Adani's plan to take 12.5 billion litres of water from a river in drought-stricken Queensland is a step closer to happening, according to environmental groups, after the Federal Government decided the project did not need a full environmental impact assessment.

Key points: Federal Government decides Adani water plan does not need environmental impact statement

Federal Government decides Adani water plan does not need environmental impact statement Mining giant wants to take 12.5 billion litres of water from Queensland river

Mining giant wants to take 12.5 billion litres of water from Queensland river Environmentalists say the move is "appalling and dangerous"

Environmentalists say the move is "appalling and dangerous" Adani says it will work with Government to "complete the required assessment"

To build and run its proposed Carmichael coal mine, Adani wants to extract water from the Suttor River in central Queensland for up to 60 years, expand a dam there, and build a 60-kilometre pipeline to transport the water to its mine.

Federal law requires that if coal mines are likely to have a significant impact on the country's water resources, they must undergo a full environmental assessment, which would be scrutinised by an independent scientific committee.

But Adani argued that "water trigger" only applied if the water was used in the extraction of the coal, and that the water they would take from this river would not be used that way, but instead for practices like washing coal and dust management.

Environmental lawyers have previously said that argument does not hold water.

On Monday, the federal Department of the Environment decided the water trigger did not apply to the project and that it did not need to undergo a full assessment with an environmental impact statement.

A spokeswoman for the department said this was consistent with guidelines "which make it clear that the 'water trigger' does not apply to stand-alone projects, that do not directly involve the extraction of coal".

Instead, the project would undergo assessment via "preliminary documentation".

According to the Department of the Environment's assessment manual, that approach is used when the degree of public concern associated with a proposal is "low", when the degree of confidence of the impacts is "high", and when those impacts are "short-term or recoverable".

The department spokeswoman said there were only a small number of nationally listed plants and animals that were potentially impacted.

She also said the approach recognised the information that had already been provided to the department.

Environmental groups were enraged by the decision.

Water project will 'avoid full scrutiny'

"As one of the driest continents on Earth, water is the lifeblood of inland Australia," anti-Adani campaigner at the Australian Conservation Foundation Christian Slattery said.

"It is disappointing that while Queensland suffers through severe drought, the water infrastructure for Adani's massive polluting coal mine will avoid full scrutiny under Australia's national environment laws," he said.

Anti-mining group Lock The Gate Alliance described the move as "appalling and dangerous".

"This is another special deal for Adani that puts our water resources at risk during a terrible drought and hangs Queensland graziers and communities out to dry," spokesperson for Lock the Gate Alliance Carmel Flint said.

Arianne Wilkinson, a lawyer at Environmental Justice Australia, said the decision to submit Adani's proposal to the weaker form of assessment was disappointing.

"Their proposal should be given the full assessment under federal environmental law," she said.

"The company and its directors' environmental record are highly relevant and must form part of the Minister's considerations."

Adani told the ABC it would "work with the department to complete the required assessment for this project".

"The water trigger has already been applied to the extraction of coal and associated activities under the Carmichael Project approvals," a spokesperson said.

Environment Minister Melissa Price has been contacted for comment.