WA EPA releases its revised guideline on the assessment of greenhouse gas emissions

Articles Written by Samantha Daly (Partner), Tom Barrett (Senior Associate)

More than a year after the Western Australian Environmental Protection Authority (EPA) withdrew its initial guidance material on its approach towards the assessment of greenhouse gas (GHG) emissions of proposals assessed under the Environmental Protection Act 1986 (WA) (Act), the EPA has released an updated guideline on its approach to GHG emissions assessment.

The EPA withdrew its initial guidance material in March 2019 amid concern from industry around the lack of opportunity it had to provide input into the material.  Following the withdrawal of the initial guidance material, the EPA undertook a comprehensive consultation process with industry and the community, which included the release of a draft guideline in December 2019. 

During that consultation process, the Western Australian government released its ‘Greenhouse Gas Emissions Policy for Major Projects’.  In the policy, the government committed to working towards achieving net zero GHG emissions by 2050.  A key aspect of the policy was it indicated that the Minister would consider applying to any proposal with scope 1 emissions of more than 100,000 tonnes of carbon dioxide equivalent per year a condition which would require the proponent to provide a Greenhouse Gas Management Plan that detailed the proponent's contribution towards achieving the government's net‑zero GHG emissions aspiration.

The EPA released its revised ‘Environmental Factor Guideline – Greenhouse Gas Emissions’ (Guideline) on 16 April 2020, along with related updates to its ‘Statement of Environmental Principles, Factors and Objectives’ (Statement) and its ‘Environmental Factor Guideline – Air Quality’.

Establishment of GHG emissions environmental factor

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, together with the Guideline, re-establish GHG emissions as a separate environmental factor to be considered.  The EPA’s objective for this factor is ‘to reduce net GHG emissions in order to minimise the risk of environmental harm associated with climate change.’

Purpose of the Guideline

The Guideline outlines how and when the EPA will consider GHG emissions in the environmental impact assessment (EIA) process for a proposal referred to it for assessment under the Act. 

The EPA has determined that the combination of its objective under the Act to use its best endeavours to protect the environment and prevent, control and abate pollution and environmental harm, the link between GHG emissions and the risk of climate change, and that a warming climate will impact the Western Australian environment, permits the EPA to consider the effects of proposals which will increase GHG emissions in Western Australia.

The Guideline notes that its intent is to inform the development and assessment process of a proposal and not to determine the outcome of the EPA’s assessment, and that the Guideline does not bind the EPA’s assessment.

Consideration of GHG emissions and application of the Guideline

The Guideline states that GHG emissions from a proposal will generally be assessed if the proposal will exceed 100,000 tonnes of carbon dioxide equivalent scope 1 GHG emissions per year, and that the EPA will use the Guideline in assessing new proposals (including expansions), as well as in assessing changes to existing proposals that will result in an increase in GHG emissions.

Nevertheless, the EPA notes in the Guideline that it will continue to assess proposals on a case-by-case basis and that it recognises the importance of a flexible approach.

Considerations for EIA process

The Guideline states a proponent should give consideration to the following matters as part of its consideration of the GHG emissions factor for the EIA process:

  • the mitigation hierarchy of avoiding, reducing and offsetting GHG emissions;
  • the interim and long-term GHG emissions reduction targets the proponent proposes to achieve;
  • the adoption of best practice design, technology and management appropriate to mitigate GHG emissions; and
  • whether the proposed mitigation actions are plausible, timely, achievable and all that is reasonable and practicable.

Information required for EIA process

The Guideline notes that, if the EPA identifies GHG emissions as a preliminary key environmental factor for a proposal and applies the Guideline, the EPA may require the proponent to provide the following:

1.         Information on estimated emissions

The EPA may request a proponent to provide credible estimates of the scope 1, scope 2 and scope 3 GHG emissions for the proposal, on an annual basis and over the life of the proposal.  The EPA may also request a breakdown of GHG emissions by source (such as stationary energy, fugitives, transport, and emissions associated with changes to land use), and the projected emissions intensity for the proposal (as well as benchmarking against other comparable projects).

