The new National Environmental Protection Agency (NEPA): how will it work and what are the implications for industry?

In late November 2025, the Federal Parliament passed significant environmental reforms including amendments to the Environment Protection and Biodiversity Conservation Act 1999 (Cth) (EPBC Act). 

A key component of the reforms was to establish the National Environmental Protection Agency (NEPA) under the National Environmental Protection Agency Act 2025 (NEPA Act). The NEPA will be an independent federal environmental regulator and will have several roles including:

• compliance and enforcement;
• decision-making on delegation by the Federal Environment Minister for EPBC Act applications including referrals and if declared a controlled action, any relevant approval.

The NEPA is due to commence on 1 July 2026 and this article provides an overview of NEPA’s functions and powers including related EPBC Act reforms such as the higher maximum civil penalties.

NEPA's functions and powers

The NEPA will be led by a Chief Executive Officer (CEO) who will be appointed for a period of no longer than five years.

Although NEPA will be established as an independent federal regulator, the Minister may give the CEO a statement of the Minister’s expectations for the CEO and NEPA and the CEO must respond with a statement of intent. The statements will guide the operations of NEPA. However, the independence of NEPA is a key component of the reforms.

Compliance and enforcement

Under the EPBC Act reforms, compliance and enforcement will be more robust and broad ranging than has historically been the case. It is likely that there will be a significant increase in compliance and enforcement activity. Recently, a $55 million penalty was imposed on US mining company, Alcoa, for unlawful land clearing in Western Australia between 2019 and 2025 (see ministerial media release). Although this penalty was imposed under the former EPBC Act regime, it highlights that environmental compliance is already a key focus for the Commonwealth and indicates a trend towards the imposition of higher penalties. 

Under the reforms, NEPA will have powers to enforce non-compliance with the EPBC Act, including conditions of approvals. NEPA will also conduct environmental audits and undertake compliance monitoring activities.

NEPA will have the power to issue Environment Protection Orders (EPOs) to address non-compliances that are causing or pose an imminent risk of serious harm to the environment. EPOs can be issued to:

• ensure future compliance with federal environmental legislation;
• ensure compliance with an existing approval or exemption; and
• prevent, mitigate or reduce the damage or risk of damage caused by an action, including stop-work orders to halt damaging activities.

An EPO will only remain in force for up to 14 days, unless extended by the CEO for an additional period of up to 14 days. 

These compliance mechanisms will also be supported by increased civil penalties under the EPBC Act, which aim to counteract the “cost of doing business” approach and to reflect maximum civil penalties under other federal legislation. 

The new maximum penalties under the EPBC Act are as follows.

• For individuals, the greatest of:
  • up to 5,000 penalty units (currently equivalent to $1.65 million); or
  • if the Court can determine both the benefit derived and the detriment avoided because of the contravention – the sum of those amounts multiplied by three; or
  • if the Court can only determine the benefit derived or the detriment avoided because of the contravention – that amount multiplied by three.
• For corporations, the greatest of:
  • up to 50,000 penalty units (currently equivalent to $16.5 million); or
  • if the Court can determine both the benefit derived and the detriment avoided because of the contravention – the sum of those amounts multiplied by three; or
  • if the Court can only determine the benefit derived or the detriment avoided because of the contravention – that amount multiplied by three; or
  • 10 per cent of the company’s annual turnover for the 12 months to the end of the month in which the contravention occurred, up to a maximum of $825 million.

Regulatory support and supervision

The NEPA will also provide regulatory support to the Minister. While the Minister retains decision-making authority for EPBC Act referrals and approvals, the Minister can delegate that decision-making power to the NEPA. For example, this will include referral decisions and, if an activity is determined to be a controlled action, any determination of an EPBC Act approval.

The NEPA CEO will also have the power to:

• conduct periodic reviews of bilateral agreements between the Commonwealth and states and territories to ensure consistency with the EPBC Act and to reduce duplication between the two levels of government;
• monitor interpretation and application of bioregional plans, which will need to be considered when granting approvals under the EPBC Act;
• make recommendations to the Minister about potential regulatory improvements under laws conferring functions on the CEO; and
• maintain registers of “registrable decisions” with the aim to promote transparency and accountability by publishing decisions of the NEPA.

The road ahead

The establishment of NEPA represents a major institutional change in federal environmental regulation. Proponents of development will now potentially need to manage interactions with state and federal environmental regulators, which brings an additional layer of complexity to development and operational activities. Proponents should also take note of the significant increase in civil penalties and the potential for the issue of EPOs, which may delay development where NEPA considers non-compliances with federal environmental legislation have arisen.