High Court judge David Holgate said the previous Conservative government's original decision to grant permission for the Whitehaven mine in Cumbria, northwest England, was "legally flawed".
The new Labour government had already withdrawn its support for the mine and the project now faces further uncertainty after the ruling in favour of environmental groups that brought the case.
Niall Toru, senior lawyer with "Friends of the Earth", one of the groups bringing the legal action, called it "fantastic news and a huge victory".
"This mine should never have been given permission in the first place... it would have huge climate impacts," he said.
He called on the mine developer, West Cumbria Mining Limited (WCM), to now withdraw its application.
Lawyers for WCM argued during the case that the mine would have a "broadly neutral effect on the global release of greenhouse gas".
But Holgate rejected the claim, saying: "The assumption that the proposed mine would not produce a net increase in greenhouse gas emissions, or would be a net zero mine, is legally flawed."
The High Court agreed with Friends of the Earth and the campaign group South Lakes Action on Climate Change that emissions from burning the extracted coal were not properly considered during the planning process.
WCM responded by saying it "will consider the implications of the High Court judgement and has no comment to make at this time".
- Years-long battle -
Lawyers for Angela Rayner, the secretary of state for housing, communities and local government, said soon after Labour took office in July that an "error in law" occurred when former senior minister Michael Gove approved the scheme in December 2022.
The High Court decision comes just weeks after the UK Supreme Court stalled a new oil development in southern England after ruling it was given the go-ahead without proper assessment of its full impact on greenhouse gas emissions.
The majority decision on June 20 was seen as setting a major new precedent for fossil fuel projects which will affect the UK's ability to reach net zero by its mid-century target.
Friends of the Earth and campaigners from a local pressure group waged the years-long legal battle against the planned mine on the edge of the Lake District national park, and accused the previous Conservative government of ignoring its future climate impacts.
Proponents of the scheme have argued it will spur economic regeneration in a former mining region that has hit on hard times.
WCM insists it will bring to market a supposedly "greener" source of coking coal, used for steelmaking.
The firm has claimed it will operate a "world-leading, legally-binding emissions mitigation scheme", aligned with Britain's net-zero commitments.
But critics -- including climate activist Greta Thunberg -- have argued emissions, including the expected release of 17,500 tonnes of methane annually, make the project incompatible with those aims.
If WCM does not withdraw its application, the government will have to decide whether to allow the mine to be built.
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