An update on the federal EPA and what it means for you

In a snap shot, what does it mean for you?

Whilst the specifics of how the Plan will be implemented remain unclear, businesses operating with or requiring federal environmental approvals should start preparing for environmental law and regulatory reform in 2023.

Some of the actions you can take to prepare for the reforms set out in the Plan include:

1. Ensure adequate budgets for 2023 and beyond, to allow for updates to internal approval frameworks to account for the upcoming changes;
2. Review the data that has been collected, and consider the implications of its disclosure for existing projects involving studies of water or environmental impact;
3. Prepare for the need to assess scope 1 and 2 (and possibly scope 3) emissions for new projects;
4. Consider alternatives that may exist to traditional environmental offsets, such as onsite mitigation or planting for new or planned projects, requiring EPBC Act approval; and
5. As a new regulator with an enforcement and compliance mandate may soon be in existence, review existing project approvals and ensure compliance has been achieved and is being maintained.

Key aspects of the Plan

We summarise the key aspects of the Plan below.

A new independent federal EPA

As discussed in the August podcast, a key election promise of the Government was the establishment of an independent federal EPA.

The Plan provides further detail on its likely functions, which will include:

• Compliance and enforcement of federal environmental legislation, including regarding wildlife trade, sea dumping, ozone and synthetic greenhouse, gas management, hazardous waste, product emissions, recycling and waste reduction, and underwater cultural heritage acts;
• Project assessments and decisions;
• Environmental permits and licences issued by the federal Government; and
• Post-approval regulation.

A federal EPA, with a mandate to actively enforce and regulate federal environmental law compliance, will mean that businesses may need to update environment assessment frameworks or amend their operations or approvals to ensure that they avoid regulatory action for non-compliance

National Environmental Standards

New National Environmental Standards (NES) will be developed, which are intended to benchmark environmental outcomes. Standards will be developed for:

• Matters of national environmental significance under the EPBC Act;
• First Nations engagement and participation in decision-making;
• Community engagement and consultation;
• Regional planning; and
• Environmental offsets.

Existing bilateral agreements (between the federal Government and State/Territory Governments) are planned to be subject to the new NES.

Climate Change Disclosures and considerations

The new EPBC Act approvals will require proponents to publish estimates of their expected Scope 1 and 2 emissions over the life of the project and disclose how their project aligns with Australia’s national and international climate change obligations.

Environmental Offsets reform

The ‘National Environmental Offsets System’ is to be released imminently, and will track and report the use and delivery of environmental offsets. The offsets are proposed to not only offset environmental loss but aim to achieve overall net environmental gains.

‘Averted loss’ offsets (i.e. protecting one patch of existing habitat in exchange for clearing or loss of another) are earmarked to be largely discontinued. However, a new hierarchy for offsets is proposed to:

• Avoid harm to the environment;
• Reduce or mitigate environmental damage;
• Identify offsets within the region that deliver a net gain for the imperilled plants or animals; and
• Make a conservation payment to enable a net positive environmental outcome.

Expansion of the Water Trigger

The ‘water trigger’, which currently applies to large coal mining and coal seam gas activities under the EPBC Act, will be expanded to include all forms of unconventional gas such as shale and ‘tight’ gas (ie low permeability sandstone reserves producing primarily dry natural gas).

Nuclear Regulation Reform

Nuclear regulation will be reformed to create consistency across federal and state regulatory schemes.

Nature Repair Market

A ‘nature repair market’ will be established to facilitate investment in environmental restoration projects. This market will recognise landholders who restore or manage local habitat by granting them biodiversity certificates, which can then be sold to other parties.

Focus on environmental and climate change data

A new ‘Data Division’ is to be created, within the Department of Climate Change, Energy, Environment, and Water, to ensure the accuracy and accessibility of environmental data.

Regional Planning

Regional planning agreements are being proposed between State/Territory and federal Governments. These agreements will form the basis for any applicable Regional Planning Standard which must be complied with under a reformed EPBC Act.

Conservation Planning Reform

Conservation planning processes for listed threatened species and ecological communities under the EPBC Act will be streamlined. This may flag a ‘phasing out’ of the current conservation plans and conservation advices.

Merits review under the EPBC Act?

The Plan confirms that the Government will not adopt all of the Samuel Review recommendations.  In particular, the recommendation to expand the standing for a limited merits review of decisions made under the EPBC Act has not been adopted.

This decision has drawn criticism from some environmental groups.

What happens next?

We expect the draft legislation introducing these reforms to be circulated in the first quarter of 2023. However, many of the reforms still require further development and consultation, including with States and Territories, implying that there may be extensions to the timeline.

If you have any questions about these reforms and how they may impact your business, please contact Elizabeth Wild or Elisa de Wit.