A Federal Court ruling deeming logging in Victoria's Central Highlands illegal over its effects on critically endangered possums and gliders, has been overturned on appeal.
VicForests was found last year to have breached environment laws related to logging in 66 native forest coupes because of the effect on the greater glider and Leadbeater's possum.
The government-owned agency succeeded on Monday in its bid to overturn the judgment.
Federal Court appeal judges determined VicForests' logging operations complied with a regional forest agreement and consequently remained exempt from federal environment laws.
The Friends of Leadbeater's Possum charity, which brought the action against VicForests, said they were looking to appeal to the High Court.
"Logging in native forests is killing threatened species and destroying their critical habitat. Against this background, this morning's judgment is very disappointing," the group's president Steve Meacher said.
The original judgment in May 2020 prompted hotel and hardware giant Bunnings to stop stocking VicForests timber.
