NSW EPA's proposed new prescriptive climate change mitigation requirements will mean big changes for high-emitting industries 

What you need to know 

• Public consultation on the NSW Environment Protection Authority's (EPA) proposed new prescriptive climate change mitigation requirements for high-emitting licensees is due to close on 7 October 2025. 
• The proposed reforms include the phasing in of new climate mitigation requirements into environmental protection licences (EPLs) for licensed facilities that emit more than 25,000 tonnes of CO₂-e (scope 1 and scope 2) per year. There will also be new reporting obligations for these licensees, including an obligation to report annual climate change emissions to the EPA as well as three-yearly Climate Change Mitigation and Adaptation Plans (CCMAP). The EPA will expect coal mine operators to meet prescriptive mitigation measures to address fugitive methane emissions and reduce emissions from diesel combustion.
• The proposed reforms represent a significant change to climate change mitigation practices for existing and new licensees in NSW and, importantly, impose more ambitious climate-related measures on licensees than is currently required under existing Federal climate-relate regimes and reporting frameworks.

What you need to do  

• The proposed reforms are likely to present challenges for licensees as they grapple to understand this new regulatory layer and how it fits alongside their existing regulatory and reporting frameworks (such as the Safeguard Mechanisms and the recently enacted mandatory climate-related financial disclosures regime).

• We encourage all organisations that may be affected by the proposed reforms to consider them in detail and consider making a submission to ensure the EPA is aware of their interests and concerns as they finalise the proposals. Submissions are due by 5 pm on Tuesday 7 October 2025.

Proposed reforms designed to help NSW meet its GHG emissions reductions targets 

The proposed reforms are being pursued by the EPA in an attempt to drive emissions reductions within NSW to ensure the State meets its greenhouse gas (GHG) emissions reduction targets as prescribed by the Climate Change (Net Zero Future) Act 2023 (NSW). Those targets are: 

• 50% reduction on 2005 levels by 2030;  

• 70% reduction on 2005 levels by 2035; and 

• net zero by 2050. 

The proposed reforms stem from the decision of the NSW Land and Environment Court (LEC) in Bushfire Survivors for Climate Action Inc v Environment Protection Authority [2021] NSWLEC 92 in which the LEC found the EPA has a duty under s 9(1)(a) of the Protection of the Environment Administration Act 1991, "to develop environmental quality objectives, guidelines and policies to ensure environment protection from climate change". The decision did not prescribe any detail about how the EPA should  discharge that duty, leaving it to the EPA's discretion (which we suggest would be governed by ordinary principles of administrative law, including procedural fairness and reasonableness).

Through these proposed reforms, the EPA is specifically targeting EPL licensees that emit more than 25,000 tonnes of CO₂-e of scope 1 and scope 2 per year. The EPA has said that although this equates to only approximately 10% of the EPA's licensees, this group of high emitters is responsible for around 50% of al NSW emissions.

Interestingly, NSW emissions reduction targets have for some time been more ambitious than Federal targets, and the proposed reforms suggested this gap would widen. However, on 18 September 2025, the Federal Government announced a new, more ambitious national emissions reduction target of 62-70% below 2005 levels by 2035 (compared to the current target of 47% below 2005 levels by 2030), closing this gap considerably. This announcement by the Federal Government is likely to further embolden the EPA in its Proposed Reforms as it indicates increased support at the Federal level for tougher climate change measures.  

Overview of the proposed reforms  

The proposed reforms compromise three parts: 

• the Climate Change Licensee Requirements which seek to phase in a number of new climate-related requirements to qualifying EPLs over the next few years (Proposed Climate Change Licensee Requirements, Consultation Date, July 2025);

• the CCMAP Requirements which set a requirement for operators of licensed premises that emit more than 25,000 tonnes of CO₂-e (scope 1 and 2) per year to prepare and publish CCMAPs (Climate Change Mitigation and Adaptation Plans: Proposed Mitigation Requirements, Consultation Draft, July 2025); and

• the Coal Mine Guide which sets out a number of prescriptive mitigation measures that the EPA expects coal mine operators that meet the prescribed emissions thresholds to implement (Proposed Greenhouse Gas Mitigation Guide for NSW Coal Mines, Consultation Draft, July 2025). 