2.         Greenhouse Gas Management Plan

If the EPA applies the Guideline to a proposal, it will require the proponent to develop a Greenhouse Gas Management Plan as part of the EIA process.  The Guideline notes that the plan will need to demonstrate the proponent’s contribution towards the aspiration of net zero GHG emissions by 2050 and that the plan should outline the:

  • intended reductions in scope 1 GHG emissions over the life of the proposal;
  • regular interim and long-term targets that reflect an incremental reduction in scope 1 GHG emissions over the life of the proposal; and
  • strategies which demonstrate that all reasonable and practicable measures have been applied by the proponent to avoid, reduce and offset a proposal’s scope 1 GHG emissions over the life of the proposal.

In the Guideline, the EPA notes its support for periodic public reporting by a proponent against the interim targets contained in its Greenhouse Gas Management Plan.  Unfortunately, the Guideline is unclear on whether this will be mandatory.  In any event, the EPA states that it will consider undertaking periodic State-wide reporting to provide public advice on GHG emissions and the progress of mitigation measures developed and implemented by major proposals.

3.         Information on measures to avoid, reduce and offset GHG emissions

The EPA may request a proponent to provide information which demonstrates the proponent has taken all reasonable and practicable measures to avoid, reduce and offset GHG emissions.  In this regard, the EPA may request a proponent to provide information relating not only to the measures that the proponent has proposed but also to the other measures that it considered.

The information expected by the EPA in relation to this aspect includes:

  • identification of the latest technologies and environmental management procedures available at the scale of the proposal;
  • evidence that the proposed technologies and procedures are capable of achieving the stated GHG reductions;
  • evidence that proposed mitigation measures are effective;
  • identification of the local conditions and current circumstances of the proposal that might influence the choice of technologies or procedures to mitigate GHG emissions; and
  • the feasibility and availability of any additional abatement and offsets.

If information about the abatement actions contemplated by the proponent is commercially sensitive, the proponent will be able to request that the EPA treat such information as confidential and not make it publicly available.  A proponent will, however, need to justify the sensitivity of the information.

EPA position on carbon offsets

If a proponent will implement carbon offsets for a proposal, the EPA expects that the offsets will meet offset integrity principles and be based on clear, enforceable and accountable methods.  The EPA considers that Australian Carbon Credit Units issued under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth) meet such standards.

The Guideline also notes that compliance offsets pursuant to the emissions reduction safeguard mechanism applying under the National Greenhouse and Energy Reporting Act 2007 (Cth), as well as voluntary offsets purchased to reduce residual emissions, may contribute to a proponent’s Greenhouse Gas Management Plan and will be recognised by the EPA.

Final thoughts

While the Guideline overall adopts a more pragmatic approach to the assessment of GHG emissions from proposals, it remains to be seen how the EPA will implement the Guideline in practice.  In particular, the requirement for a Greenhouse Gas Management Plan to demonstrate how a proponent will contribute towards the aspiration of net zero GHG emissions by 2050 may be used by the EPA to coerce proponents to undertake greater levels of abatement than they otherwise would.  

Whilst a proponent may be required to provide credible estimates of the scope 2 and scope 3 GHG emissions from its proposal, it is important to note that a Greenhouse Gas Management Plan only needs to relate to scope 1 GHG emissions.  This is critical for resources projects in Western Australia and appears to be in recognition that scope 1 GHG emissions are a direct result of an activity and therefore the proponent has a far greater ability to manage and mitigate those emissions than it does for scope 2 or scope 3 GHG emissions.

The release of the Guideline and update of the Statement is timely given the Environment Defender's Office has recently brought proceedings against the NSW Environment Protection Authority which seek to force the authority to establish a climate policy on the basis of the authority’s statutory role, which includes a requirement for the authority to prepare policies to protect the environment.

Important Disclaimer: The material contained in this article is comment of a general nature only and is not and nor is it intended to be advice on any specific professional matter. In that the effectiveness or accuracy of any professional advice depends upon the particular circumstances of each case, neither the firm nor any individual author accepts any responsibility whatsoever for any acts or omissions resulting from reliance upon the content of any articles. Before acting on the basis of any material contained in this publication, we recommend that you consult your professional adviser. Liability limited by a scheme approved under Professional Standards Legislation (Australia-wide except in Tasmania).

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