Newcastle Coal Infrastructure Group’s $922 million coal terminal was approved late last week and is expected to be operational within two years.

The panel recommended that NCIG establish a “compensatory mechanism” funded by the coal levy, called the Hunter Valley Ethical Coal Trust, to initiate sustainable development activities in the Hunter Valley that mitigate greenhouse gas emissions.

“It is an adaptive governance mechanism that brings community, industry and government bodies together to make the best of a small portion of the regional coal wealth in helping the people of the Hunter Valley innovatively prepare for the social, environmental and economic challenges of the future,” the recommendation said.

Department of Planning executive director of major project assessments Chris Wilson said that the levy proposal was beyond the scope of the individual project application.

“The department considers that this issue is beyond the scope of the current project application, and potentially beyond the scope of the planning system, and has therefore not recommended conditions of approval to give effect to this recommendation,” he said.

“Imposition of such a levy would place the operators of the NCIG facility at a distinct competitive disadvantage, compared to other facilities both within the Hunter and the state as a whole.”

In its report, the panel found that the overwhelming numbers of written submissions from the public were concerned with long-term climate change impacts at the global level.

“In relation to this comment, it should be noted that the department assesses all new coal mining proposals on their merits, including consideration of cumulative environmental and amenity impacts on the local area,” Wilson said.

“Conditions imposed on Hunter Valley mining operations include substantial conservation offsets and the requirement for extensive rehabilitation, which will deliver long-term benefits to the natural environment of the Hunter Valley.”

The department said it would separately address the other recommendations made in the report.