Coal power plant litigation: the first test of Victoria’s Climate Change Act 2017

19 October 2021


Environment Victoria (Plaintiff) has commenced litigation in the Supreme Court of Victoria challenging amendments made to the operating licences (Licences) of three Victorian coal-fired power plants.

The Plaintiff, an environmental charity, alleges that the amendments made by the Environment Protection Authority (EPA) fail to adequately reduce the greenhouse gas emissions and broader air pollution permitted under the Licences.

Environment Victoria claims that this is contrary to the Climate Change Act 2017 (Vic) (Climate Change Act) and the Environment Protection Act 1970 (Vic) (1970 EP Act), and accordingly seeks judicial review of the EPA’s decision. Importantly, this litigation represents the first test of the Climate Change Act.

The review

The coal-fired power plants that hold the permits in question are the Loy Yang A (owned by AGL), the Loy Yang B (operated by Alinta Energy), and the Yallourn (owned by EnergyAustralia). The plants are the three remaining coal-fired power plants in Victoria and collectively release 40% of Victoria’s greenhouse gas emissions. All are located in Gippsland’s Latrobe Valley.

The EPA commenced its review of the Licences in 2017 as part of its regular five-year licence review.

The decision to amend the licences

Following the completion of the review in March 2021, the EPA made changes to the permissible quantity of overall air emissions under the Licences, among other changes. However, no direct limits were placed on greenhouse gas emissions. Rather, the EPA stated that the reduced emissions limits would ‘cap greenhouse gas emission to approximately current levels’.

Judicial review sought by Environment Victoria

On 16 September 2021, Environmental Justice Victoria, acting on behalf of Environment Victoria, commenced proceedings seeking judicial review of the decision to amend the Licences (Decision).

In public comments, Environment Victoria criticised the EPA’s Decision as failing to place limits on greenhouse gases and doing very little about toxic air pollution emitted by the power plants.

The action is made against both the EPA and the operators of the three power plants.

The Plaintiff alleges that the Decision is invalid because the EPA failed to consider provisions of the 1970 EP Act and the Climate Change Act, including:

  1. Principles of Environmental Protection

Per section 1A of the 1970 EP Act, the EPA was required to have regard to the principles of environmental protection set out in the 1970 EP Act.

  1. Effect on Climate Change and Greenhouse Gas Emissions

Under section 17(2) of the Climate Change Act, the EPA was obliged to consider the effect on climate change and greenhouse gas emissions when amending the Licences.

  1. State Environment Protection Policy

The Plaintiff alleges that, per section 20C of the 1970 EP Act, the EPA was required to make its Decision in accordance with ‘relevant State environment protection policy’.

The relevant policy in question, clause 18 of the State Environment Protection Policy (Air Quality Management), provides that generators of emissions must manage their emissions in accordance with the principle of environmental protection, and ‘apply best practice’ to the emissions management.

On the basis of the EPA’s purported failure to take into account these laws and regulations, Environment Victoria has asked the Court to nullify the Decision and require the EPA to make the decision again.

Broader importance of the litigation

Beyond the impact on the parties themselves, the potential effect of this case on broader environmental litigation is substantial.

As noted above, this litigation represents the first opportunity for the courts to consider the Climate Change Act. The Court’s interpretation of the Act may prove important in determining the degree to which decision-makers must consider climate change when making decisions relevant to the environment. This, in turn, will foreseeably have two consequences.

First, it may ultimately affect the future environmental decisions made by relevant decision-makers. We may therefore see the emergence of more or less environmentally conscious policy from the State government.

Second, and perhaps more importantly, the Court’s interpretation may influence the use of the Climate Change Act in future Victorian climate change litigation. Indeed, it is foreseeable that a broad interpretation of the Climate Change Act would catalyse the use of the Act as a powerful tool in future efforts to challenge governmental environmental decision-making.

This article was written by James Lofting, Partner and Timothy White, Law Graduate.

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