NSW planning rules that require greenhouse gas emissions be taken into account when approving major projects will be tested in court in a challenge to a coal mine extension near Mudgee.

In April, the Planning Assessment Commission approved a seven-year extension to the Wilpinjong​ mine. The nod for the mine, which had an annual coal output of 13 million tonnes, came just one week after the PAC had received 284 objections to the project.

A farming property at the top of the Barigan Valley, near Bylong and Wollar. Most of the valley is owned by Peabody for its Wilpinjong mine. Credit:John Jakes

Environmental Defender's Office NSW will challenge the PAC's decision on behalf of the Wollar Progress Association. It will argue in the Land and Environment Court that the commission failed to consider the project's carbon emissions as required by the mining State Environmental Planning Policy.

Most of the output is earmarked for AGL's Liddell and Bayswater power stations in the Hunter Valley, and so most of the emissions from burning the coal will add to NSW's tally.