NSW Farmers and group of rail and grain companies wrote to Environmental Minister Matt Kean last month warning that new noise and emissions rules "if not carefully designed and implemented...will result in rail freight operations ceasing by 2025" on the Boree Creek regional grain branch line.

Deputy Premier John Barilaro announced last week that the EPA had "re-thought" its new rules.

"The EPA had planned to introduce new environmental licensing for rail operators, which would gut the regional transport industry causing significant job losses across regional NSW," Mr Barilaro said.

"This would also mean grain would instead be primarily transported via truck resulting in more b-doubles on our regional roads, putting more lives at risk and impacting our road network.

"With fewer trains on rail and more trucks on our roads ironically this environmental proposal would increase carbon emissions, increase greenhouse gasses and increase the burning of fossil fuels."

The new rules would have come into effect in May and potentially taken many diesel locomotives out of service and added a costs to every tonne of grain moved.

NSW Farmers Wagga district branch chairman Alan Brown said halting the new rules was a common sense decision.

"It's a very good outcome," he said.

"Moving that sort of heavy freight by rail is by far the most efficient and effective means of doing it, plus it keeps out branch lines open.

"Farmers certainly need to be super efficient as you need always to maximise returns on grains rather than lose it on excessive freight costs."

Mr Barilaro said the new regulations would have affected companies like Southern Shorthaul Railroad, which operates in the Riverina.

"If the proposal was to proceed, companies like Southern Shorthaul Railroad who operate a fleet of 63 locomotives and employ 250 people would be left with only two locomotives which comply, costing the regional business $20 million to alter their fleet," Mr Barilaro said.

"Thankfully the EPA has now re-thought this flawed plan driven by green tape."

NSW Agriculture Minister Adam Marshall said the proposed changes would have increased the cost of freighting grain on average by $13 to $15 per tonne.

[It would have taken] cash out of farmers' pockets, who are already doing it tough enough managing the impacts of drought and bushfires," Mr Marshall said.

"The confusion surrounding this process simply reiterates the fact that city based bureaucrats need to get out of their offices and actually talk to people who will be impacted by their decisions.

"It's great that a common sense approach has been agreed to, and that the EPA and industry will work together on this issue moving forward."