Plibersek argues in her decision that the terminal would threaten local marine,bird and plant life.

“The Victorian Renewable Energy Terminal Proposal project would have had unacceptable impacts on the internationally protected Western Port Ramsar Wetland,” a spokesperson for Plibersek said.

The project’s summary listed many potential impacts including loss of habitat for migratory birds,potential indirect habitat loss and changes to water quality. More than 10,000 waders and 10,000 ducks and swans visit the wetlands annually.

In Plibersek’s published statement of reasons,she said the impacts could not be adequately avoided and noted large areas of the wetlands would be destroyed or substantially modified.

“The proposed action is likely to cause irreversible damage to the habitat of waterbirds and migratory birds and marine invertebrates and fish that are critical to the ecological character of the Western Port Ramsar Wetland,” she said.

Plibersek also said dredging from the construction of the new facility would lead to a significant disruption to the tidal flows,which would “impact the deposition and movements of sediments and nutrients that in turn will impact the food webs of the mudflats and coastal area”.

Dimopoulos said on Monday the state government did not object to the federal environmental protection legislation process and would take some time to consider what the decision meant.

“We’re undeterred,we’ll digest the results of the decision and we’ll make[a decision] in relation to the next step,” he said.

Victorian opposition energy spokesman David Davis described the port veto as a “debacle”.

“Victoria’s offshore wind policy is now back to square one. How did Victoria,and specifically Energy Minister Lily D’Ambrosio not see this coming?” he said.

Port of Hastings community relations manager Todd Trimble said the corporation was considering its options and would provide an update in due course.

Mornington Peninsula Mayor Simon Brooks said Plibersek’s decision had surprised the council as it has been encouraging a better use of the land.

“It is disappointing,we’re really keen to broaden our economic base,” he said.

“We would really like to see some longer-term strategy that looks to encourage a clean green,innovative,value-add type of manufacturing that is linked to our transitioning into a lower carbon future.”

The total project area would have been 146 hectares and involved clearing vegetation,dredging and reclaiming the seabed for the wharf,which would be about 600 metres long by 100 metres wide.

Mel Barker,the chief executive of the Western Port Biosphere Foundation – an independent body promoting scientific protection of the wetlands – said it was a “tricky balance” because the group supported a transition from fossil fuels,but the impact on the environment would be too great for wetlands.

“There’s thousands of birds that migrate here each year … and they use those mud flats as a feeding ground,” she said.

Barker also said the wetlands had “world-class” carbon absorption from the mangroves,sea grasses and the salt marshes.

“We can see that’s got enormous climate benefits because they’re really effective at getting carbon so about 50 times more effective than a land-based forest,” she said.

Australian Pipelines and Gas Association chief executive Steve Davies also argued the “indefinite delays” to Victoria’s offshore wind program highlights the role natural gas should play in the future of energy.

“This decision highlights the importance of having multiple viable options for Australia’s future energy requirements,” he said.

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