Community benefit agreements in the renewables sector: Legal, practical and policy perspectives

Key points

• Community benefit agreements (CBAs) are becoming a core project deliverable in the renewable energy sector, with regulators around the country embedding community benefit requirements into project approval processes and policies.
• Successful CBA outcomes will depend on early and transparent engagement with landholders, local governments, and other stakeholders.
• Careful drafting is required to comply with relevant legislative and policy requirements and ensure transparency and accountability, but also flexibility, efficient project delivery and the protection of confidential information.

Introduction

Australia’s transition to renewable energy is accelerating, with ambitious targets driving a significant increase in new wind, solar, and storage projects. The need for project proponents to secure and maintain a “social licence to operate” has never been more important, and CBAs have emerged as a key mechanism for building trust, sharing value, and addressing social impacts. In many jurisdictions, CBAs have become a core project deliverable.

This article examines the challenges and opportunities involved in developing CBAs, with our insights intended to help proponents, regulators and other stakeholders involved in the renewables sector to navigate this rapidly changing area of law, policy and practice to manage risks and deliver lasting benefits for local communities.

The social and regulatory landscape

The shift towards renewable energy is fundamentally changing the way energy is generated, transmitted and distributed to communities. Renewable energy developments are more geographically dispersed than traditional coal and gas projects, reflecting more varied optimal resource conditions and grid connection opportunities. This means that a large and diverse number of landholders, Traditional Owners and other groups may be impacted by renewable energy projects.

A strong social licence to operate, representing a project’s acceptance by its local community and other stakeholders, can help to streamline approvals, reduce legal and reputational risks, and enhance access to finance. Unlike a statutory approval, a social licence is intangible and must be earned and maintained through meaningful engagement, transparency and trust. CBAs have emerged as a key tool for gaining a social licence, fostering relationships with local stakeholders and addressing concerns about project impacts.

CBAs are no longer just a matter of good practice Regulators around Australia are embedding community benefit requirements into project approval processes and policies, and are increasingly requiring proponents to commit to providing long-term and strategic benefits to ensure that local communities derive significant value:

Queensland

Queensland is the first Australian jurisdiction to have introduced mandatory CBA requirements for renewable energy projects. As of 18 July 2025, proponents of large-scale solar projects and all wind projects are required to complete a social impact assessment and negotiate a binding CBA with the relevant local government(s) before lodging a development application. Queensland local governments are now in the process of developing and implementing CBA policies that aim to benefit their communities. Gladstone, Western Downs and Isaac regional councils have developed policies which specify minimum annual contribution amounts, amongst other expectations.

New South Wales

In New South Wales, the Department of Planning, Housing and Infrastructure introduced the Benefit-Sharing Guidelines in November 2024 to advise on how benefit sharing can be used in the planning and delivery of large scale solar, wind and battery energy storage systems (BESS). Proponents generally need to address the guidelines as part of preparing an EIS for large scale solar, wind and BESS projects. The Benefit-Sharing Guideline sits alongside other schemes for reinvesting money raised by renewable energy infrastructure into regional communities, including the Renewable Energy Zone schemes.

Victoria

The Victorian community benefit sharing scheme is undergoing significant change, with new rules on the horizon for managing how renewable energy projects gain access to Victoria’s transmission network, known as the Victorian Access Regime. VicGrid recently concluded public consultation on key documents comprising the Victorian Access Regime, including the Draft Community Engagement and Social Value Guidelines for Renewable Energy and Transmission Projects. In the meantime, the current Guide to Community Engagement and Benefit Sharing in Renewable Energy Development in Victoria sets minimum expectations for how proponents are to engage with communities, landholders and Traditional Owners and deliver community benefits when developing projects, and it is considered by decision makers when determining planning permit applications.

Western Australia

In June 2025, the Western Australian Government concluded public consultation on a Draft Guideline on Community Benefits for Renewable Energy Projects. It is intended to apply to large-scale, grid-connected renewable energy and storage projects, particularly those connected to the South West Interconnected System, and will set out expectations and principles for structuring benefit-sharing arrangements. While the guideline signals the Western Australian Government’s policy direction, there is currently no scheduled date for its introduction.

Key legal and practical issues for drafting CBAs

Our experience in assisting clients to negotiate CBAs has highlighted the following key issues:

Compliance

The shift towards the codification of CBA requirements is leading to greater certainty but it also raises the bar for compliance and legal documentation. In addition to any applicable state or territory legislation and policies, it is important to achieve consistency with relevant local government frameworks, requirements and funding priorities. There is a current trend for local governments to set expected minimum contributions to pooled benefit funds to facilitate larger-scale investments in infrastructure and address cumulative and regional impacts, and provide for a more equitable distribution of benefits across regions.

