ESG Snapshot: Issue 61

This week's highlights include:

• Three federal bills pass. Parliament has passed bills on illegal logging, climate disclosure, and the Net Zero Economy Authority.
• Biodiversity offsets review. A Tribunal says the total value of NSW biodiversity credit transactions in FY24 exceeded all other years combined.
• Good to go. The federal government has introduced a Bill to establish its Guarantee of Origin scheme for hydrogen and renewables.
• Two Victorian bills introduced. One new Bill paves the way for a transition from fossil gas, while another allows gas to be temporarily stored offshore.
• Nature bills. Greens members of a Senate inquiry into the nature positive bills have called for major changes, without yet revealing what they want.
• New Cabinet. NT First Minister Lia Finocchiaro has named her new Cabinet.

ESG Snapshot - powered by the Business Council for Sustainable Development Australia and curated by Earthed.

Statutory development - Guarantee of Origin. The federal government has introduced a Bill to establish a Guarantee of Origin scheme that would track and verify the emissions of low-emissions products, such as hydrogen.

The scheme will issue two types of digital certificates: Product GO certificates and Renewable Electricity Guarantee of Origin (REGO) certificates.

Statutory development - mandatory climate risk disclosure. The House of Representatives has agreed to Senate amendments to the Bill that introduces a mandatory regime of climate risk disclosure, which means the Bill has now passed both Houses of Parliament.

Meanwhile, the Australian Accounting Standards Board will formally vote on related Sustainability Reporting Standards in the very near future.

Statutory development - Net Zero Economy Authority. The House of Representatives has agreed to Senate amendments to the establishing legislation for the Authority, which means the Bill has now passed both Houses of Parliament.

Statutory development - illegal logging. The Illegal Logging Prohibition Amendment (Strengthening Measures to Prevent Illegal Timber Trade) Bill 2024 has now passed both Houses.

The Bill modernises monitoring and compliance arrangements, to ensure illegally logged timber isn't imported into Australia or sold in Australia.

Meanwhile, the Greens have introduced an Ending Native Forest Logging Bill, with both major parties stating that they do not support it.

A Senate committee inquiring into the government's Nature Positive bills, which would establish a new EPA and a tougher environmental crime compliance regime, has recommended changes to the bills in its final report.

Labor senators recommended amendments to give the Environment Minister power to make, review and amend environmental standards. They also sought an amendment to allow a merits review, if an organisation or individual is issued with an Environmental Protection Order.

In addition, Labor senators want further consultation to ensure the definition of nature positive is consistent with the Global Biodiversity Framework.

Greens senators called for amendments, without specifying them, and said they were "willing to work with the Labor government on strong reforms that protect nature now".

Senator David Pocock recommended that native logging be made subject to the EPBC Act. Senator Pocock also recommended governance changes for the EPA, and a new requirement to disclose all direct and indirect emissions associated with projects seeking EPBC approval.

Coalition senators warned that introducing a climate trigger, or bringing native forestry under the EPBC Act, "would represent yet another dagger to the heart of Australian industry under the Albanese government".

EPBC referrals made last week include:

• preliminary surveys for Iberdrola's proposed 3GW Aurora Green offshore wind farm, which would be located about 25 kilometres offshore from Gippsland in Victoria.
• marine surveys for Parkwind's proposed 1GW Blue Mackerel North wind farm, offshore from Gippsland.
• the proposed 330MW Meadow Creek solar farm near Wangaratta in Victoria.
• ZEN Energy's proposed 230MW Solar River project in South Australia.

The federal government also allowed ACEN's 600MW Birriwa solar and battery project to proceed in NSW's Central-West Orana REZ, concluding that it did not require EPBC approval.

Consultation opportunity - Battery Breakthrough Initiative. ARENA has issued a consultation paper on the proposed $523.2 million Battery Breakthrough Initiative. The program will be capable of awarding grants or production incentive payments. Comments are due by 7 October.

An alliance of more than 50 organisations, called Renew Australia for All, has launched an energy bills savings plan at Parliament House in Canberra.

The plan calls for a $5 billion investment to deliver immediate subsidies that reduce or eliminate the upfront cost of home energy upgrades. It also calls for at least $50 billion over 10 years to repower Australian homes and communities.

Alliance members include the Clean Energy Council, a range of environment groups and businesses, ACOSS, and the ACTU.

