EPBC Act reform: an overdue overhaul

The EPR Bill contains a framework for the Minister to make, vary and revoke National environmental standards (NES), which will be binding upon decision-makers under certain sections of the EPBC Act. The EPR Bill initially required that these decisions ‘not be inconsistent with’ a relevant NES, however, the amendments secured by the Greens in the Senate have seen this standard lifted so that decisions must more positively ‘be consistent with’ its corresponding NES.^[2]While the distinction may sound like semantics, we consider the test of consistency will be a higher bar. 

Examples of decisions that are required to be consistent with the NES include:

• approving the taking of an action under the EPBC Act, or 
• revoking, varying or adding conditions to an approval. 

The applicable NES for each of these decisions is set out in the regulations.

The NES must provide outcomes or objectives, and may also include parameters, principles, processes or actions for achieving the outcomes or objectives. These standards are designed to ensure quality and consistency in environmental approvals, and hopefully to also provide greater certainty for proponents and industry. 

The Minister must ensure that any NES are consistent with relevant international agreements and uphold the objectives of the EPBC Act. Any variation or revocation of a NES cannot lessen the level of environmental protection prescribed by that standard, ensuring a baseline of regulatory certainty for business planning and investment decisions.

The introduction of the NES is one of the centrepieces of the reform and a key recommendation of the Samuel review. However, the NES are not included in the EPR Bill and are still under development by the Government. 

The Government has released two draft NES for community consultation: 

• the Environmental Offsets Standard, and
• the MNES Standard. 

Public consultation on these standards is open until 30 January 2026.

The objective of the Offsets Standard is to provide a framework where offsets adequately compensate for residual significant impacts to contribute to the protection and enhancement of protected matters. As proponents must demonstrate that offsets deliver a measurable net gain to the affected protected matter, rather than just avoiding net loss, this will increase the threshold for project approvals. There are 8 principles that must be satisfied that include the timing, delivery and form of offsets.

The MNES Standard sets out the objectives, outcomes, and principles for protecting and managing MNES, including:

• threatened species,
• ecological communities,
• wetlands,
• heritage places, and
• marine areas.

 It applies to all actions requiring approval under the EPBC Act.

It sets specific objectives for each category of protected matter under the EPBC Act. For example, for Ramsar wetlands, the objectives include that the ecological character of a declared Ramsar wetland must be maintained, protected, conserved and (where it is in decline) restored. 

Until more NES are released and finalised following community consultation, it is difficult to determine how effective they will be and how they will be applied in practice to decisions to ensure consistency. 

Previously, the EPBC Act allowed the Minister to declare a project as having ‘unacceptable impact’, but the term was undefined and based solely on Ministerial discretion. That has now changed. 

The EPBC Act introduces a legally defined test for unacceptable impacts, included in Part 3 of the Act. This means: 

• all project approvals must now consider whether a proposal involves unacceptable impacts, and 

• if such impact is found, approval cannot be granted. 

   

A variable definition based on the MNES involved

The new definition for ’unacceptable impacts’ varies depending upon the MNES that it applies to and is now set out in the proposed section 527F of the EPBC Act.  

For example:

• Ramsar wetlands: An unacceptable impact is a significant impact that either:
  • seriously impairs, will seriously impair, or is likely to seriously impair, the ecological character of a declared Ramsar wetland, or
  • undermines (or will or is likely to undermine) the ability of the declared Ramsar wetland to continue to meet the criteria for which it was listed under the Ramsar Convention.
• Threatened species: The definition of unacceptable impact will depend on the category of species. For species listed as threatened in the critically endangered, endangered, or vulnerable category, a significant impact includes:
  • seriously impairs, will seriously impair, or is likely to seriously impair, the viability of the listed threatened species, or
  • causes, will cause, or is likely to cause, serious damage to critical habitat of the listed threatened species where the habitat is irreplaceable and necessary for the listed threatened species to remain viable in the wild. 

Where a project is considered to have unacceptable impacts, these cannot be offset, and the project must be refused or redesigned to avoid or mitigate the impacts to below the threshold before approval can be reconsidered. 

A recent example: Victorian Renewable Energy Terminal

A recent case is the Victorian Renewable Energy Terminal project. In 2023, the Minister declared the original proposal had clearly unacceptable impacts on the Westernport RAMSAR wetlands.  

Following the 2023 Referral, the Port of Hastings Corporation lodged a new Referral under the EPBC Act in early 2025, alongside additional detailed technical studies, preliminary impact assessments and significant design refinements. The second referral application received a ‘controlled action’ decision, allowing a pathway forward for assessment and approval of the project.

