Australia consults further on EPBC Act reforms

The government passed the EPBC Act reforms in November 2025. While some of the reforms took effect immediately, others are being introduced in a staged process.

Tranche 1 of the recently enacted reforms to the EPBC Act commenced on 20 February, with all remaining reforms due to commence on or before 1 December 2026.

As part of the federal budget announced earlier this week the government revealed it would embark on making landmark reforms to the EPBC Act to "fast-track approvals for businesses, while better protecting the environment for future generations." This forms part of the government's broader efforts to reduce regulatory burden by A$10.2 billion (approx. US$7.37bn) per year, including the memorandum of understanding recently signed between the federal and Western Australian governments to develop and implement an assessment bilateral agreement.

The government has also released three new consultation papers confirming a number of other reforms that are expected to commence on 1 July 2026. It is also consulting on proposed updates to the draft National Environmental Standard for Matters of National Environmental Significance (MNES standard); and the draft National Environmental Standard for Environmental Offsets (Offsets standard).

The window for public comment is particularly narrow. The consultation closes on 21 May, while the separate consultations on the draft updated MNES standard and draft Offsets standard close on 29 May and 9 June respectively. We outline below further details on the proposed reforms to help businesses and individuals understand how the changes may affect their projects and inform them ahead of participating in the consultation process.

National EPA and increased penalties

The government is proposing to both establish the National Environmental Protection Agency (EPA) and commence the increased penalties applying under the EPBC Act with effect on 1 July 2026.

The National EPA will be responsible for compliance and enforcement, environmental permits and licences, as well as monitoring and reviewing accreditation instruments, bilateral agreements and bioregional plans.

In particular, the National EPA will:

• have a discretion as to the most appropriate enforcement response, including whether to implement criminal prosecutions or seek a civil penalty, based on the severity and circumstances of the breach;
• have the power to issue environment protection orders – effectively ‘stop work’ orders where there is an imminent risk of serious environmental damage, or it is necessary to ensure compliance or manage damage;
• have responsibility for regulating the new environmental audit arrangements, such as establishing a register of auditors and the requirements associated with auditor registration; and
• be required to publish ‘registerable decisions’ and ‘prescribed matters’ on the National EPA register such as the issue, variation or revocation of a condition of a permit or environmental protection order under the EPBC Act, Federal Court convictions, injunctions, civil penalty orders and remediation orders. Where appropriate, the information required to be published will include the entity to which the decision relates. Developers should be aware that key regulatory decisions and enforcement outcomes affecting their projects will be publicly and easily accessible under this framework.

It is also proposed that the increased maximum civil and criminal penalties for contraventions of the EPBC Act will commence on 1 July 2026.

In particular, the maximum civil penalty will be increased to the greater of:

• around A$1.65 million for an individual and A$16.5 million for a corporate body;
• three times the sum of the benefit derived or the detriment avoided; or
• for corporate bodies only, 10% of annual turnover for the 12-month period or approximately $825 million, whichever is less.

For individuals, the maximum criminal penalties, including for significantly impacting a protected matter without approval or breaching a condition of and EPBC Act approval, will be increased to approximately A$330,000.

‘Unacceptable impact’ provisions timing

The EPBC Act reforms introduced new criteria of what is considered to be ‘unacceptable impacts’ for each matter protected by the EPBC Act.

While these provisions will not apply to any decision made by the minister on whether to approve a project or strategic assessment under the new laws until later this year, the definitions are proposed to commence from 1 July 2026 to support bilateral and accredited agreement negotiations with the states and territories and the making of any protection statements.

New approval regime for minor or preparatory works

From 1 July 2026, proponents will be able to seek ministerial consent to undertake minor or preparatory works while an action which has been referred under the EPBC Act is still under assessment.

This is an important issue. Unless consent is obtained for preparatory works or the referral expressly excludes preparatory works, or is formally varied under the EPBC Act to exclude preparatory works, it is an offence to carry out any part of an action which has been referred under the EPBC Act while the referral is pending.

The draft regulations provide more details of the approval process that must be followed for minor or preparatory works. These confirm that applications must contain a description of the proposed works and the larger action, and confirmation of why the works need to be carried out prior to assessment and approval of the larger action; as well as details of why the works are considered to be minor or preparatory, and the outcomes of any consultation undertaken.

