NSW and QLD join WA in developing tougher guidelines to assess the greenhouse gas emissions of projects

GHG emissions guidelines for environmental impact assessment have come into effect in Queensland, with draft guidelines also introduced in NSW, continuing a national trend towards more vigorous assessment of large projects by consent authorities.

Snapshot

• Queensland (QLD) and New South Wales (NSW) have joined Western Australia (WA) in introducing final and draft guidelines, respectively, for the assessment of the greenhouse gas (GHG) emissions of proposed and modified projects.
• The assessment guidelines will require proponents of projects to prepare more robust documentation with the assistance of independent experts, to provide accurate and extensive modelling of GHG emissions.
• Proponents will be required to provide plans to avoid, reduce, substitute and offset GHG emissions for the whole life of a project.
• The guidelines are aligned with Australia’s National Greenhouse and Energy Reporting scheme and Safeguard Mechanism, and international environmental regulations.

• Businesses and proponents of large projects should consider the implications of the QLD guidelines and whether to make a submission in response to the NSW draft guidelines.

Background

In April 2020, WA introduced the ‘Environmental Factor Guideline – Greenhouse Gas Emissions’ (WA Guideline) to communicate how GHG emissions of proposed projects are to be considered by the WA Environmental Protection Authority (EPA) in WA’s environmental impact assessment (EIA) process.  

The WA Guideline was reviewed following two years of operation and a revised draft published for consultation in July 2022. We commented on this draft at the time in our blog here.  

The revised WA Guideline was subsequently introduced in April 2023. As outlined in our blog here, the WA Guideline requires proponents to:

• demonstrate in a GHG Management Plan how Scope 1, 2 and 3 emissions from projects are consistent with a global transition to net zero by 2050;
• provide credible estimates of GHG emissions, including consideration of the location of, and emissions reduction regulations applying to, upstream and downstream Scope 3 emissions that occur as a consequence of proposed activities; and
• have independent expert reviews demonstrating the adoption of best practice measures.

QLD and NSW have now followed suit with QLD implementing its own GHG guidelines on 15 May 2024, and NSW publishing draft GHG guidelines for consultation on 20 May 2024. Like WA, each guideline is intended to inform the EIA process for new and modified projects.

This note introduces the key changes that businesses and proponents of projects should be aware of as a result of QLD and NSW’s GHG emission guidelines.

National Context

Each guideline acknowledges the importance of ensuring project emission estimates can be compared to the National Greenhouse and Energy Reporting scheme (NGER) and Safeguard Mechanism, established by the National Greenhouse and Energy Reporting Act 2007 (Cth). For example, each guideline:

• adopts the NGER’s ‘facility threshold’ of 25,000 tonnes or more of CO2-e GHG emissions per year as a measure to define ‘large’ / ‘high’ emitting project; and
• considers the Safeguard Mechanism’s application to Australia’s highest emitting industrial facilities likely to emit 100,000 tonnes or more of CO2-e GHG emissions per year.

It is likely that these guidelines will be followed by reform to the assessment of GHG emissions in the Commonwealth assessment and approval processes. The federal government is imminently commencing consultation on ‘Stage 3’ of its Nature Positive Plan (NPP), which is expected to overhaul the environmental offsets framework and introduce climate-related reforms. You can learn more about Stage 3 of the NPP in our recent blog here.

QLD

Background

On 15 May 2024, following a process of external consultation, the Queensland Department of Environment, Science and Innovation, released the final Greenhouse Gas Emission Guideline (QLD Guideline).

The QLD Guideline provides the GHG emission assessment requirements for resource and other prescribed environmentally relevant activities when applying for new or amended environmental authorities (EAs) under the Environmental Protection Act 1994 (Qld) (EP Act). The QLD Guideline states that it may also be considered by the Coordinator-General when considering environmental impact statements for coordinated projects.

Notably, the QLD Guideline has regard to:

• QLD’s renewable energy targets of 50% by 2030 and 80% by 2035 under the Energy (Renewable Transformation and Jobs) Act 2024 – see our previous blog on these reforms here;
• QLD’s targets under the Clean Economy Jobs Act 2024 (QLD) to reduce GHG emissions by 30% by 2030 and 75% by 2035 on 2005 levels, and to achieve net zero by 2050 - see our previous blog here; and
• a range of domestic and international principles of environmental policy and existing government requirements on sustainable development.

