A HUNTER coal mine expansion is the first to be approved with a condition linking its coal exports to countries signed up to the Paris agreement on climate change.
The NSW Independent Planning Commission included the condition in its approval of the United Wambo joint venture coal mine expansion near Singleton despite significant opposition from the mining industry and strong criticism by NSW Deputy Premier John Barilaro and Hunter MP Joel Fitzgibbon.
The condition requires mine owners Glencore and Peabody to prepare an export management plan requiring it to use "all reasonable and feasible measures" to ensure coal is only exported to countries that are parties to the Paris agreement, or with similar policies to reduce greenhouse gas emissions.
The commission said the condition was necessary to ensure Scope 3 emissions - emissions produced in other countries from exported Australian coal - were minimised "to the greatest extent practicable".
The proposed condition led to Independent Planning Commission chair Professor Mary O'Kane having to defend the commission against Mr Barilaro's claims of "over-reach" and "judicial activism", and was both supported and criticised by environment groups.
In its decision to approve the mine expansion today, the commission gave Planning Secretary Jim Betts the discretion to decide an export management plan is no longer needed if "State or Federal legal mechanisms" make the condition superfluous.
In a very public intervention following the mining industry backlash Mr Betts made a submission to the commission saying the condition could result in "significant implications for the NSW and Australian economy".
He advised Tony Pearson, the chair of the IPC panel considering the Singleton mine expansion, that it was "not this state government's policy that greenhouse gas policies, or planning conditions, should seek to regulate, directly or indirectly, matters of international trade".
Glencore and Peabody said the most likely countries to take United Wambo coal - Japan, China, South Korea, Taiwan, India, Malaysia, the Philippines and Vietnam - were already Paris Agreement signatories. It argued against any linking of the mine with emissions from exported coal burnt in another country, as proposed by environment groups.
"It is both appropriate and consistent with the overarching international climate change framework for... emissions to be accounted for, regulated and reported by the respective countries that are ultimately responsible for the combustion or use of the project's coal once it is exported from Australia," Glencore and Peabody said.
The commission proposed the condition in response to NSW Land and Environment Court Chief Justice Brian Preston's landmark ruling in the Gloucester Rocky Hill mine case, which was the first NSW coal mine refusal to include a consideration of greenhouse gas emissions.
Justice Preston accepted arguments from climate change experts including Professor Will Steffen that it was the wrong time to expand coal mining because if the Paris Agreement targets are to be met most of the world's existing fossil fuel reserves should be left in the ground, unburned.
The United Wambo joint venture project approval will allow Glencore and Peabody to extend operations and remove up to 10 million tonnes of coal per year from deeper seams over a 23-year period.
The project will provide jobs for 500 workers and raise $369 million in royalties, the companies said.
Glencore and Peabody said there was continuing demand for high quality coal.
"The project is well positioned to contribute to meeting this expected demand in the short to medium term and will maximise coal recovery from within the existing mining areas, whilst optimising the use of existing infrastructure and minimising the environmental impact associated with meeting this demand," the companies said.
The decision comes a day after NSW Labor leader Jodi McKay said coal would remain a "significant contributor" to the Hunter and state economies.