They also require the minister to determine the application within 20 days of receiving ‘suitable’ information in the application and confirm that, before granting approval, the minister must be satisfied that:

• the works are a minor or preparatory component of a larger action that the minister has decided is a controlled action;
• the works are minor and repairable to matters protected under part 3 of the EPBC Act; and
• it is appropriate for the works to be undertaken before the larger action has been assessed and approved.

The proposed requirement for applications to be determined within 20 days is welcome given the intent of enabling proponents to fast-track minor or preparatory works. However, as currently drafted, the level of discretion as to what constitutes “suitable information” could potentially require a high level of assessment, which may lead to approval delays.

New protection statements and rulings

The reforms to the EPBC Act enable the minister to make protection statements clarifying the specific matters to be considered in determining whether to approve actions affecting listed, threatened species or ecological communities.

They also empower the minister or the CEO of the National EPA to issue rulings which bind decision-makers under the EPBC Act and provide further guidance on how the EPBC Act should be applied in specific situations.

To allow for the commencement of the full suite of reforms in December 2026, the government proposes including further details on how protection statements and rulings are to be made in the EPBC Act regulations and to commence the regime for implementing these on 1 July 2026.

However, it is worth noting that any new protection statements will not take effect until the full suite of EPBC reforms have commenced, either on or before 1 December 2026.

Reconsideration decisions

The key reforms regarding applications for a reconsideration of a decision as to whether a project is, or is not, controlled action under the EPBC Act will also commence on 1 July. This will include the introduction of new regulations that give effect to the information that must be included in a reconsideration request, and a 28 business day time limit on submitting reconsideration requests. The time limit starts the day after the minister publishes notice of the first decision.

Lapsing of ‘not controlled action’ decisions

Any decisions made by the minister after 1 July 2026 that an action is ‘not a controlled action’ or ‘not a controlled action if taken in a particular manner’ will lapse after five years if the action has not substantially commenced.  Proponents may request an extension of up to ten years from the original decision date, subject to ministerial approval. 

The regulations outline the information that should be included in an extension application, including:

• the reason for the delay;
• the proposed extended lapsing date;
• ‘suitable’ evidence that steps are being taken to substantially commence the action; and
• a timeline of activities proposed to be undertaken to substantially commence the action.

The lapsing provisions will not affect decisions made prior to 1 July 2026.

Bilateral agreements

The reforms propose bringing forward the commencement of all bilateral agreement provisions to 1 July 2026. The EPBC Act requires that existing bilateral agreements regarding federal and state planning and approval processes be updated to incorporate three new approval tests: compliance with new standards; ‘unacceptable criteria’; and the ‘net gain test’.

The regulations propose to extend the list of matters that must be incorporated into bilateral agreements to also require consistency with the five National Environmental Standards: the MNES standard; the Offsets standard; the Community Engagement standard; the First Nations Engagement standard; and the Data and Information standard. 

The regulations also require the minister to consider bioregional plans and bioregional guidance plans when accrediting a management or authorisation framework for the purposes of a bilateral agreement.

This could cause delays in finalising the updated bilateral agreements and therefore prevent developers from utilising the efficiencies of the bilateral agreements.

Greenhouse gas reporting

The EPBC Act requires projects exceeding the greenhouse gas emissions threshold to disclose a “reasonable estimate” of scope 1 and scope 2 greenhouse gas emissions from their proposal, along with strategies and measures for managing these emissions. 

The regulations will set this threshold at 100,000 tonnes of carbon dioxide equivalent (tCO2e) per year, aligning with the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015. Developers should assess whether their proposals are likely to trigger this threshold and, if so, ensure they have the data and systems in place to meet these reporting obligations.

Updated draft MNES standard

The latest exposure draft of the MNES standard has been updated to incorporate feedback from the original consultation that took place earlier this year and to ensure alignment with the new legislation.

There are a number of major updates since the first draft of the MNES standard.