Copies of the proposed reforms including the EPA's instructions as to how to have your say are available at this link.

Principal requirements from the proposed reforms 

The EPA is phasing in a number of new climate-related requirements to EPLs over the next few years. To begin with, this includes requirements for: 

• qualifying licensees to submit an annual climate change emissions report to the EPA detailing their emissions data from the most recently concluded financial year. For Safeguard Mechanism Facilities and coal mines that emit more than 25,000 tonnes CO₂-e (scope 1 and 2) per year, this requirement kicks in from 28 February 2026. For all other facilities that emit more than 25,000 tonnes CO₂-e (scope 1 and 2) per year, this requirement kicks in from 28 February 2027; and
• underground coal mines to carry out continuous monitoring for ventilation air methane from 31 October 2026. 

Qualifying licensees will also be required to prepare and publish CCMAPs. For Safeguard Mechanism Facilities and coal mines that emit more than 25,000 tonnes CO₂-e (scope 1 and 2) per year, the first CCMAP will be due 31 October 2026. For all other facilities that emit more than 25,000 tonnes CO₂-e (scope 1 and 2) per year, the first CCMAP will be due 31 October 2027.

A CCMAP must include reporting on actual scope 1 and scope 2 (and optionally scope 3) emissions, existing and planned mitigation measures to avoid or mitigate GHG emissions (as well as contingency plans), and long-term (to 2050) and interim scope 1 and 2 (and optionally scope 3) emissions goals. CCMAPs must be reviewed and updated every three years.

Alongside CCMAPs, qualifying licensees will also be required to submit 10-year emissions projections to the EPA every three years. The CCMAPs will need to explain any changes in those emissions projections.

The EPA has published a specific guide for the coal mining industry setting out a number of mitigation measures that the EPA expects operators of coal mines that exceed the applicable emissions thresholds to implement. The EPA expects to release similar guides for other high-emitting sectors in the future. The Coal Mine Guide includes requirements for:

• underground mines that will be active after July 2032 and which emit (or are likely to emit) more than 100,000 tonnes of CO₂-e/year (scope 1) to install ventilation air methane abatement on all mine shafts by July 2030;

• all mines that emit more than 25,000 tonnes of CO₂-e/year (scope 1) to progressively transition from fossil diesel to low carbon alternative fuel sources according to a prescribed timeframe (i.e. 5% of fuel used to be low carbon alternatives by July 2030, 10% by 2035 and 25% by July 2040);

• all mines that emit more than 25,000 tonnes of CO₂-e/year (scope 1) to ensure that 75% of large mining machinery and vehicles are zero emissions by July 2040 and 100% of large mining machinery and vehicles to be zero emissions by July 2050. 

The EPA is also considering new licence requirements to impose hard limits on GHG emissions as conditions of EPLs. This is expected to be a longer-term requirement, subject to emission measurement, sector-based GHG budgets and CCMAPs being in place.

Key insights: the proposed reforms mean more work for licensees  

The proposed reforms represent a significant change to climate change mitigation practices for existing licensees in NSW. No longer will compliance with the Federal regimes established under the National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act), the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (Cth) (Safeguard Mechanism) and individual development consents be sufficient. The EPA is expecting its highest emitting licensees to go beyond this.

Of course, these proposed reforms come at a time of increased climate-reporting more broadly. Corporates are gearing up for the newly mandated climate-related financial disclosures required by the Australian Accounting Standards Board's Australian Sustainability Reporting Standard AASB S2 Climate-related Disclosures 2024 (AASB S2). It goes without saying that all of these measures combined will mean a considerable amount of additional work for licensees.

