Australia enacts new environmental reforms

On Friday, November 28, 2025, the Australian Senate passed the Environmental Protection Reform Bill 2025, together with a suite of other measures (collectively known as the EPBC Act Reforms).

These reforms represent the most significant overhaul of Australia’s national environmental laws since the Environment Protection and Biodiversity Conservation (EPBC) Act 1999 was first enacted. Intended to balance economic growth with ecological stewardship, the reforms are aimed to:

• Remove barriers to productivity by modernizing outdated regulatory processes.
• Streamline environmental approval pathways for nationally significant projects, including housing, renewable energy, and critical minerals.
• Deliver stronger environmental protections through clearer standards, independent oversight, and enhanced transparency.

The package incorporates key recommendations from the Samuel Review (2021) and aligns with priorities set out in the Commonwealth Government’s 2025 Economic Reform Roundtable, potentially heralding a new era of stricter environmental governance in Australia.

Importantly, several provisions take effect immediately – including the Unacceptable Impacts Test and restrictions on how coal and gas projects are considered under streamlined pathways. The remainder will be phased in progressively throughout 2026. These reforms will apply to any entity – whether domiciled in Australia or abroad – that seeks environmental approvals in Australia under the EPBC Act.

KEY INITIATIVES IN THE EPBC ACT REFORMS

1. National Environment Protection Agency (NEPA)

At the heart of the reforms is the creation of the National Environment Protection Agency (NEPA), Australia’s first independent federal regulator for environmental approvals and compliance. NEPA will have powers to monitor projects, enforce standards, issue penalties, and ensure transparency in decision-making.

While monitoring will be stricter, companies will benefit from reduced ministerial discretion. A consistent, rules-based approach to regulatory approvals will create a more level playing field, giving companies greater confidence that approval decisions will be predictable and aligned with national standards, leading to certainty in their capital expenditure and investment decisions.  By setting clear rules and applying them uniformly, we expect that NEPA will reduce regulatory ambiguity and provide companies with confidence that projects will be assessed transparently and fairly.

2. National Environmental Standards

The reforms introduce binding National Environmental Standards that intend to provide clearer rules on unacceptable impacts to biodiversity under the Matters of National Environmental Significance framework. Instead of a flexible ‘significant impact’ test, entities will now face a two‑tiered framework: unacceptable impacts (blocked outright) and significant but manageable impacts (requiring net gain or restoration contributions). Stricter requirements have also been introduced to ensure environmental offsets genuinely compensate for damage. These standards will be enforceable.

While mining, energy, and property companies may face higher compliance costs, the reforms will support long-term stability and confidence in project approvals.

3. Streamlined Approval Pathways

Approval pathways will be streamlined for priority projects, with the introduction of a National Interest Test to balance economic development with environmental protection. The Minister will have the power to approve national interest proposals even if they do not deliver a net gain for nature, although actions with unacceptable impacts on protected matters will not be approved.

Priority projects in housing, renewables, and critical minerals will enjoy faster approvals, supporting national growth sectors. This will create new opportunities for companies to accelerate delivery timelines and attract investment that aligns with Australia’s economic priorities.

4. Offsets and Restoration Contributions

Proponents will be required to deliver a net gain for nature either through traditional land-based offsets or payments into a new Restoration Contributions Special Account.

Embedding offset mechanisms within a regulated framework will provide companies with clarity and consistency in how environmental obligations are assessed. We expect the introduction of a flexible offset mechanism that is regulated will ensure offsets are credible, transparent and verifiable, reducing reputational risk and strengthening ESG alignment.

5. Environment Information Australia

It is intended that transparency will be enhanced through the establishment of Environment Information Australia, a body that will provide public access to environmental data, monitoring reports, and compliance information.

This double-edged sword will allow strong performers to showcase their sustainability credentials while also shining the light of scrutiny on weaker performers. We expect that companies that lead in compliance will gain reputational advantages and potentially, improved access to capital from ESG-focused investors.

6. Forestry and Land Clearing Controls

Tighter regulation of high-risk land clearing will be introduced, with reduced regrowth thresholds under the ‘continuing use’ provision. Parliamentary negotiations resulted in new protections for native forests.

