The report also said an industrial precinct in the area could cause "significant adverse impacts to human health", however it judged this risk as "uncertain".
US environmental scientist Michael Petroni has modelled the potential impacts of the proposed petrochemical precinct. (Supplied: Michael Petroni)
The NT Environment Centre asked US environmental scientist Michael Petroni, who has developed risk analysis tools for industrial developments for the US Environmental Protection Agency, to model the Darwin project's potential impacts.
"One of the main sources of concern from the Darwin project is particulate matter emissions from these facilities," he said.
"Particulates are so small it can get into your bloodstream and can exacerbate health risks like cardiovascular disease or respiratory ailments.
"Over time, it's been well documented [that] populations living with high levels of fine particulate matter in their air have higher mortality rates."
Dr Petroni said a review of 16 studies into US Gulf Coast populations living within five kilometres of petrochemical facilities found negative impacts from chemicals the NT Government's referral report has listed as likely to be used on its precinct.
He claimed his modelling of the Darwin project found it could increase the risk of illness in nearby suburbs.
"There are toxic air emissions that are potentially cancer causing; formaldehyde and acetaldehyde are among the larger emission sources," Dr Petroni said.
'The evidence speaks for itself'
The Director of the NT Environment Centre Kirsty Howey is calling on both governments to drop the proposal, arguing it poses similar risks to notorious plants along the Mississippi River from Baton Rouge to New Orleans in the United States.
"The health impacts of precincts such as this are really well known across the world, in fact similar precincts have come to be known as Cancer Alley," she said.
"The evidence speaks for itself in terms of the impacts of these sorts of petrochemical facilities, and that's why we have obtained a report from an expert from the US to look at what sorts of impacts these facilities are producing right now in real time.
"This will [allegedly] cause huge impacts for the people of Palmerston and Darwin."
The Environment Centre NT's Kirsty Howey says the project poses similar risks to those posed by plants in the US. (ABC News: Tully Hemsley)
Government confident of risk mitigation
The Northern Territory government said the precinct would also include carbon capture and storage technologies, as well as hydrogen and mineral exports, deeming it a low emissions precinct that will create 20,000 jobs.
Chief Minister Natasha Fyles is confident pollution and health risks can be mitigated.
"Darwin Harbour is a pristine natural environment, but we do have it as a working harbour and we have industry that goes through robust environmental assessments before activities take place," she said.
"We do need to allow development so we have jobs."
The ABC asked the Federal Minister for Northern Australia Madeleine King how health and environment concerns about the project would be addressed.
Federal Resources Minister Madeleine King says she is confident the project can be achieved in an environmentally sustainable way. (ABC News: Matt Roberts)
"Environmental considerations are a priority in progressing development of the Middle Arm Sustainable Development Precinct," a spokesperson for the minister said.
"The Australian and Northern Territory Governments will continue to work together ensure the protection of environmentally significant animals, plants and habitats, to ensure the considerable economic benefits can be realised in an environmentally sustainable way."
Another independent expert, Clare Murphy, the Director of the Centre for Atmospheric Chemistry at the University of Wollongong, said Darwin has the worst air quality in Australia.
"That's due to savannah burning which happens all through the dry season," she said.
Ms Murphy said the petrochemicals precinct could potentially add significant risks to that.
"I would imagine there would be emissions of quite a lot of volatile organic chemicals; these compounds react in the atmosphere and create ozone and particulates, both of which are pretty bad for human health," she said.
"Formaldehyde, benzene, there are some carcinogenic compounds that I would imagine might be produced in a petrochemical plant.
"It does seem quite close to a population centre."
Mr Smith would at least like to see tough controls applied to the petrochemical companies. (ABC News: Tully Hemsley)
Dr Petroni does not think potentially harmful emissions from the precinct could be eliminated altogether, even if the most sophisticated technology available was used.
"That's not to say there isn't some creative process out there that a facility might be able to use, but it's unlikely that emissions will be completely negated at a manufacturing facility of this size," he said.
Mr Smith doesn't think objections to the project will stop it from going ahead, however, he is appealing to both governments to subject the companies which set up there to the toughest controls possible.
"Because there does need to be a consultative approach to how to do this to minimise the damage," he said.
