The judgement was made after an action by environmental group Hunter Environment Lobby that argued the Ulan mine would create scope 1, 2 and 3 emissions, despite the project receiving government approval to double production and extend the mine’s life to 2031.

“The ‘in principle’ decision to impose a condition requiring a single mining proposal to offset scope 1 greenhouse gas emissions has significant implications for future mining proposals in New South Wales,” the department said.

“It may also affect other new proposals where scope 1 greenhouse gas emissions will be produced.

“The judgement raises many questions about the relationship between individual project approval processes and state and federal laws and policies regulating greenhouse gas emissions, in particular the carbon tax.”

The department’s view is these issues are more appropriately addressed at a broader policy level and individual project approval decisions are made within the context of that policy.

“The court has not yet finalised details of the condition and how it is to be implemented,” it said.

“The department will be advising government on a response once the court has issued its final orders.”