A planning inspector has said councillors making decisions in Bristol should not consider global green issues in their deliberations.
Plans for a power station at Avonmouth burning vegetable oil were rejected in February for "environmental reasons".
Councillors cited the impact of the oil production in Indonesia on rainforests, but the company W4B, appealed.
The council's lawyers put forward a challenge to the inspector and the hearing continues.
Opening an inquiry into the application inspector Trevor Cookson said the council had to focus on local issues.
The company, W4B, plans to generate up to 50 megawatts (MW) of electricity - enough to power some 8,000 homes - by burning vegetable oil, including palm oil, at its new plant.
Because the site is already an industrial area, there had been few objections to the development locally.
Opening the inquiry on Tuesday Mr Cookson said he would not be considering any evidence about the impact of the fuel oil on tropical rainforest.
He said: "The remit of planners is purely the impact of the power plant on the local area, and not the sustainability of the fuel source itself."
Mr Cookson then cited several planning guidelines to back his view, but accepted a legal challenge by lawyers for Bristol City Council.
Lawyers for W4B will now respond to the council's argument on Wednesday and then the inspector will make his final ruling.