NSW continues to take tentative steps to regulate dangerous greenhouse gas (GHG) pollution but must do more to meet its legislated Net Zero target.

EDO recently provided its expert legal analysis to the NSW EPA on its proposed guide for assessment of greenhouse gas emissions from highly polluting projects – the NSW EPA Guide for Large Emitters (Guide).[1] The Guide is intended to provide the requirements for proponents of proposed new or expanded highly climate polluting developments to meet in assessing the development’s GHG emissions as part of its environmental impact statement.

EDO broadly supports the intent of the Guide. Specific requirements for project proponents on the quantification of GHG pollution, its minimisation, and assessment of its impacts are long overdue.

However, there are a number of significant weaknesses in the Guide which will undermine its utility and the ability of NSW to meet its Net Zero commitments. We made a number of recommendations in order to strengthen the proposed Guide, including to strengthen the quality of data feeding into decisions made under the Environmental Planning and Assessment Act 1979 (EP&A Act), the Protection of the Environment Operations Act 1991 (POEO Act), and other environmental and planning laws, as well as into the NSW Net Zero Dashboard.

In particular, we raised the following issues:

  • Planning law reform is urgently required to address climate change and achieve net zero

With the passage of the Climate Change (Net Zero Future) Act 2023 (Net Zero Future Act), NSW took the important step of legislating emission reduction targets. However, for these targets to be meaningful and effective, they need to be embedded in relevant decision-making processes (such as under the EP&A Act and POEO Act) and be enforceable, or risk being ornamental. EDO made detailed recommendations for integrating climate change into the planning system in our Climate Ready Planning Laws for NSW Report.[2]

The latest projections from the NSW Department of Climate Change, Energy, the Environment and Water show that NSW will not meet either its 2030 or 2035 targets without significant action from both Government and the private sector.[3]

It is therefore essential that deep and immediate reduction of greenhouse gas emissions from large emitters is mandatory for all relevant decision makers including Minister for Planning and his delegates and the Independent Planning Commission that will shortly be considering a number of mine expansions. Emissions reductions should also be clearly enforceable, science based, and based on actual emissions rather than estimates.

  • The Guide should be better integrated into the planning framework for development consents and EPLs

While EDO supports the development of the Guide and the requirements for assessment, avoidance, mitigation, and reduction of greenhouse gas emissions, it is currently unclear how the Guide will be implemented or enforced. EDO is concerned that the discretionary nature of the Guide, and the lack of a clear assurance mechanism for proponents to comply with the Guide will result in the operational weakening of its requirements and undermine its intention. We made a number of recommendations to address this, including that:

  • the EPA be given a formal oversight role to ensure that a project’s EIS complies with the Guide;
  • the EPA’s concurrence role be restored for State Significant Development;
  • the EPA is empowered to refuse an EPL even where a development consent has been granted, or issue an EPL with more stringent conditions than the development consent.
  • Emissions estimates must be based on credible and verified methodologies;

The Guide relies heavily on reporting under the National Greenhouse and Energy Reporting Scheme (NGERS), to identify large emitters, estimate emissions, and fulfil other requirements of the Guide.

However, NGERS estimates, particularly in relation to fugitive methane emissions, are highly controversial, unlikely to be reliable, and likely to lead to emissions estimates substantially lower than actual emissions. Data from the International Energy Agency,[4] and independent reports from the Institute for Energy Economics and Financial Analysis,[5] Open Methane,[6] and Ember Climate[7] have shown that Australia’s actual methane emissions are being significantly under reported. This undermines the intent of the Guide, the integrity of the Net Zero Dashboard, and ultimately jeopardises legislated NSW (and national) GHG emissions reduction commitments.

The federal Climate Change Authority (CCA) has recognised the significant problems with  NGERS methods for fugitive methane emissions and in December 2023 made a number of recommendations to address this.[8]

EDO recommended that the Guide implement the CCAs recommendations through not permitting proponents to use so-called “lower order” methods to estimate methane emissions, but rather require that best practice site-source reconciliation to do so.

  • Methane emissions in particular can and must be required to be minimised to the greatest extent possible;

Methane is a potent greenhouse gas and has more than 28 times the warming potential than carbon dioxide over a 100-year period with an atmospheric life of around 12 years. It is responsible for around 30% of the rise in global temperatures since the industrial revolution.

Rapid and sustained reductions in methane emissions are key to limiting global warming to 1.5oC in the immediate future.

Fortunately, commercially competitive technologies already exist to significantly reduce fugitive methane emissions.

For example, a recent analysis conducted by S&P Global found that capturing the fugitive methane lost through venting, flaring and other emissions would provide around 2 billion cubic metres of additional gas to the east coast domestic market, representing 2.5 times the ACCC’s predicted shortfall.[9]

Although the Guide does state that proponents are required to set out how a development’s Scope 1 and 2 GHG emissions will be minimised, it undermines this by not making mitigation measures mandatory. It also uses vague language such as “over the lifetime of the project”, “to be adopted at some time during the project life”, “plausible cost recovery”, “financially feasible”.

In EDO’s experience, where these sorts of qualifiers are used in other contexts (such as conditions of consent), no emissions reductions are achieved despite an ostensible requirement to do so. Mines usually argue the costs outweigh the benefits, in conflict with the polluter pays principle. We recommended that the EPA remove this from the Guide.

EDO also recommended that specific mitigation measures for fugitive methane emissions (for example, requiring that methane be captured for use and not vented or flared) be mandatory for all large emitters.

What next?

EDO understands that the EPA will shortly be seeking input on Environment Protection Licences for NSW coal mines. We will continue to provide our expert advice, informed by decades of advocating for, and standing alongside communities in NSW to the EPA to properly regulate GHG and other pollution from coal mines. If you would like to know more please sign up to our Insight updates.

[1] Available at https://yoursay.epa.nsw.gov.au/draft-climate-change-assessment-requirements-and-guide

[2] Available at https://www.edo.org.au/publication/climate-ready-planning-laws/

[3] Ministerial Statement Updates regarding Net Zero Plan Stage 1: 2020-2030 and previous Implementation Updates  https://www.energy.nsw.gov.au/nsw-plans-and-progress/government-strategies-and-frameworks/reaching-net-zero-emissions/update

[4] Available at https://www.iea.org/data-and-statistics/data-tools/methane-tracker

[5] IEEFA (2023) Fugitive methane emissions cast dark cloud over Australia’s Net Zero ambitions. Available at https://ieefa.org/articles/fugitive-methane-emissions-cast-dark-cloud-over-australias-net-zero-ambitions

[6] Open Methane (2023) Open Methane’s First Results Build the Urgent Case for Improved Emissions Measurements. Available at https://openmethane.org/analysis/open-methane-first-result-builds-case-for-improved-measurement

[7] Ember (2024) How an accounting shift could conceal millions of tonnes of coal mine emissions. Available at https://ember-climate.org/insights/research/accounting-shift-could-conceal-millions-of-tonnes-of-emissions/#supporting-material

[8] See https://www.dcceew.gov.au/climate-change/emissions-reporting/national-greenhouse-energy-reporting-scheme/cca-review-nger-legislation

[9] S&P Global (December 2022) Levers for capturing methane emissions to improve gas availability. Available at https://press.spglobal.com/2022-12-14-Higher-Natural-Gas-Prices-Have-Made-Methane-Capture-Projects-Increasingly-Economic,-Potentially-Unlocking-Vast-Amounts-of-New-Supply-While-Lowering-Overall-Emissions