Environment groups will today launch a legal challenge over the Environment Protection Authority's approval for coal-fuelled power plant in the Latrobe Valley.
The EPA last month cleared the way for Melbourne coal technology company HRL to build at Morwell what would be Victoria's first coal plant in 20 years.
The plant would use new gasification technology claimed to reduce greenhouse gas emissions from brown coal by about a third, to roughly the level of modern black coal stations.
Doubts have since emerged that the plant would be viable on the scale approved by the EPA – 300 megawatts, half the size proposed by the company.
Environment Victoria and community climate group LIVE plan to lodge an appeal in the Victorian Civil and Administrative Tribunal, challenging the EPA's ruling that the HRL plant would qualify as best-practice electricity generation.
EPA chief executive John Merritt said it was considered best practice under state climate change legislation when compared with existing brown coal power generation.
Environment Victoria campaigns director Mark Wakeham said legal advice from the Environment Defenders Office and environmental law barristers Adrian Finanzio and Rupert Watters suggested the EPA should have considered non-coal technologies in determining what was best practice.
''We think that it has failed to properly consider the alternatives to brown coal in its decision-making,'' he said.
''It's a very important case because if this power station proceeds, it will crowd out genuinely clean power stations and make it impossible for Victoria to achieve its target to reduce emissions by 20 per cent by 2020.''
Environment Defenders Office principal solicitor Felicity Millner said it would be the first time VCAT has been asked to test the relevance of state and federal energy policies in approving new coal power plants.
''If successful, this case will make approving new coal-fired power stations under current laws very difficult,'' she said. ''So it will be an important test of how well the law protects people and their environment in the context of climate change.''
Today is the final day that an appeal against the EPA decision can be lodged.
HRL has also flagged a possible legal challenge against the decision, accusing the EPA of approving a different plant from the one it had proposed.
The company, which is backed by $150 million in state and federal funding conditional on it proving that the project is financially viable, had not notified the EPA of a pending appeal by last night.
The Saturday Age revealed last month that Australia's four major banks had rejected funding for the HRL project, and that internal federal government correspondence had suggested it would not be viable at the approved size.
The EPA declined to comment. HRL did not respond to a query from The Age.