The agreement allows logging in north-eastern NSW native forests and covers the coastal area between Sydney and the Queensland border.

NEFA challenged the agreement in court arguing that when the RFA was renewed in 2018 for another 20 years, the Commonwealth did not assess climate change, endangered species or old-growth forests as it was required to.

The Environmental Defenders Office (EDO) and North East Forest Alliance (NEFA) on Wednesday, January 10, lost the legal challenge when the application was rejected by the Federal Court under the pretence these are matters for Government and not the courts.

Leading up to the decision, thousands of jobs were threatened with the risk that if the application succeeded, it could have led to the immediate suspension of forestry in NSW.

Macleay Valley resident and owner of Crescent Head Sawmill and Crescent Head Tree Specialist, Ethan Murphy says shutting down the hardwood timber industry wouldn't make sense.

"If we don't continue doing what we're doing then we're just going to ship it in from overseas, which would have a negative impact on sustainable harvesting," said Mr Murphy.

Mr Murphy moved his business to South Kempsey two years ago and says he has plenty of people who contact him regularly wanting to work locally, and numerous community members needing his services.

"There are many local projects in the area that need the timber our saw mill provides," he said.

"If the local sawmills didn't exist, I don't think the large establishments that import timber could keep up with the demand."

Member for Oxley, Michael Kemp, says hardwood timber is the backbone of the Mid North Coast and contributes significantly to the $2.9 billion industry.

"Hardwood timber can coexist within the parameters of conservation," said Mr Kemp.

"New South Wales forestry operations follow some of the strictest regulations and environmental standards across the world."

Mr Kemp echoes Mr Muprhy's concerns of shutting down the native timber industry, allowing for potential poor harvesting practices to prevail.

"The ideological rhetoric behind 'stop logging to save our species' is hypocritical and serves to endanger forests offshore because those industries do not share our Australian standards," said Mr Kemp.

Timber NSW Chairman Andrew Hurford says the Court's decision paves the way for those who are serious about achieving ecologically sustainable forest management.

"Power poles, pallets, railways sleepers, flooring, decking, cladding, ferry wharves - without an available supply of locally sourced timber all these products would have to be imported," said Mr Huford.

"The reckless opposition to the NSW timber industry increases the risk of forcing us down the Victorian path of paying more to compete for limited domestic supplies or importing timber from countries with inferior environmental protections.

"That will force up prices for Australian consumers, detract from Government emission reduction targets, and leave us dangerously exposed to global supply chain shocks."

Mr Hurford said NSW has some of the world's strictest regulations and highest environmental standards for forestry operations, all of which are overseen by the Environment Protection Authority.

"Of the 20 million hectares of forest in NSW, less than a third of one per cent is selectively harvested annually.

"On the NSW north coast, that is an average of just six trees in every 10,000 that are harvested each year and then regenerated."

AWU National Secretary Paul Farrow said the ruling was a major win for workers.

"This reckless legal challenge could have risked thousands of workers' livelihoods by bringing an entire industry to its knees," he said.

"Australia is in the worst housing crisis in living memory yet the EDO wanted to disrupt the supply of the material used in most house frames."