While restrictions may pose challenges in sectors like agriculture, forestry, and property development, it will potentially create opportunities for companies to differentiate through sustainable practices and building community trust.

7. Climate and Resource Safeguards

Climate and resource safeguards will exclude coal and gas projects from fast-track approvals, while renewable energy projects will be prioritized to support Australia’s net-zero commitments.

Coal and gas companies will likely face headwinds as renewable energy projects are prioritized for fast-track approvals, opening the door to accelerated growth in the Australian clean energy sector. This will potentially position Australia as a global leader in the transition to net zero and create new investment pathways for companies in the renewables sector.

8. Working with First Nations partners

The reforms also embed First Nations involvement in assessment and planning processes, as well as in the development of standards and bioregional plans.

Although including indigenous involvement in planning processes may extend timelines for companies, incorporating First Nations involvement is expected to strengthen companies’ social licence to operate. We expect that companies who engage authentically will reduce project risks, foster community trust, and enhance their ESG profile to shareholders and other stakeholders.

9. No new climate trigger

Despite extensive debate, there will be no new climate trigger. Proponents will be required to disclose greenhouse gas emissions and mitigation measures as part of project approvals, but these disclosures will be informational only.

Even in the absence of a climate trigger, we anticipate that disclosure requirements will keep companies accountable on climate. Transparent reporting offers a chance for companies to demonstrate credible climate strategies, thereby boosting investor confidence in the management of their sustainability issues.

KEY AMENDMENTS TO THE EPBC ACT 1999

The Bill amends the EPBC Act 1999 and related legislation to:

• Embed national environmental standards directly into the Act.
• Clarify definitions of ‘unacceptable impacts’ for all matters of national environmental significance.
• Modernise assessment pathways, reducing duplication between federal and state processes.
• Strengthen protections for threatened species and ecosystems, ensuring compliance with international biodiversity obligations.
• Establish a charge and cost recovery framework to fund regulatory activities.

 COMMENTARY ON THE REFORMS

Reactions to the reforms have been mixed across environmental and business groups. For instance:

The Australian Conservation Foundation (ACF) have welcomed many aspects of the Bill but have noted shortcomings:

“ACF has advocated for reforms to close deforestation loopholes, set clear, strong rules for nature protection, establish an independent EPA to provide accountable and expertise-based decision making, and address climate harm in all decisions… Climate remains the biggest missing piece.”

Greenpeace Australia Pacific also echoed similar concerns:

“Removing the risk of fast-tracking coal and gas projects is also welcome. But the big sting in the tail is that the legislation still fails to address the enormous climate harm to nature from these sorts of projects. It still leaves the door open for the heedless expansion of coal and gas – major drivers of worsening bushfires, floods, and other climate disasters that destroy ecosystems and harm species.”

Meanwhile, the Minerals Council of Australia has expressed concerns about increased regulatory burden, warning that:

“The government’s deal with the Greens will increase red tape by requiring mining operations to make climate disclosures under the EPBC Act despite this already being a clear legal requirement under the Safeguard Mechanism, which could open new avenues for legal challenge.”

The Business Council of Australia also argued that the amendments undermine national energy priorities:

“The Greens’ amendments create new barriers that cut against national priorities for the energy transition, including excluding gas projects from streamlined pathways and regional planning, and preventing water-trigger projects from using single-desk approvals.”

WHAT COMPANIES SHOULD DO NEXT

Although further developments are expected, including the release of draft National Environmental Standards and the negotiation of bilateral agreements with States and Territories, companies should begin assessing how these reforms may affect their current operations and future projects.

Other key actions that companies should consider:

1. Review governance frameworks – Ensuring board and executive oversight of environmental risks is robust, and update governance structures to ensure accountability for NEPA’s new enforcement powers.
2. Reassess materiality – Consider incorporating the impacts of these regulatory reforms into your materiality processes.
3. Enhance monitoring and reporting systems – Strengthen data collection and reporting processes to ensure environmental performance metrics are reliable and able to withstand heightened regulatory scrutiny.

Contact us to chat through what these reforms mean for your organization.

A copy of the Environmental Protection Reform Bill 2025 can be accessed here.