During October 2022, on behalf of our client, Environment Victoria, we went to the Supreme Court against the EPA and three of Australia’s biggest energy companies.

This landmark case was the first test of Victoria’s key climate change legislation, the Climate Change Act 2017, and the first to challenge the regulation of air pollution from Victoria’s coal-burning power stations.

If the case were successful, it could lead to much stronger pollution limits on power stations and reduce the toxic health burden that coal-burning power stations have on our communities. It could also set vital legal precedents that have long-lasting impacts.

Coal-burning power stations are responsible for around 40 percent of Victoria’s carbon dioxide pollution, causing significant damage to our climate. They are also the biggest single source of the most toxic air pollution to human health, including sulfur dioxide, fine particles (PM2.5) and mercury.

A study in 2020 found that pollution from Victorian coal-burning power stations causes 205 premature deaths, 259 low birthweight babies, and 4,376 asthma cases in children each year. 

The three Latrobe Valley power stations are also by far the biggest emitters of mercury in Australia, releasing a combined 900kg of the most toxic heavy metal every year.

Despite these serious impacts, pollution limits on Victoria’s coal-burning power stations lag way behind most other countries including China, India and the US.  

In late 2017, the EPE began a review of the licences of the three power stations in the Latrobe Valley (Loy Yang A, Loy Yang B and Yallourn). This review took more than 1200 days, and involved consultiation with community and environment groups.

In March 2021, the Environment Protection Agency (EPA) decided to vary the licences of the three power stations. They set new varied conditions with no limits on greenhouse gas emissions and only modest new limits or tightened limits on other pollutants like sulfur dioxide, mercury and PM2.5. 

 

The case

On behalf of our client, Environment Victoria, we challenged the decisions the EPA made in March 2021 to change the licence conditions of three power stations in the Latrobe Valley in relation to air emissions. The case was a judicial review proceeding which asks the Court to review the decision-making process the EPA undertook to see if it complied with the law. Environment Victoria argued the law requires the EPA to consider a number of important matters, such as the potential impacts of climate change, in making its decision and that it failed to do so.

There were four Defendants: the EPA and the operators of the three power stations (AGL Loy Yang , Loy Yang B, and EnergyAustralia Yallourn).

 

Outcome Sought

Environment Victoria asked the Supreme Court to ‘quash’ (cancel) the EPA’s decision and require the EPA to re-make the decisions regarding air emissions limits (including climate emissions) in accordance with the law.

 

The argument

Our client is arguing that the EPA’s decisions in relation to air emissions fall short of what is legally required. We argue the EPA did not give proper, genuine and realistic consideration to matters which it was required to.

To assess whether the EPA properly considered certain matters the Court will look to the ‘statement of reasons’, a document prepared by the EPA that sets out its reasons for the decisions.

Broadly, Environment Victoria’s grounds as set out in the amended originating motion include as follows:

1. The EPA failed to properly consider principles of environment protection set out in Victoria’s environmental laws (in particular, the principle of intergenerational equity, the precautionary principle, the polluter pays principle, and the principle of integration of economic, social and environmental considerations)
2. The EPA failed to properly consider two matters as required under Victoria’s Climate Change Act:
   a) the potential contribution to greenhouse gas emissions of the decisions
   b) the potential impacts of climate change which are relevant to the decisions
3. The EPA failed to properly consider whether the licence changes were consistent with State Environment Protection Policy that required the power stations to pursue continuous improvement in their environmental management practices and environmental performance and apply best practice to the management of their emissions.
4. The EPA failed to properly consider the discussions and recommendations from the statutory (s 20B of the Environment Protection Act 1970) community conference process (the topics of which were informed by the community consultation).

Coal Pollution Case decisions

In a disappointing outcome for the Latrobe Valley community and our client Environment Victoria, in December 2022, Victoria’s Supreme Court upheld the EPA’s lax limits on climate emissions and pollution from coal-fired power stations.

It means the EPA’s decision to set no limits on greenhouse gas emissions, and extremely inadequate limits on toxic air pollutants, will continue to stand for now.

This outcome shows us Victoria’s climate and environmental laws aren’t currently working to protect communities, the climate, and our environment.

And while this ruling found the EPA hasn’t acted unlawfully, they’ve certainly failed the community that expects them to do their job and protect people’s health.

But it’s a setback, not a full stop. As lawyers, we know the big wins come only after countless little losses.

 

While the EPA’s original decision may continue to stand, the door remains open for it to step up and actually protect the health of people and the planet.

Communities deserve decision making that recognises the reality many are already facing: climate change is here and seriously impacting people’s health.

We need good laws and an EPA that properly regulates polluters and protects our environment and communities – which is why we’re working with our client Environment Victoria to consider the decision carefully and work out the next step in the fight for clean air.

Why this case was important

This was the first case to challenge regulation of air pollution in Victoria. The EPA is Victoria’s environment watchdog. They are supposed regulate polluters, and protect our communities and our environment from pollution. 

This case tested the scope of the EPA’s obligations in circumstances where the EPA has chosen to review the licences of polluting coal-fired power stations.

This was also the first case to test Victoria’s climate legislation, the Climate Change Act 2017. It  explored the scope of section 17 of the Climate Change Act which requires various government decision-makers to consider climate change when making certain prescribed decisions. This included consideration of the potential contribution to greenhouse gas emissions of the particular decision and also the potential impacts of climate change which are relevant to the particular decision.

Finally, the case provided a potential opportunity for the elaboration of principles of environment protection in the Victorian context including the principle of intergenerational equity, the precautionary principle, the polluter pays principle, and the principle of integration of economic, social and environmental considerations.