EPBC Act reforms and national EPA commencing soon: what proponents need to know from 1 July 2026

Australia’s environmental laws have undergone their most significant transformation to date. Building on the landmark 2020 Independent Review of the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act) by Professor Graeme Samuel AC, which called for comprehensive reform, the Federal Government has passed the Environment Protection Reform Bill 2025 (Cth) alongside a suite of supporting legislation. This marks a bold step forward in overhauling the nation’s environmental regulatory framework.

As of 1 July 2026, the EPBC Act Tranche 2 reforms will come into effect. One of the main changes will be the establishment of the National Environmental Protection Agency (NEPA), the country's first independent regulator under the EPBC Act. This follows from the recommendation set out in the Independent Review that compliance and enforcement functions should not be subject to actual or implied direction from political interference and that the cost of non-compliance should be an active deterrent, not simply a "cost of doing business".

Establishment of the NEPA

The NEPA will be established on 1 July 2026 under the National Environmental Protection Agency Act 2025 (Cth) (NEPA Act). The NEPA's function is to assist the Chief Executive Officer (CEO) in the performance of the CEO’s functions, conferred by the EPBC Act or other legislation.

Essentially, the NEPA will be an independent regulator under the EPBC Act with administration and enforcement powers and functions. The CEO will be responsible for compliance and enforcement, approving, changing or cancelling environmental permits and licences, and monitoring accreditation instruments, bilateral agreements and bioregional plans under the EPBC Act. While the Minister continues to hold primary decision-making authority for EPBC Act referrals and approvals, the Minister can delegate this power to the NEPA. This includes decisions on referrals and granting EPBC Act approvals.

New powers and penalties

The CEO of the NEPA will have the following powers:

• Power to issue Environmental Protection Orders (EPOs): the CEO of the NEPA will have the power to issue EPOs or "stop work orders" where there is an imminent risk of serious damage to the environment, or where damage has already occurred and compliance needs to be ensured.

• Power to make formal rulings: the CEO of the NEPA will have power to make formal rulings (opinions on how the law, regulations or national environmental standards should be applied in specific situations) regarding decisions vested in the NEPA.

Additionally, the reforms will increase the maximum civil and criminal penalties for the most serious breaches of the EPBC Act. The maximum penalties that will be applicable are as follows:

• Civil penalties: 5,000 penalty units ($1.65 million) for an individual and 50,000 penalty units ($16. million) for a body corporate. If found guilty of a breach, the same penalty unit provisions apply, but penalties could be higher based on the value of the benefit derived from the breach, or the size of a business. This is determined by the new "civil penalty formula" to ensure proportionate penalties are imposed.

• Criminal penalties: 1,000 penalty units ($330,000) for an individual and 5,000 penalty units ($1.65 million) for a body corporate.

As part of recent consultation, DCCEEW is proposing to commence these elements of the reforms on 1 July 2026 so that the CEO of the NEPA has these powers available from day one.

New audit arrangements

The reforms expand the scope of the audit provisions under the EPBC Act and assign responsibility for the audit framework to the CEO of the NEPA. To support the 1 July commencement of the NEPA, DCCEEW is proposing to bring forward the commencement of the new audit provisions to apply to all approvals, orders, exemptions or any other kind of permission that can be granted under the EPBC Act, including those issued prior to the commencement.

Importantly, in addition to expanding the scope of directed environmental audits, the reforms introduce a new category of audit: "compliance audits".

Compliance audits are distinct from directed environmental audits as there are no threshold grounds for the audit, and they do not require prior notice. Compliance audits can be undertaken by a NEPA officer in respect of potential non-compliance with:

• an environmental authority^[1];

• an environmental exemption;

• an environmental order;

• a marine park permission or marine park order under the Great Barrier Reef Marine Park Act 1975 (Cth); or

• activities prescribed by the EPBC Regulations^[2].

The purpose of compliance audits will be to monitor compliance with conditions or requirements of the relevant permission, ensuring that activities being carried out are covered by the relevant permission, and ensuring that the impacts of activities being carried out under the relevant permission are not having an impact that is significantly greater than was initially assessed at the time the relevant permission was granted.

In addition to the introduction of compliance audits, the reforms expand directed environmental audits so that these capture compliance with environmental orders and exemptions, (and not just compliance with approvals).

NEPA transparency registers

Under the NEPA Act, the CEO of the NEPA must create, and maintain published registers of "registrable decisions".

These registers will be public and will record details of a proponents' environmental non-compliance under the EPBC Act. This will align the EPBC Act reporting framework with State frameworks that require publication of certain enforcement documentation on State registers.

Under the NEPA Act, the Minister for the Environment may make Rules specifying which decisions must be published on the registers. The Minister may also make Rules requiring the CEO to publish other information on the registers, known as "prescribed matters". As part of its consultation, DCCEEW has proposed Rules for both registers.

For the register of prescribed matters, the proposed Rules provide that the register will include:

• convictions for an offence;

• Federal Court orders relating to a breach of an enforceable undertaking, payment of a pecuniary penalty, a remediation order, or an injunction under the EPBC Act;

• applications for a permit under the Environmental Protection (Sea Dumping) Act 1981 (Cth) (Sea Dumping Act); and

• infringement notices issued under laws regulating hazardous waste, ozone protection, synthetic greenhouse gas management, product emissions standards, and underwater cultural heritage.

For the register of registrable decisions, the proposed Rules provide that the register will include decisions by the CEO of NEPA to:

• issue, vary or revoke an EPO under the EPBC Act;

• issue a notice directing an environmental audit under the EPBC Act;

• issue, vary or revoke the administration of permits under the EPBC Act;

• issue, vary or revoke a condition of a permit under the EPBC Act or the Sea Dumping Act; and

• issue an infringement notice under the Recycling and Waste Reduction Act 2020 (Cth), Hazardous Waste (Regulation of Exports and Imports) Act 1989 (Cth), Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (Cth), and the Underwater Cultural Heritage Act 2018 (Cth) .

Undertaking minor or preparatory works while controlled action is under assessment

DCCEEW is proposing to bring forward the new provision in the EPBC Act that allows proponents to seek agreement from the Minister for the Environment to undertake minor or preparatory works while a project is under a controlled action assessment.

This will be an important mechanism for project proponents to ensure certainty while assessment of their project continues, particularly noting the increased focus on environmental compliance by the new NEPA.

The new provision means that if the Minister for the Environment agrees, minor or preparatory works will be exempt from the offence provisions under section 74AA(1) of the EPBC Act.

The Minister must be satisfied that the works are a component of a controlled action, are minor and preparatory, are minor and repairable to protected matters, and that it is appropriate for them to proceed before the larger action is assessed and approved. If agreed, the Minister must publish a notice on the DCCEEW's website with a description of the works, their location and the date the agreement took effect.

Whilst the phrase "minor or preparatory" is not defined, we expect that this mechanism will provide much-needed certainty for proponents wishing to undertake initial works such as minor geotechnical investigations or survey work while the balance of their action is being assessed.