The federal government has released a new National hydrogen strategy, that incorporates its proposed $2 per kilogram green hydrogen production tax incentive program and the expanded hydrogen headstart program.

The strategy has a 2050 "stretch target" of producing at least 15 million tonnes by 2050, and up to 30 million tonnes, supported by five-yearly milestones.

To achieve the base production target, around 3GW of electrolyser capacity could be needed by 2030, with this subsequently growing to 150GW by 2050.

Approximately 1,200TWh of electricity could be required across the
economy for hydrogen production by 2050.

The strategy quotes a submission by the Business Council for Sustainable Development Australia which states that prioritising the decarbonisation of ammonia is "a promising strategy", and should be part of a broader approach that also promotes hydrogen use in transport, energy, and steel production.

Meanwhile, Australia and Germany have signed what Minister Bowen has termed a declaration of intent to deepen cooperation on new green hydrogen supply chains through a co-funded $660 million (€400 million) H2Global funding window, which will form part of Germany's H2Global auction mechanism.

The latest renewable projects quarterly report from the Clean Energy Council notes that the capacity of financially committed renewable electricity generation projects in 2024 (1.6 GW) has now surpassed the total for 2023 (1.3 GW).

Onshore wind increased, with another 577MW reaching financial commitment in the quarter, it says. This comes after no onshore wind projects reached financial commitment in 2023.

The report says a big acceleration in financial commitments will be required in the rest of this calendar year, in order to achieve an annual run rate of 6–7 GW per annum of financial commitments for large-scale generation, which is the rate required in order to be on track for 82% renewables by the end of 2030.

Prime Minister Anthony Albanese will this coming Saturday attend a meeting of Quad leaders in the US, hosted by President Joe Biden.

Climate change and clean energy will be among the issues discussed by leaders, along with security, health, and cybersecurity.

ARENA is providing global fleet electrification specialist Zenobē with $8.5 million from its Driving the Nation Fund to develop a $19 million BEV truck charging hub in Sydney.

Zenobē, will own and operate the 22-charging station hub, which will service 60 electric trucks that will be leased by Woolworths.

It's the second ARENA lease for Zenobē, which received $5 million in 2021 to help develop a $37.2 million electric bus depot in the Sydney suburb of Leichhardt.

The CEFC is lending US$7 million to Australian startup Siltrax to help it develop an innovative technology that makes lighter, more efficient fuel cells for use in power generation and heavy vehicles.

The Siltrax technology has been developed by renowned solar entrepreneur Dr Zhengrong Shi and semiconductor expert Dr Jim Zhu.

Organisations including the Federal Chamber of Automotive Industries and Next Advisory appeared before a hearing last Friday conducted by a Senate inquiry into the transition to electric vehicles.

The federal government says more than 115 biodiversity projects will receive a share of more than $215 million.

About $115 million is being invested in 55 projects that benefit 20 priority places identified in the Threatened Species Action Plan 2022-2032.

The remaining funding is being invested in more than 60 projects that protect species and landscapes.

Open consultations:

• Nature repair market. The federal government is inviting comments by 30 September on Rules that will operate under the Nature Repair Act 2023.
• PFAS. Submissions to a Senate select committee inquiry into PFAS are due by 19 December.

Award opportunity. Nominations are now being accepted for the 36th annual Banksia sustainability awards. Entries must be submitted by 6 December.

Statutory development - coal royalties. Parliament has passed the Progressive Coal Royalties Protection (Keep Them In The Bank) Bill.

The state government introduced the Bill, arguing that the Opposition LNP is intent on lowering the royalty rate if it wins this year's state election. The Bill ensures that the state's existing coal royalties can't be lowered simply by regulation. Instead, a legislative change would be required.

The LNP described the legislation as a "political stunt".

The state government has announced support for five new projects under the Remote Area Boards program, with recipients including:

• South West Queensland Regional Organisation of Councils, which will receive $200,000 to engage All Energy Pty Ltd to develop an energy cost reduction, renewables, and Carbon Zero Strategy.
• Mount Isa to Townsville Economic Development Zone, $200,000 to explore the region’s current emissions trajectory to 2050, and the interventions that can support an accelerated reduction in emissions to achieve Net Zero emissions.
• Torres and Cape Indigenous Councils Alliance, $200,000 to investigate and progress the decarbonisation of Cape York Peninsula and improve the sustainability of Cape York communities.

