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Road to COP29: Our insights
The 28th Conference of the Parties on Climate Change (COP28) took place on November 30 - December 12 in Dubai.
Australia | Publication | giugno 2024
This article was co-authored with Tiffany Austin.
The NSW Environment Protection Authority (EPA) recently released for public comment its draft Climate Change Assessment Requirements (CCARs) and draft Guide for Large Emitters (Guide).
The CCARs and Guide propose to establish requirements for proponents of projects in NSW that are anticipated to have significant greenhouse gas (GHG) emissions to assess those emissions and mitigation opportunities as part of the environmental impact assessment (EIA) process to obtain planning approval under the Environmental Planning and Assessment Act 1979 (NSW) (the Act). It is likely that the CCARs and Guide will apply to coal projects and other large-scale mining, conventional energy production, landfills and waste management facilities, and chemical production facilities.
The EPA intends to recommend that CCARs are included in the Planning Secretary's Environmental Assessment Requirements (SEARs) for projects which are likely to produce large amounts of GHG emissions. Where included in SEARs for a project, the CCARs will require that:
The proponent must carry out a Greenhouse Gas (GHG) Assessment and prepare a Greenhouse Gas Mitigation Plan in accordance with the EPA’s Greenhouse Gas Assessment Guide for Large Emitters (available on the EPA website).
The Guide makes it clear that the CCARs are to be recommended for both new projects likely to produce large amounts of GHG emissions, and for modifications to existing projects (the effect of which is that the project will likely produce large amounts of GHG emissions). According to the Guide, a project will be considered a large emitter, and therefore subject to the CCARs and Guide, if it meets the following three criteria:
The Guide supports proponents by setting out the GHG assessment and mitigation requirements to be addressed in the EIA and approvals process of projects with large emitter status and assists in undertaking the required GHG Assessment and preparing the required Greenhouse Gas Mitigation Plan (GHG Mitigation Plan) contemplated in the CCARs.
The Guide also supports the EPA and the consent authorities by providing a framework against which they review the adequacy of GHG assessments, although it is not intended for the Guide to limit or fetter any statutory powers.
Projects likely to emit above the NGER Act facility threshold of 25,000 tonnes of scope 1 and 2 GHG emissions (calculated as CO2-e) in any financial year during the operational life of the project (based on planned operational throughput and as designed) will be regarded as large emission projects, where subject to the requirement to obtain a development consent or other planning approval, and an EPL.
The GHG assessment boundary for the project defines which emission sources and activities are included in the assessment and which are excluded. When a project involves a modification to an existing operation, the 25,000 tonne CO2-e threshold applies specifically to the activities falling within the GHG assessment boundary and not to the whole operation. The assessment boundary must be defined to account for the impact of the project on emissions elsewhere in the facility.
To ensure alignment with the NGER Act, project emission estimates must include energy savings measures and emission mitigations planned for in the project design. However, carbon offsets will not be counted towards the threshold criteria.
In assessing whether project emissions may exceed the NGER facility threshold, the Guide specifies that:
Where the CCARs apply, a proponent is required to carry out a GHG Assessment. The purpose of this assessment is to provide detailed information about potential GHG emissions associated with the project. The Guide provides detailed guidance on the steps required when preparing a GHG Assessment Report. We summarise the main components of these steps below:
Describe the GHG assessment boundary for the project accounting for GHG emissions associated with all relevant stages of the project. Projects involving new operations and modifications to existing operations should develop emission projections that address all sources within the assessment boundary. For proposed modifications, a ‘project only’ scenario must include both:
Where a project involves a modification to existing activities, the GHG assessment must include a ‘business-as-usual’ scenario and a ‘modified-business’ scenario.
Identify all sources of scope 1, 2, and 3 emissions within the assessment boundary and prioritise emissions sources for mitigation. The GHG Assessment must include all relevant GHGs regulated under the NGER Act, being carbon dioxide (CO2), methane (CH4), nitrous oxide (N2O), sulphur hexafluoride (SF6), hydrofluorocarbons (HFCs), and perfluorocarbons (PFCs).
Identify and select measures to avoid and mitigate emissions from the project. The EPA expects proponents to apply the mitigation hierarchy to first avoid and then reduce GHG emissions as much as possible, before finally offsetting residual emissions to meet emission reduction objectives. The feasibility and effectiveness of mitigation measures is to be assessed, including cost-recovery options.
Give emissions estimates for the proposed project design, considering planned and committed emissions avoidance and mitigation measures. The GHG Assessment must provide annual estimates of:
The GHG Assessment must address:
Carbon offsets must be used only for residual emissions that cannot be avoided or reduced, with the purpose of achieving the specified emission goals. Domestic offsets under the Safeguard Mechanism, as well as voluntary offsets purchased for residual emissions may contribute to a proponent’s overall commitments in their GHG Mitigation Plan.
Carbon offsets must meet offset integrity principles having regard to the integrity standards and principals set out in the Commonwealth Carbon Credits (Carbon Farming Initiative) Act 2011 and the Climate Active Carbon Neutral Standard for Organisations.
For projects with scope 1 and 2 emissions exceeding 100,000 t CO2-e per year at any time of the operational life, mitigation assessments must be the subject of independent expert review.
A proponent is also required to develop a GHG Mitigation Plan to reflect the analysis and findings of the GHG Assessment. A template for the GHG Mitigation Plan is provided in the Guide.
The GHG Mitigation Plan must address:
Existing large GHG emitters are not forgotten in the Guide, which notes that under Action 5(b) of the EPA’s Action Plan, large GHG emitters holding an EPL will soon be required to prepare a Climate Change Mitigation and Action Plan (CCMAP). The CCMAP will incorporate and expand on the GHG Mitigation Plans required by the Guide for new proposed developments. Guidance on CCMAPs is currently being prepared by the EPA.
Projects that are not anticipated to be large emitters - those that will have scope 1 and 2 GHG emissions below the 25,000 tonnes of CO2-e threshold - are not to be covered by the CCARs and Guide. However, the Guide notes that the EPA is preparing a General Greenhouse Gas Assessment Guide (GGAG) which will set out general requirements for projects not projected to result in large emissions. We anticipate that the GGAG will also apply to projects that require development consent and an EPL.
The proposed CCARs and Guide will be under public consultation until 5pm on Monday, 1 July 2024. Please contact us if you would like to discuss the implications of the CCARs and Guide on your existing and future projects or would like assistance in preparing a submission to the EPA.
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