The Samuel Review was critical of the implementation of environmental offsets under the EPBC Act, finding the policy to be ineffective and inconsistently applied. In response, the EPR Bill mandates that all ‘residual significant impacts’ on nationally protected matters be compensated to a ‘net gain’ standard, however, there is no definition of this term yet and we expect that guidelines will need to be developed. 

A residual significant impact of an action is defined as a significant impact that will not be avoided, mitigated or repaired. The EPR Bill does not provide a definition for ‘net gain’, so it difficult to ascertain the extent that the reform will alter the current offset policy under the EPBC Act. Compensation can be achieved by proponents either delivering their own environmental offsets or by paying a restoration contribution charge to the Commonwealth. 

The quantum of compensation is proposed to be set out in Regulations (which are not yet available), however, if there are no regulations set then compensation requirements will be decided by the Minister. By legislating compensation requirements, the intention is to provide clarity on compensation obligations upfront and consistency across projects. Proponents should monitor the compensation requirements once published, and factor these into project feasibility and budgeting.

In most cases, for a project to be approved under the EPBC Act it must satisfy or pass each of the three requirements discussed above, meaning they must:

• be consistent with the NES,

• not be likely to have unacceptable impacts, and

• offset residual impacts by providing compensation to a net gain standard.

There is exception is for ‘national interest proposals’ at the new subsection 136B(2) of the EPBC Act, which allows for Ministerial discretion to override these requirements. While projects will still undergo environmental impact assessments and be subject to ongoing compliance and enforcement, they are not required to satisfy these three new requirements of the EPBC Act. 

As noted above, fossil fuel projects are excluded from this exception following the deal with the Greens to pass the amendments to insert subsection 146P(1A) which states that ‘the Minister must not determine that a specified action is excluded if that action is a fossil fuel action’.

In determining Australia's national interest, the Minister may consider Australia's defence, security or strategic interests, or Australia's obligations under an agreement with one or more other countries. The current reform creates a much broader power than was envisioned in the Samuel Review, which recommended that this discretionary power only be extraordinary and rare circumstances.

The environment Minister, Murray Watt, has stated that the power was designed for projects linked to defence, security or national emergencies, however, the vague and undefined nature of the term ‘strategic interests’ leaves the door wide open to the political interests of the government of the day.

It is also unclear why, where a ‘national interest proposal’ is inconsistent with the NES and produces unacceptable impacts, it should not still be subject to the net gain compensation requirements. This would allow the project to go ahead but be subject to the same compensation requirements as all other projects under the EPBC Act.

The NEPA Bill establishes a National Environmental Protection Agency (NEPA), a new independent regulator with expanded compliance and enforcement powers. This includes the ability to appoint independent auditors and require audits of project compliance without notice to either approval holders, or any persons subject to an environment protection order (EPO), a conservation order, a remediation determination, or a remediation order.

NEPA will have an independent CEO who is required to maintain a register of ‘registrable decisions’ and will have the power to impose higher penalties and utilise a range of new enforcement tools, such as EPOs. These can be used in circumstances where there is an imminent risk of serious damage to the environment under the EPBC Act and can require work to stop on a project. The reforms have also significantly increased the maximum penalties that can be imposed under the EPBC Act.

While the Samuel Review did not specifically recommend the introduction of NEPA, it found that the current compliance and enforcement powers under the EPBC Act were ineffective due to underuse and insufficient penalties. The creation of this new enforcement agency is broadly in keeping with the recommendations of the Samuel Review. While the CEO can make recommendations to the Minister regarding regulation, they are not a decision maker under the EPBC Act. Therefore, the Minister will remain responsible for the environmental impact assessment and approval of projects.

The Samuel Review found that the EPBC Act assessment and approval processes were unnecessarily complex, with multiple assessment pathways for individual project assessments not resulting in any additional environmental benefit or being fully utilised in practice.

In response, the EPR Bill proposes to repeal three of the existing assessment pathways in Part 8 of the EPBC Act: 

• Division 3A (assessment on referral information only), 

• Division 4 (assessment on preliminary documentation), and 

• Division 5 (assessment by public environment report). 

These three pathways will be replaced by a new Division 5A, which will contain one streamlined assessment process which the Government claims will reduce approval timeframes. The remaining other pathways for assessment are the accredited assessment process, environmental impact statement or public inquiry. 

The Minister may only decide to assess a project through the streamlined pathway if: 

• under the  new s87(5), the Minister is satisfied that the approach will allow the Minister to make an informed decision and where greenhouse gas emissions information has been provided by the proponent; or

• under the new section 87(5A) (added as part of negotiations with the Greens), the action is not a fossil fuel action (meaning that these actions must be assessed through the standard pathways). 