Who does the QLD Guideline apply to?

The QLD Guideline applies to two categories of projects based on expected GHG emissions being:

• ‘medium’ and ‘high’ emitters: projects with 25,000 tonnes or more of Scope 1 and Scope 2 CO2-e GHG emissions per year; and
• ‘low’ emitters: projects with less than 25,000 tonnes of Scope 1 and Scope 2 CO2-e GHG emissions per year.

Applications for EAs for projects with medium to high emission expectations should include:

• an emission inventory identifying the stage of the project and sources of GHG emissions (Scope 1, 2 and 3);
• GHG emission mitigation and management practices;
• a GHG abatement plan, including how the applicant proposes to prevent or minimise adverse impacts by avoiding, reducing, substituting and offsetting GHG emissions; and
• a risk assessment outlining the expected GHG emissions from project activity. The risk assessment must outline how the expected emission will impacts climate change and QLD’s environmental values.

Low emitting projects are also required to satisfy the above in their EA applications, but are not required to submit a GHG abatement plan or have regard to Scope 3 emissions.

NSW

Background

NSW has now released its own Draft Climate Change Assessment Requirements and Guide for Large Emitters (Draft Large Emitters Guide), which have been developed in light of NSW’s:

• Climate Change Action Plan 2023-2026;
• Climate Change (Net Zero Future) Act 2023 (NSW) (Net Zero Act) – see our previous blog here;
• Net Zero Plan Stage 1:2020-2030; and
• the new statutory duties within s 9 of the Protection of the Environment Operations Act 1979 (NSW) (POEO Act) – we have previously written on these reforms here.

Who will the Large Emitters Guidelines apply to?

The Draft Large Emitters Guide will apply to new projects or modifications to existing operations that are likely to emit 25,000 tonnes or more of Scope 1 and 2 GHG emissions in any financial year during the operational life of the project.

Projects that are likely to emit less than that emissions threshold will be subject to the General Climate Change Assessment Requirements, which will be the subject of the (yet-to-be finalised) Draft General Greenhouse Gas Assessment Guide.

What will the Large Emitters Guide require?

The NSW EPA proposes that ‘large emitters’ must, as part of the EIA process under the Environmental Planning and Assessment Act 1979 (NSW), carry out a GHG Assessment and prepare a GHG Plan in accordance with the Draft Large Emitters Guide.

Specifically, the Draft Large Emitters Guide provides that a 'large emitter' must:

1. prepare a GHG Assessment Report, accompanied by a GHG Mitigation Plan, that:
   • identifies all sources of Scope 1, 2 and 3 emissions (including emissions from existing operations);
   • assesses and selects mitigations to avoid, reduce, substitute and offset emissions (if Scope 1 and 2 emissions exceed 100,000 tonnes CO2-e / year at any time, a mitigation assessment verified by an independent expert review must be provided);
   • estimates emissions once mitigations have been applied;
   • sets long-term and interim emissions goals for the project; and
   • addresses all relevant guiding principles in s 8 of the Net Zero Act.
2. prepare a Climate Change Mitigation and Adaptation Plan (the EPA is preparing a separate guide for the preparation and implementation of these plans).

When can I have a say on the Draft Large Emitters Guide?

The Draft Large Emitters Guide is open for consultation until 1 July 2024.

You can have your say on the Draft Large Emitters Guide here.

Key takeaways

The GHG assessment guidelines introduced by QLD and proposed by NSW:

• will require project applicants to provide detailed information about GHG emissions including abatement plans that apply for the project life.
• will require the input of expert advice to verify emissions estimates, particularly for higher emitting projects.
• may create a more complex and delayed planning assessment and approval process for major projects.
• aim to align the project emissions with international, Commonwealth and State emission targets.
• are likely to be complemented by climate-related reforms within Stage 3 of the Commonwealth’s NPP.

If you would like to learn more about how the above amendments may impact your business or projects, please contact our National Environment, Planning and Communities Team.

 

By Peter Briggs, Partner, Melanie Debenham, Partner, Kathryn Pacey, Partner, Andrew Mahler, Solicitor, and Isabella Badesso, Graduate.