Australia’s EPBC Act Reforms: What Changes When Avoidance Comes First

• Australia’s EPBC Act reforms raise the bar for project approvals, replacing no net loss with a net gain test that puts greater emphasis on avoiding and mitigating impacts before compensation is considered
• Important areas of the new framework remain open to interpretation, including unacceptable impacts, National Interest exemptions and the interaction between state and federal approvals, creating additional risk for environmental managers
• Early environmental input can strengthen the path to approval, giving environmental managers more opportunity to test avoidance, shape project design and build a defensible mitigation strategy before key decisions are locked

For years, environmental impact assessment in Australia has treated offsets as the release valve. If a project could not fully avoid its impact on a matter of national environmental significance, an offset closed the gap and the approval moved forward. The Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act) reforms are closing that valve, and proponents who plan around the old assumptions are likely to find their timelines and their budgets under pressure.

With the National Environmental Standards released on 19 August 2026 and a National Environment Protection Authority (National EPA) taking shape, the new net gain test replaces the old no net loss benchmark. Proponents can no longer treat compensation as a routine offset payment. They must demonstrate a measurable net gain against an evidence-based baseline, and getting there starts long before a referral is lodged. The key message, mitigation over compensation!

This shift traces back to the Samuel Review, which found that impact assessment had become a compliance exercise rather than a genuine test of outcomes. Technical reports grew longer without getting clearer, and decisions followed checklists rather than evidence. The reforms respond directly to that criticism, pushing for proportionality and a decision-making culture built around the mitigation hierarchy rather than the paperwork that documents it.

Referrals are expected to spike ahead of the final transition date of 1 December 2026, as proponents look to fall under the current regime before the new standards apply. Projects that engage early and build a defensible avoidance case now are the ones best placed to move through the reforms with confidence.

The reforms are anchored by National Environmental Standards. Four were released on 19 August 2026, with a fifth to be released soon.

Many proponents still assume compensation is a reliable fallback if avoidance/mitigation proves inconvenient. The net gain test challenges that directly. Achieving a genuine like for like outcome in the Offsets National Environmental Standard is difficult, and the legislation now embeds harder definitions to constrain how decision makers can interpret significant impact. Compensation has not disappeared, but it has moved from a starting position to a last resort, and projects designed around it as a first option will need to be reworked.

A second area of exposure concerns certainty itself. Under section 527F, the Minister must be satisfied an action has no ‘unacceptable impact’ on an MNES, a subjective and discretionary test that is likely to generate litigation as courts work out what ‘seriously impairs an MNES’ actually means in practice. The interaction between National Interest exemptions and the unacceptable impacts test is also still untested. Proponents relying on either pathway without a clear, well evidenced position are taking on risk that is avoidable with the right advice at the right time.

Proponents who bring practitioners in late, after design is largely fixed, may struggle to demonstrate the iterative avoidance the reforms now expect. Environmental impact statements will need to tell that story explicitly, showing how impact, magnitude, sensitivity and significance were actually assessed, not just concluded. Building that narrative from the start is faster and more defensible than reconstructing it under time pressure.

Much of the detail is still unresolved. The net gain test and offsets calculator remain a work in progress, the First Nations National Environmental Standard has not yet been released, and the practical boundary between National Interest projects and unacceptable impacts is likely to be tested in the courts before it is settled in guidance.

What is already clear is the direction of travel, and proponents do not need to navigate it alone. Onterris supports clients across resources, water infrastructure and energy projects with EPBC Act referrals, impact assessment strategy, approvals pathway advice and regulator engagement, so that environmental strategy becomes a genuine driver of project design rather than a constraint managed at the end.