The Minister’s decision under  the streamlined pathway will be based on: 

• the Referral, 

• any responses to requests for further information, and 

• a recommendation report be prepared by the NEPA for the Minister. 

The report must include recommendations on whether the action should be approved under Part 9 for each controlling provision, and any recommended conditions to be attached to the approval.

Under the amended s130, f the EPBC Act, the Minister must make a final decision on approval within 30 business days of determining that the streamlined process applies. 

The EPR Bill also seeks to provide clarity about the post approval decision making requirements by inserting a new subsection 143(2A) in the EPBC Act. This provides criteria that the Minister must consider when making decisions regarding revocation and surrender of conditions.

Transitional provisions ensure that projects already in the system can continue under the previous pathways.  

As part of their agreement to support the reforms through the Senate, the Greens negotiated the introduction of items 115A–115F into the EPR Bill, which introduce a sunset day of 12 months after 1 July 2026, after which Part 3 of the EPBC Act will apply to any RFA forestry operation. 

This provision ends the exemption of RFA forestry operations from Part 3 of the EPBC Act, which are primarily monitored under state frameworks without any additional Commonwealth referral or approval requirements. However, existing RFA operations completed before sunset day will remain exempt from the requirements of the EPBC Act under the new legislation.

Under the reformed EPBC Act, state and territory impact assessment processes can only be accredited if they meet the new NES. Accreditation requires a bilateral agreement between the Governments, and the relevant state or territory framework must be shown to be consistent with the NES, pass the net gain test and not have any unacceptable impacts. 

Where assessment processes are not consistent, the Minster can suspend, vary or revoke an existing accreditation under proposed section 35. If this occurs, the Minister must first:

• consult with the state or territory,  

• provide written reasons, and 

• publish the decision. 

Where an assessment process is revoked, suspended or varied, actions that have commenced prior to this occurring may continue under proposed section 35B, but new actions will require separate EPBC Act approval.

Bilateral agreement accreditation of state and territory assessment processes have been in place for some time now and they have avoided duplication between the Commonwealth and states and territories. The reforms are intended to make bilaterial agreements more ‘durable’, meaning that accreditation will continue even when there are statutory changes to the state or territory’s assessment process. It is unclear how this relates to the suspension power – presumably, if a state or territory changes their process such that it no longer meets the NES, then the Minister could suspend the bilateral agreement. 

A new regime for bioregional planning is proposed to be developed, allowing regions to be mapped into both development and conservation zones. Actions in development zones may proceed with registration and will require further EPBC Act approval, while actions in conservation zones will generally be prohibited (unless an exemption applies). This is intended to provide more clarity to for proponents at an early stage of project planning and to allow for more informed decisions regarding site selection. 

The EPR Bill only creates the mechanism for the plans to be taken into consideration by the Minister but does not yet include the plans themselves. At this stage, the Government has not provided any information regarding what areas will be included in either development or conservation zones, but in creating these zones regard must be had to:

• World Heritage property, 

• a National Heritage place, 

• a declared Ramsar wetland, 

• a Commonwealth marine area, 

• the Great Barrier Reef Marine Park, and 

• any listed species, pursuant to proposed section 177AJ.

The reforms codify the involvement of First Nations people in environmental governance through the establishment of a new Indigenous Advisory Committee, that will have a role in consultation on the NES and advise on the incorporation of cultural knowledge into species and community listings. 

The Government has indicated that a separate NES for First Nations consultation will be released in time, however, there is currently no information on what that might look like.

While the EPR Bill does not include a climate trigger for referral of projects that hit particular climate impact thresholds, it does include a new application requirement in the EPBC Act for proponents to provide information about their Scope 1 and 2 greenhouse gas emissions. Proponents must also outlined proposed mitigation measures and abatement targets as part of the assessment process. 

Although the information provided does not directly link to the decision-making criteria and cannot be a ground for refusing an approval, there is no doubt the information will be used to assist the Government to assess the impact of a project on its climate targets. It Is also expected to have strong influence on stakeholder engagement.

The EPR Bill introduces several changes intended to improve the efficiency of conservation planning and heritage management. These include:

• streamlining heritage listing and assessment processes, 

• allowing for more flexible and regionally tailored recovery and threat abatement plans, and

• introducing a consistent definition of ‘critical habitat’. 

Part 3 of Schedule 1 of the EPR Bill sets out detailed transitional arrangements to ensure that projects already in the system are not unduly disrupted. The provisions also confirm that the new requirements apply prospectively, not retrospectively. 

Proponents should seek specific advice to understand how these changes may affect both current and future projects.