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After the publication of our article, the EPA has withdrawn the Guideline on GHG Emissions and has stated that this Guideline will be subject to further stakeholder consultation. It remains to be seen what changes, if any, will be made to the Guideline to provide greater certainty for a number of major projects currently in the pipeline.
On 7 March 2019, the Western Australian Environmental Protection Authority (EPA) released its ‘Environmental Factor Guideline – Greenhouse Gas Emissions’ (the Guideline) and ‘Technical Guidance – Mitigating Greenhouse Gas Emissions’ (the Guidance Material). The EPA also made related updates to its ‘Statement of Environmental Principles, Factors and Objectives’ (the Statement) and ‘Environmental Factor Guideline – Air Quality’. It comes after the recent NSW Land and Environment Court decision of Gloucester Resources Limited v Minister for Planning.
The new material and updates set out the EPA’s updated approach towards the assessment of greenhouse gas (GHG) emissions of proposals assessed under the Environmental Protection Act 1986 (WA) (the Act). The EPA considers that its updated approach is required given the absence of effective national mechanisms to achieve Australia’s international commitments with respect to GHG emissions. However, the EPA stated it will revise its policy position if GHG emissions are adequately regulated through other mechanisms in the future.
As part of assessing a proposal under the Act, the EPA considers the environmental factors that may be impacted by the proposal and assesses whether the proposal may be significant by having regard to the objective the EPA has developed for each of those factors.
The updates made to the Statement and the Guideline establish GHG emissions as a separate environmental factor to be considered. The EPA’s objective for this factor is to mitigate GHG emissions and consequently minimise the risk of contributing to climate change. The focus of this new factor is therefore the potential for a proposal’s GHG emissions to contribute to State and national GHG emissions and how GHG emissions are mitigated.
The Guidance Material details how GHG emissions are considered by the EPA in the environmental impact assessment (EIA) process for a proposal. The scope of the Guidance Material is confined to the effects of carbon dioxide, methane, nitrous oxide, sulphur hexafluoride and specified kinds of hydro fluorocarbons and perfluorocarbons.
A proposal with direct (scope 1) GHG emissions of more than 100,000 tonnes per annum will be required in the EIA process to describe the emissions associated with the proposal and to outline management measures for the emissions consistent with the EPA’s mitigation hierarchy of ‘avoid, reduce, offset’. This will require proponents to describe the direct (scope 1) and indirect (scope 2) GHG emissions on a yearly basis and over the life of the proposal, the breakdown of the GHG emissions by source, the projected emissions intensity for the proposal, and the proposed measures to avoid, reduce or offset the emissions. The EPA may also seek information on scope 3 GHG emissions where there is a proximate link between the proposal and emissions from downstream consumption, and where scope 3 GHG emissions will be relatively large compared to scope 1 and 2 GHG emissions. This requirement in respect of scope 3 GHG emissions will be particularly important for fossil fuel developments.
Proponents will also be required to demonstrate that all reasonable and practicable design measures have been considered to avoid and reduce GHG emissions at the time of seeking approval for a proposal. This may require proponents to obtain independent technical advice or peer review from appropriately qualified analysts. The EPA will also expect proponents of a proposal with substantial GHG emissions to explicitly address in their GHG abatement plans continuous improvement measures for the proposal and to report on opportunities identified and implemented to minimise GHG emissions.
Proponents of a proposal with direct (scope 1) GHG emissions in excess of 100,000 tonnes per annum will also be required to offset any residual direct emissions associated with the proposal. The offsets implemented will need to meet the offset integrity principles set out under the National Carbon Offset Standard. The EPA will generally not require a proponent to offset residual scope 2 GHG emissions and will not require a proponent to offset scope 3 GHG emissions. If a proposal will have substantial GHG emissions, the EPA will also require the proponents to publicly report metrics related to those emissions which are not currently addressed by the National Greenhouse and Energy Reporting Act 2007 (Cth).
The Guidance Material applies to all new proposals and changes to proposals, including those currently under assessment. The EPA has envisioned that there will be a transition period to allow proponents sufficient time to develop and implement their avoidance, reduction and offsetting plans.
If the EPA assesses a proposal under the Act, it is required to prepare a report for the Minister setting out the EPA’s recommendations for whether or not the proposal may be implemented and any conditions that should be imposed. This report (and any public appeals made in respect of the EPA’s report) are then usually considered by the Minister in determining whether a proposal may be implemented and, if so, the conditions to be imposed.
While the Guideline and Guidance Material are not statutory instruments, they may ultimately need to be complied with by proponents as failure to do so may result in the EPA recommending that a proposal may not be implemented, or that restrictive conditions should be imposed on the proposal.
However, the Western Australian Premier, the Honourable Mark McGowan MLA, has stated that the Guideline and Guidance Material do not reflect State Government policy. As such, it is unclear how the Minister responsible for the Act will approach a proposal that the EPA has recommended may either not be implemented (for failure to comply with the requirements of the Guideline and Guidance Material and/or unacceptable GHG impacts), or alternatively should be implemented subject to conditions relating to GHG emissions, including a requirement to offset direct GHG emissions.
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