Engagement and consultation

Early, genuine engagement and the identification of tangible, tailored and lasting local benefits are critical to securing a CBA, particularly in an era of increasing opposition to not only wind farms but also to solar and BESS projects. It is important for community engagement and consultation to gather the diversity of perspectives within any local community, including landholders, Traditional Owners and also other groups who may be impacted. Local governments will expect to be consulted as they represent the community, local businesses and the local workforce. They can also be the custodian of important infrastructure that will be relied upon for project delivery.

In addition to statutorily mandated CBA requirements, there is also growing recognition of the need to engage Traditional Owners as genuine partners in renewable energy projects. Best practice now extends to engaging beyond cultural heritage protection to include co-management, employment, contracting opportunities and, in some cases, equity participation.

In Queensland, the prerequisite social impact assessment and CBA processes are designed to support these requirements, but additional engagement may help to achieve a broader social licence.

Landowner consent

A related consideration is whether, and in what manner, landholder consent to a CBA should be secured. Queensland local governments commonly require such consent so that the resulting obligations may attach to the land and bind successors in title. In practice, however, some landholders resist having CBAs run with the land because of perceived risks, including a risk of reduction in property values. The challenge is to strike an appropriate balance between legal certainty and these practical realities, while also minimising delay.

Timing of contributions

It is important to consider the timing for commencement of benefit-sharing obligations, for example, whether they commence at the time of the grant of the development approval, or at the start of construction or operation. From a developer’s perspective, CBAs should include clear triggers and conditions precedent for commencement to ensure that substantive commitments only take effect once project approvals have been granted and, ideally, the project is generating revenue. However, local communities may experience impacts before benefits are realised, particularly during the construction phase. To address this, developers and regulators may consider linking some contributions to early works or construction, staging contributions or, alternatively, engaging in robust stakeholder management and communication strategies to manage community expectations around the timing for implementation of benefits.

Calculation of monetary contributions

The method for calculating rated monetary contributions (for example, based on nameplate capacity or actual generation) can carry significant commercial implications. Drafting to allow for flexibility in different generation scenarios, including force majeure events that interrupt generation, can assist developers to manage risk and adapt to changing circumstances.

Attribution of benefits

Developers may wish to seek public recognition for their contributions, even those made to pooled funds. It is a commercial reality that those who are directly affected by a project, such as neighbouring residents, may not receive a higher share of the benefits, even though they bear the greatest impacts. As a result, developers may continue to face challenging stakeholder relations with their closest neighbours, despite significant investment in wider community initiatives. Carefully negotiated attribution clauses and transparent reporting mechanisms can help to balance these interests and support the developer’s social licence objectives. Developers may also wish to consider providing additional benefits to neighbouring landowners and occupiers, and other stakeholders proximate to the project area, to ensure their return on investment in social licence.

Confidentiality versus public disclosure

Careful drafting is necessary to protect commercial interests while also promoting transparency. Given that CBAs are required to be made publicly available in Queensland, it is essential to avoid or minimise the inclusion of commercial-in-confidence or personal information in these agreements. Other states and territories that are considering incorporating similar publication requirements in their frameworks should note the importance of balancing transparency with the protection of commercially sensitive and personal information.

Reporting and accountability

CBAs should include clear requirements for reporting, monitoring, and review. Such clauses can help to build trust by demonstrating transparency and accountability to both the community and local governments. Public registers of CBAs, annual reporting on benefit delivery, and community committees are emerging as standard features. Local governments will, as a matter of course, need to be mindful of their own statutory auditing, reporting and governance obligations.

Conclusion

As legal and policy frameworks continue to evolve, CBAs are expected to become a standard component of project development in the renewable energy sector. Successful CBA outcomes will depend on early and transparent engagement with communities, local governments, and other stakeholders. Careful drafting and robust governance will be important to address project-specific commercial and legal challenges that may arise, and to ensure that benefit-sharing delivers lasting value for local communities.

It is anticipated that additional jurisdictions will introduce legal requirements for CBAs, following the approach adopted in Queensland. We also expect that there will be a greater emphasis on regional and cumulative impacts, and continued innovation in respect of benefit-sharing approaches. Developers should stay abreast of policy developments in both their local jurisdiction and around Australia and be prepared to adapt to evolving standards and expectations.

We have commenced advising on the community benefit framework under the new Queensland planning regime and can assist with the drafting and negotiation of CBAs across Australia.