Firstly, there is a higher approval threshold. The updated draft confirms that the minister will only approve an action if satisfied it is “consistent with” the MNES standard, replacing the prior wording of “not inconsistent with”. Assessment documents must now actively demonstrate alignment with each of the principles of the standard.

The conservation objectives of the draft MNES standard have also been expanded to include the “management, restoration and recovery” of protected matters; and to insert wording in the specific conservation objectives for water resources, which require the protection and conservation of provisioning, regulating, cultural and supporting ecosystem services.

Principle 1 now requires that actions adopt the mitigation hierarchy, rather than merely considering it as proposed in the earlier draft. Avoidance must be achieved through the design of the action. Where a significant impact cannot be avoided, the mitigation measures must reduce the impact “including, where possible, below the level of significance”, replacing the previously proposed requirement of “identifying and implementing measures to reduce significant impacts to protected matters”.

Compensation is mandatory for residual significant impacts. Earlier drafting that provided a level of discretion regarding compensation for residual significant impacts on a protected matter has been changed to confirm that compensation is required either through an offset activity or a restoration contribution charge.

In addition, the drafting confirms that ‘unacceptable’ impacts cannot be compensated unless the action is a national interest proposal. The regulations will also be able to prescribe certain protected matters where a residual significant impact renders the action incapable of approval and there is no offset pathway available.

Previously it was only contemplated that actions “should be supported by” appropriate data, consultation with Aboriginal and Torres Strait Islander people, and effective consultation with other interested parties. This is now an explicit requirement.

The scope of Indigenous engagement has also been expanded to clarify that, where relevant, the consultation must be “effective and genuine”, include the contribution of Indigenous knowledge, and must be “adapted to the nature of the interests” of the relevant persons. Consultation with the public must also be “effective”. 

Updated draft Offsets standard

As with the draft MNES standard, the latest exposure draft of the Offsets standard has been updated to incorporate feedback from the original consultation earlier this year and to ensure alignment with the new legislation.

There have been a number of significant updates made since the first draft of the Offsets standard. Feasibility is now mandatory. An offset activity must now be confirmed to be feasible via a high level of confidence that the offset activity will:

• contribute to the recovery or enhancement of the affected protected matter;
• result in the required net gain on its own or in combination with other offset activities or a restoration contribution charge; and
• achieve the intended outcome in a reasonable and ecologically or culturally relevant timeframe, having regard to the damage to the protected matter.

Security maintenance periods are now an explicit requirement where drafting indicates that offset activities ‘should be’ securely protected. As per the earlier draft of the reforms, direct offsets must be maintained for the ‘maintenance period’.

However, there are two exceptions:

• short-term or temporary impacts, where the maintenance period has been reduced from a minimum of 25 years to the earlier of 20 years or the point at which the offset activity becomes self-sustaining; and
• long-term or permanent impacts, where the maintenance period has been updated to align with the earlier of the duration of the approval or bioregional plan, or the point at which the offset activity becomes self-sustaining.

The criteria for self-sustaining status must be defined upfront in a management plan.

Previously, offset activities were encouraged to deliver “a benefit” to the protected matter. This has been strengthened to state that an offset activity “must be likely to” deliver an “additional benefit” to the affected protected matter “that would not have otherwise occurred”.

However, the updates also clarify that:

• a state or territory offset that already applies to the same action and protected matter can still satisfy this requirement; and
• an offset activity which is registered as an advanced restoration action is not precluded from delivering an additional benefit.

Offsets now “must” compensate on a like-for-like basis. The only exception to this is if the decision-maker is satisfied the offset activity will both deliver a greater conservation benefit for the affected protected matter than if a like-for-like outcome were delivered; and is consistent with the priorities for restoration of the affected protected matter set out in a conservation planning document.

An offset activity must also now be delivered in “an area relevant to the protected matter” – that is, the same area in which the residual significant impact occurs or, where this is not reasonably practicable, in an area that is ecologically or culturally relevant to the protected matter and that is likely to result in an equivalent or greater conservation outcome.

There is also a new registration requirement. An offset activity must be secured and registered on the register of offsets established by a Commonwealth, state or territory government before the relevant residual significant impact occurs.

Co-written by Belle McKinley and Angie Quan of Pinsent Masons.