Australia’s top court ruled in favour of a community group in the first climate case to come before it, upholding a decision to block the extension of a coal mine in New South Wales.

The High Court of Australia dismissed an appeal by MACH Energy, which wanted to keep its Mount Pleasant mine running until 2048 and double its coal output, adding about 400 million tonnes of the fossil fuel over its lifetime.

It found the state’s Independent Planning Commission, which approved the extension, had failed to properly consider imposing conditions to limit the project’s climate impact.

Scope 3 emissions, released by overseas customers burning the coal, made up 98 per cent of the mine’s greenhouse gas emissions but the commission considered only the remaining 2 per cent, Justice James Edelman noted. “By focusing only upon 2 per cent of the project’s emissions,” he said, “the commission failed in its reasons to consider whether conditions should be imposed to ensure that greenhouse gas emissions are minimised to the greatest extent practicable.”

The 2022 extension was set to make Mount Pleasant the largest open-cut coal mine in New South Wales but it was challenged by the Denman Aberdeen Muswellbrook Scone Healthy Environment Group, made up of local residents in the Hunter Valley, northwest of Sydney.

The group won in the New South Wales Court of Appeal, so MACH Energy went to the High Court.

“The High Court has said what we have always known: we cannot dig up coal, ship it overseas, watch it drive climate change, and then pretend the consequences have nothing to do with us and won’t be felt by us,” Wendy Wales, a retired science teacher and the group’s president, said.

Anita O’Hart, the lawyer who represented the group, said the ruling would be binding across the state and described it as one of the “most significant domestic climate law decisions in the world”.

“This is an historic ruling for Australian ⁠environmental law,” she said. “The High Court has confirmed that planning authorities cannot ignore the chain of causation from a project’s emissions through to real, local climate harm.”

MACH Energy said in a statement that it was disappointed with the outcome but accepted the ruling. It would “carefully review the judgment to understand its implications for future project assessments and environmental approvals”.