the power stations—EnergyAustralia, AGL Energy and Alinta Energy—as defendants. The case is an example of public interest litigation where the plaintiff, Environment Victoria, is a not-for-profit group, and will need to establish standing on the basis that it has a 'special interest' in the subject of the EPA's decision.

This is the first litigation to test provisions of the Climate Change Act 2017 (Vic) ("Climate Change Act") which require Victorian government authorities, including the EPA, to consider climate change and contributions to greenhouse gas emissions when making planning approval and licensing decisions. 

The plaintiff claims that the EPA's decision to renew the Licences should be quashed or made again according to law, because the EPA failed to exercise its powers in accordance with the requirements of both the Climate Change Act and Environment Protection Act 1970 (Vic). This includes an alleged failure to give genuine consideration to the submissions and expert reports concerning emissions and air quality modelling that Environment Victoria and others opposed to the renewal of the Licences put before the EPA during an extensive review process that was undertaken over 1,200 days. 

Environment Victoria contends that the EPA's failure to impose new conditions requiring the use of technologies that reduce toxic pollution or a reduction in annual emissions evidence the EPA's failure to adequately account for environmental considerations.

These proceedings constitute the first challenge to any Australian State or Territory's regulation of air pollution from coal-fired power stations. They form part of a growing wave of climate-related litigation in Australia, including the recent decisions in Sharma v Minister for the Environment and Bush Fire Survivors for Climate Action v EPA, which both highlight a trend towards Australian courts affirming the obligation of government authorities to consider climate change when assessing the environmental impacts of energy and resources projects and other commercial undertakings. Businesses in the fossil fuel industry should be cautious of this growing litigation and regulatory risk and the impact it may have on the renewal of existing licences, or the granting of new licences. 

We will continue to monitor the proceedings and provide updates in future client publications.

DISCLAIMER: Because of the generality of this update, the information provided herein may not be applicable in all situations and should not be acted upon without specific legal advice based on particular situations.

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