The multi-day "protestival" near the Port of Newcastle ramped up on Friday morning with participants attempting to occupy parts of the harbour and the foreshore with a flotilla of kayaks.
More than 300 people entered the water and began paddling out just after 11am, as part of a planned blockade.
Police launched a tug boat and put several buoys in place to contain the protesters in a small area.
Rising Tide Community Organiser Zack Schofield said the event sent a powerful message governments could not ignore.
"The people-powered movement to stop new coal and gas is unstoppable and building momentum," he said.
Marine tracking websites showed a bulk carrier left the port during the protest and another was on its way to dock on Friday afternoon.
Police flagged concerns over the event, arguing similar action in 2023 resulted in the arrest of nine people who refused to exit the water at an agreed time.
Friday's event followed a last-minute legal challenge when Rising Tide overturned a government-ordered "marine exclusion zone" which would have prevented protesters from paddling out.
The Minn's government tried to shut down The People's Blockade but the Supreme Court ruled the government's exclusion zone notice had excluded the public from the water and was beyond the powers of the Marine Safety Act.— RisingTideAustralia (@RisingTideAus) Our 50-hour flotilla will commence tomorrow! pic.twitter.com/x2yJ5MOr2tNovember 21, 2024
NSW Police Commissioner Karen Webb said the protest was still unlawful, a reference to an earlier decision to deny organisers a permit.
"It is still against the law to disrupt a shipping line ... but we're very prepared," she said.
The exclusion order included an $1100 fine for anyone entering the water and a $3300 fine for anyone in the vicinity who did not follow directions.
Rising Tide lawyer Felicity Graham argued the purpose of such zones was to protect public safety during "special events" on waterways, not prevent them from happening.
The flotilla of kayaks took to the water of Nobbys Beach on Friday morning. (Michael Gorton/AAP PHOTOS)
During the hearing, protest organiser Alexa Stuart agreed Rising Tide promoted civil disobedience and said some of those at the event might break the law to attract publicity.
The event near the Port of Newcastle also includes live music and other activities to amplify calls to end the expansion of fossil fuel use.
Hundreds of children joined the action and rallied outside Customs House for a School Strike for Climate before joining the harbourside festival on Friday.
Frankie Kelly, a 12-year-old primary school student, has been participating in the events.
The action at Newcastle has been dubbed a "protestival" with various activities taking place. (Michael Gorton/AAP PHOTOS)
"It is scary knowing that I am growing up into a world that is severely affected by climate change, especially when the government continues to approve new coal and gas projects," she said in a statement.
"But I feel a little bit better knowing there are people at the strike who will join us in fighting for climate justice."
Former federal environment minister and Midnight Oil frontman Peter Garrett will be part of the live music line-up.
Rising Tide wants an end to new coal and gas approvals and a 78 per cent tax on coal and gas exports to help fund the energy transition.