The state government has released an Aquaculture strategy for 2024-2034.

Open consultations:

• PFAS. The state government is consulting on a proposal to amend the threshold values for PFAS in regulated waste. Comments are due by 27 September.

Representatives of WWF and the Planning Institute were among those appearing before a hearing last Thursday of a parliamentary committee inquiry into the government's biodiversity offsets reform bill.

Another hearing will be held this Friday.

Consultation opportunity - biodiversity credits. The Independent Pricing and Regulatory Tribunal has launched its second annual review of the NSW biodiversity credits market.

A discussion paper says that in FY24 there were substantial increases in the:
• number and types of credits transferred in the market.
• total value of market transactions.
• number of new Biodiversity Stewardship Agreements signed.

"We found that around 20,000 more credits were transferred between proponents and landholders in 2023-24 compared to 2022-23 – and the types of credits traded were more varied than before," an IPART discussion paper says.

"The market saw a total of 236 market transactions, up from 159 in the previous year, and the total value of these transactions reached $226 million - more than all other years combined since the market's inception."

In FY24, proponents showed less dependency on the Biodiversity Conservation Fund to offset their impacts than in previous years, but fund balances continued to grow steadily, the paper says.

"Between FY23 and FY24, the number of credit obligations that were transferred to the Trust via payments into the Biodiversity Conservation Fund halved (from 20,158 to 10,865),it says.

"The value of these payments into the fund totalled roughly $64 million, and reduced by 21% from FY23."

The IPART review will consider the performance of the market in the context of the government's proposed reforms to the scheme. Comments are due by 8 October.

Interest in the first tender for South West Renewable Energy Zone access rights has attracted around four times the indicative tender target, according to AEMO Services.

At the close of bids, AEMO Services had received bids for access rights to the South West REZ from projects representing more than 15GW of generation and storage infrastructure, against an indicative capacity of 3.98 GW.

Consultation opportunity - problematic plastics. A draft action plan on plastics proposes introducing a green list of chemicals suitable for food packaging, and a red list of those that aren't.

The plan also proposes introducing a voluntary chemical certification and labelling scheme for food packaging.

In addition, it proposes rating new washing machines on their ability to capture and reduce microfibres by the end of 2027.

The EPA says most of the proposals bring NSW into line with other jurisdictions, which have moved ahead of NSW. Comments are due by 4 November.

The Independent Planning Commission last week approved two renewable energy projects - the $166 million, 100MW Wallaroo solar farm near Yass, and Engie's proposed $826.4 million, 372MW Hills of Gold wind farm near Tamworth.

Meanwhile, the state government has placed on exhibition Terrain Solar's proposed 60MW Maison Dieu solar farm near Singleton.

Statutory development - firm capacity. The NSW government has gazetted the Electricity Infrastructure Investment Amendment (Firm Capacity) Regulation 2024.

The regulation deals with the calculation of firm capacity for the purposes of the state's energy security target.

Grant opportunity - Indigenous carbon farming. The state government is investing $2.5 million to support Aboriginal organisations in establishing and managing carbon projects on their land.

The Carbon on Country initiative will support Indigenous communities in restoring Country and participating in the carbon market.

Eligible projects can register to earn carbon credits and apply for up to $250,000 in funding to cover up to 90% of their implementation costs. Expressions of interest must be submitted by 24 October.

The Natural Resources Commission has released its preliminary report on the biosecurity risks of invasive species.

The state government has tabled the latest annual statutory report of the Return and Earn container deposit scheme.

Open consultations:

• Coal mines. The EPA is surveying community members on the regulation of coal mines, with responses due by 2 October.

The federal and ACT governments have signed a Renewable Energy Transformation Agreement (RETA) that commits them to work together in support of the national energy transformation. 

The agreement will:

• bolster work underway to electrify homes and businesses across the ACT. 
• support Australia’s 82% renewable electricity by 2030 target.
• improve community engagement.
• drive better social and economic outcomes.

The ACT government has released a report on the impacts of the introduction of a Minimum Energy Efficiency Standard in April 2023 that will require the installation of ceiling insulation in rental properties.

The report found that the Standard has not triggered rent increases, nor has it reduced the availability of rental properties.

Statutory development - gas restrictions. The state government has introduced the Building Legislation Amendment and Other Matters Bill 2024.

The Bill will establish regulation-making powers to implement key components of Victoria's Gas substitution roadmap, including bans on new connections to fossil gas.

