Rising Tide's Peter Gray and Naomi Hodgson claim that the Bayswater power station in the Hunter Valley, owned by government-owned Macquarie Generation, is breaching state pollution legislation through its release of carbon dioxide emissions.

Specifically, they claim that the power station breaches section 155 of the Protection of Environment Operations Act 1997 (POEO Act), which makes it an offence for a person to willfully or negligently dispose of waste in a manner that harms, or is likely to harm, the environment.

According to a recent report released by The Climate Group, Bayswater is NSW's largest carbon-emitting power station, emitting almost 15,000 tonnes in 2008.

The case has been taken up by the NSW Environmental Defender's Office, and principal solicitor Kirsty Ruddock says it is the first of its kind. "It's the first case where carbon dioxide has been attached as a pollutant under pollution legislation," she said.

Though climate change litigation isn't new, Ruddock explained, previous cases have been primarily administrative challenges, focusing on whether climate change considerations were, and should have been, taken into account when development and planning decisions were made.

"No cases that I'm aware of have actually targeted from this perspective. That's the whole point in taking it - to see how pollution laws interact with what's going on with climate change and what should be done in relation to regulation in that particular area," she said.

Ruddock said that the biggest hurdle the action faces is the defence in the legislation for people who can establish that waste was disposed of "with lawful authority". She will argue, however, that while the power station is legally licensed, that licence doesn't extend to permit carbon dioxide emissions.

"The power station obviously has a licence, but it's not a licence to emit carbon dioxide, it's a licence to produce energy. And [while] ... there are wastes they can emit from the facility, carbon dioxide is not one that's listed on the licence, so that's why we can bring the case," she said.

Gray and Hodgson are seeking both a declaration that the Bayswater power station is in breach of the POEO Act and an order that it stop emitting carbon dioxide altogether.

The case is listed for a directions hearing on 21 August.

- Zoe Lyon