Risky business: landmark climate ruling warns Australia on fossil fuel production

In a landmark Advisory Opinion, the International Court of Justice has put countries like Australia on notice: the continued production of fossil fuels may constitute an internationally wrongful act.

The Court’s opinion was provided in the context of accepted science that the combustion of fossil fuels is the largest source of CO₂ and a major source of methane. The negative impacts of climate change will escalate with every additional fraction of global warming.^[1] 

The question posed by the UN General Assembly asked the Court to identify the legal obligations of States under international law to ‘ensure the protection of the climate system and other parts of the environment from anthropogenic emissions of greenhouse gases’. 

The Court took the view that the conduct of States relevant to its opinion includes not only actions that directly results in GHG emissions but ‘all actions or omissions of States which result in the climate system and other parts of the environment being adversely affected by anthropogenic GHG emissions.’^[2] This includes both consumption and production activities including activities such as ongoing production, licensing and subsidizing of fossil fuels.^[3] It also includes the actions of non-State actors (such as fossil fuel companies) within the jurisdiction or effective control of the State.^[4]

In the Court’s opinion, climate change treaties, customary international law and human rights law were among the sources of obligations to protect the climate system and other parts of the environment from anthropogenic (human-caused) GHG emissions.^[5] 

Customary international law obligations for preventing significant harm to the climate system and obligations under the Paris Agreement are particularly relevant to Australia and according to the Court both require duties of due diligence. 

States are required to take ‘precautionary measures’ which take account of science and rules and international standards.^[6] The standard of due diligence is stringent and a heightened degree of vigilance and prevention is required.^[7]

Even though climate change is a global, cumulative issue involving many different States or private actors and it can be difficult to apportion a specific share of responsibility to any State, this does not remove a State’s duty to prevent significant harm to the climate system.^[8] ‘States must assess the possible cumulative effects of their acts and the planned activities under their jurisdiction or control’.^[9] States must put in place regulatory mitigation mechanisms that are designed to achieve the deep, rapid, and sustained reductions of GHG emissions and regulate the conduct of public and private operators within their jurisdiction or control.^[10]

The Court interpreted the Paris Agreement and subsequent decisions of the Parties to mean there was an agreed primary temperature goal to limit global average temperature increase to 1.5^oC above pre-industrial levels. The Court was of the view that this temperature goal provides the context for the interpretation of mitigation obligations under the Agreement. Due diligence here requires the State to employ best efforts by using all the means at its disposal in the performance of that obligation.^[11] This may include putting in place a national system, including legislation, administrative procedures and an enforcement mechanism, and exercising adequate vigilance to make such a system function effectively.^[12]

The court concluded that the human right to a clean, healthy and sustainable environment is essential for the enjoyment of other human rights.^[13]

The Court's opinion made it clear that the obligations are not narrowly focussed on a State and its GHG emissions. The obligation is broader – to the protection of the climate system from significant harm resulting from those emissions. 

This means a failure of a State to fulfil its obligations can include a failure to address:

• fossil fuel production
• fossil fuel consumption
• approval of fossil fuel exploration licences provision of fossil fuel subsidies.^[14]

Australia’s direct GHG emissions contribute just 1.1% of global emissions. However, when emissions from Australia’s fossil fuel exports are included, its contribution rises significantly – to 4.5%. 

Australia is currently:

• the second-largest exporter of coal and gas in the world
• ranked second globally after Russia based on the lifecycle emissions from its fossil fuel exports
• continuing to approve new fossil fuel projects, with no limits on production. 

Most of Australia’s fossil fuel production is destined for export and the country has not restricted its fossil fuel production in line with the temperature goal of 1.5^oC.^[15] 

Given the Court’s opinion, Australia’s current policy settings could expose it to claims that it has failed to fulfil its international law obligations to protect the climate system from anthropogenic GHG emissions.

If found in breach, Australia could be required to provide: 

• restitution (for example, rebuilding infrastructure)
• restoration (such as repairing damaged ecosystems)
• compensation (monetary payments to States harmed by climate change)  ^[16] 

The decision has changed the international law context in which future climate litigation will occur. It will also influence the interpretation of human rights under domestic human rights acts. 

More broadly, the Court’s opinion has put at risk the viability of a ‘business as usual’ approach to fossil fuel production in Australia.

[1] International Court of Justice (ICJ), OBLIGATIONS OF STATES IN RESPECT OF CLIMATE CHANGE, Advisory Opinion, 23 July 2025. General List. No. 187, [81]-[83].

[2] Ibid, [94].

[3] Ibid, [94].

[4] Ibid, [95].

[5] Ibid, [115]-[161].

[6] Ibid, [136].

[7] Ibid, [138] and [254].

[8] Ibid, [279].

[9] Ibid, [276].

[10] Ibid, [282].

[11] Ibid, [229].

[12] Ibid, [253].

[13] Ibid, [393].

[14] Ibid, [427].

[15] For data supporting these statements, see: Australian Climate Accountability Project, 'Escalation: The destructive force of Australia’s fossil fuel exports on our climate', 12 August 2024.

[16] Above, n1, [450]-[454].