We highlight below some key challenges and considerations that licensees should be alive to should these proposed reforms proceed as proposed:

• The proposed reforms are seeking to drive more ambitious emissions reductions than is mandated by the Federal regimes. Licensees will need to consider how their current emissions pathways align with these targets and the feasibility of maintaining operations going forward (both from a technical perspective and a costs perspective) if the new requirements come into effect.  
• Licensees may need to reconsider their mitigation strategies to ensure they are sufficient to meet the EPA's more ambitious requirements. For coal mines, this means considering how to adapt mitigation strategies to comply with the prescriptive mitigation measures set out in the Coal Mine Guide. Further, where offsets form part of a licensee's mitigation strategy, licensees should be aware that the EPA is requiring licensees to prioritise NSW based carbon offsets. This has potential ramifications for the price and supply of offsets. 
• There is considerable overlap between the proposed reforms, particularly the CCMAP Requirements, and existing reporting frameworks (e.g. the NGER Act, the Safeguard Mechanism and AASB S2). Licensees will need to take care to align their reporting across these different regimes, both from a substantive perspective and logistically. Any misalignment in reporting may give rise to inconsistencies or potential errors which in turn creates a compliance risk and an increased risk of public or third-party scrutiny and/or challenge. While the EPA has suggested licensees will be able to rely on reports prepared for other schemes to minimise duplication, this is only in so far as the other schemes are "comparable". This alone creates uncertainties. The EPA has tried to assist by providing a table setting out how and to what extent existing standards meet the CCMAP requirements, but we remain sceptical that this ability to rely on or cross-refer to other reports will deliver the efficiencies the EPA hopes.
• Licensees will need to make sure they have clear communication and reporting procedures in place (both internal and external) for the business to follow when making climate-related disclosures. It may be that different parts of the business are subject to different reporting requirements so these procedures should ensure appropriate internal lines of communication are maintained to achieve consistency of reporting externally. Given the increasing public interest in climate related reporting, particularly by high-emitting industries, any inconsistencies are at risk of being identified and weaponised against the reporting entity.
• Licensees should be cognisant to the sensitive nature of some of the information that the EPA is expecting to be reported or disclosed. Public disclosures of key project information such as emissions data, emissions projections and mitigate measures may expose a licensee to reputational risks. Other reporting obligations, such as the requirement to report on 10-year emissions projections, have the potential to inadvertently disclose business sensitive information such as future operational decisions. There is currently no exemption or discretion to allow licensees to withhold information that is considered commercially sensitive. All of this will need to be considered when seeking to satisfy any disclosure or reporting requirements.
• Licensees should be aware of the possibility that any information provided to the EPA may inform the EPA's future determinations of GHG emissions limits. The expectation is that these future GHG emission limits will be informed by comprehensive emissions monitoring across sectors, but it is possible that reporting on future emissions projections, GHG emission reduction goals, and other relevant reporting information could inform the EPA's thinking.  

What next? 

The proposed reforms seek to introduce new emissions reduction and reporting obligations as early as February 2026. We are almost at the end of Q3 2025, so this does not leave a lot of time for licensees to ready themselves for these new proposals should the EPA decide to proceed with them.

We recommend licensees follow the outcome of the public consultation closely and begin readying themselves for these proposed reforms to take effect.

There is still time (albeit not a lot) to have your say on the proposed reforms. We strongly encourage organisations that may be affected by the proposed reforms to consider them in detail and consider making a submission as part of the current public consultation process to ensure their interests are taken into account before the EPA finalises the proposals.

We are well placed to advise on the proposed reforms so please reach out to a member of the Planning, Access and Environment Team if you would like to know more about the proposed reforms or if we can be of any assistance should you wish to participate in the public consultation.  

Want to know more?

Proposed amendments to NSW environmental laws: a major number of minor amendments, 17 September 2025