"These regulation making powers will enable draft regulations and a regulatory impact statement to be released later this year ... on options for the electrification of Victorian buildings, including understanding how we can support Victorians to transition to electric appliances as older gas appliances reach their end of life," Planning Minister Sonya Kilkenny said when introducing the Bill.

However, the draft regulations implementing new gas restrictions won't apply to agriculture, industrial buildings, and the use of liquefied petroleum gas, Minister Kilkenny said.

Gas cooktops in existing homes, as well as gas appliances in existing commercial buildings will also be excluded from any regulatory restrictions, the Minister said.

The Bill does not enable regulations to be made that can prohibit the maintenance or repair of a reticulated gas appliance, the Minister added.

Statutory development - gas storage. The state government has introduced the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill 2024, which would permit holders of a petroleum production licence to temporarily store fossil gas in offshore natural reservoirs for later recovery and use.

The state government has released a supplementary EES for the proposed Viva Energy gas terminal project, with comments due by 24 October.

Meanwhile, the government has also invited comments on a licence application by Lochard Energy (Iona Operations) Pty Ltd to construct and operate a 5.3 kilometre pipeline near Timboon and Port Cambell in western Victoria to transport fossil gas or hydrogen, or a blend of the two. Comments are due by 16 October.

The state government has granted a planning permit for the $651 million, 450MW Hazelwood North solar farm.

The state government has launched a Request for Information process on a Wind Worker Training Centre and Renewable Hydrogen Worker Training Centre.

The state government is inviting survey responses in the first stage of the review of the Victorian Energy Upgrades scheme. Comments are due by 22 September. Further consultation will be undertaken in the first half of 2025.

Open consultations:

• Container deposits. Comments are due by 25 October on a draft Environment Protection (Beverage Container Deposit Scheme) Amendment Bill 2024.

Statutory development - environmental approvals. The Legislative Assembly has passed the Environmental Protection Amendment Bill 2024, which aims to streamline and adjust environmental approval processes.

The Opposition supported the Bill, but said it did not go far enough in reducing "green tape". The Bill is now before the Legislative Council.

NT First Minister Lia Finocchiaro has appointed Deputy Chief Minister Gerard Maley as Minister for Renewables, Mining and Energy, and Agriculture.

Minister Josh Burgoyne will hold the Lands, Planning and Environment portfolio, and will also be Minister for Water Resources.

New listings are in blue.

The World Bank has released the 2024 edition of its State and trends of carbon pricing: International carbon markets.

"These markets are at a pivotal moment, where the path forward is filled with both promise and challenges," the report says.

"On the one hand, efforts to enhance trust in the supply side of the market have shown encouraging progress, instilling a sense of optimism about the environmental integrity of carbon credits."

"However, the demand side of the market is still working towards overcoming inconsistent guidelines, regulations, and divergent priorities among stakeholders."

The Global Methane Budget 2024, released last week, shows methane emissions from human activities have increased by 20% over the past two decades.  

The budget is produced by international research organisations, including CSIRO, as part of the Global Carbon Project.

Pep Canadell, CSIRO's executive director for the Global Carbon Project, said methane concentrations in the atmosphere are now 2.6 times higher than pre-industrial (1750) levels. 

The European Commission has published the State of the Energy Union Report 2024, which describes how the EU has dealt with critical energy security risks and accelerated the transition towards climate neutrality. The report shows that:

• Renewable energy generation is breaking new capacity records, with half the EU's electricity generation coming from renewables in the first half of 2024.
• The share of Russian gas in EU imports dropped from 45% in 2021 to 18% by June 2024.
• The EU reduced gas demand between August 2022 and May 2024 by 138 billion cubic meters.
• EU greenhouse gas emissions fell by 32.5% from 1990 to 2022, while the EU economy grew by around 67% in the same period.

NatureFinance and the World Bioeconomy Forum have released a new report on Financing a sustainable global bioeconomy, which builds on work contributed to the G20 Bioeconomy Initiative that was created by Brazil, in its role as president of this year's G20.

The Coalition of Finance Ministers for Climate Action has released new policy notes on fossil fuel subsidy reform and mobilising bond markets for a just transition.

The UN Environment Programme Finance Initiative (UNEP FI) has released two guidance reports for banks and stakeholders, one dealing with effective client engagement to encourage sustainable practices, and the other with sustainability governance.  

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