NSW Government to prohibit development consent conditions relating to Scope 3 emissions

The NSW Government has introduced the Environmental Planning and Assessment Amendment (Territorial Limits) Bill 2019 (NSW) (Bill) into the NSW Parliament.

Key takeaways

• Consent authorities can no longer insert conditions of consent which would regulate downstream greenhouse gas (GHG) emissions.
• Downstream GHG emissions will no longer be a mandatory consideration for consent authorities. However, downstream GHG emissions may still be considered by consent authorities in determining development applications.
• Proponents of new projects, or modifications to existing projects, should continue to consider downstream GHG emissions as part of any environmental assessment of a proposed development.

Background

The Bill responds to recent decisions of the Independent Planning Commission (IPC), and recent NSW case law, which have either refused or imposed conditions on coal mining projects in part by reference to the impact of the proposed development on ‘downstream’ indirect or ‘Scope 3’ GHG emissions.

If passed, the Bill will amend the Environmental Planning and Assessment Act 1979 (NSW) (EP&A Act) and the State Environmental Planning Policy (Mining, Petroleum Production and Extractive Industries) 2007 (NSW) (Mining SEPP).

We explore the Bill and the context of its introduction below.

Amendment to the EP&A Act

The Bill proposes to amend the EP&A Act to prohibit conditions of development consent:

“for the purpose of achieving outcomes or objectives relating to –

1. 1. the impacts occurring outside Australia or an external Territory as a result of the development, or
   2. the impacts occurring in the State as a result of any development carried out outside Australia or an external Territory”

In the Second Reading Speech for the Bill, the Minister for Planning and Public Places stated that:

“…while consent conditions can quite appropriately relate to matters within Australia's territorial limits, there is clearly an enforcement issue with development conditions that purport to control impacts outside the jurisdiction of Australia.”

The Minister also referred to the recent decision of the IPC on the United Wambo Coal Project (Project), an open cut coal mine in the Hunter Valley. In that decision, the IPC imposed a condition of development consent that required the proponent to prepare a coal export management plan and use best endeavours to ensure that exported coal is supplied to Paris Agreement signatories, or to countries with similar policies in place.

During consultation on the Project, the NSW Government expressed concern about this type of condition. In submissions, the Department of Planning, Industry and Environment stated that it is not the policy of the Commonwealth or the NSW Government to regulate matters of international trade, or specifically to take any action to minimise or offset Scope 3 GHG emissions. This position was reaffirmed in the Second Reading Speech.

Amendment to the Mining SEPP

The Bill also proposes to amend clause 14 of the Mining SEPP.

Clause 14(1) requires consent authorities determining Mining projects to consider whether to impose conditions aimed at ensuring that a project is undertaken in an environmentally responsible manner.

Specifically, clause 14(1)(c) requires consent authorities to consider imposing conditions aimed at ensuring that GHG emissions are minimised to the greatest extent practicable.

In its present form, clause 14(2) requires consent authorities to consider GHG emissions in its assessment of mining projects generally, including downstream emissions.

The Bill proposes to remove the reference in clause 14(2) to downstream emissions so it is no longer a mandatory consideration.

The introduction of the Bill follows a number of recent planning decisions in NSW which have cited downstream GHG emissions as a reason for refusal of the proposed development, including:

• the Rocky Hill Coal Project by the NSW Land and Environment Court (see our June blog post); and
• the Bylong Coal Project by the IPC (see our September blog post).

Next steps

Debate on the Bill in the Legislative Assembly is currently adjourned but is expected to continue shortly.

Proponents of mining projects may take some comfort that downstream emissions will not be subject to the same level of scrutiny and consideration as has been applied by consent authorities to date. However, the Bill does not operate to prevent consent authorities from considering downstream emissions. It will simply no longer be a mandatory consideration.

Due to this, proponents of applications for new projects, or modifications to existing projects, should continue to consider downstream emissions as part of any environmental assessment of a proposed development.

We will monitor the Bill’s passage through the Parliament and report on any significant developments.

By Tom Dougherty, Senior Associate, and Nick Carey, Paralegal, Sydney.