ESG Snapshot: Issue 68

This week's highlights include:

• At the border. If an Australian commodity benefits from a carbon levy on imports, then maybe Safeguard requirements should be changed for that commodity, says a new paper from a government-instigated inquiry.
• 3.7 million tonnes. By one estimate, two proposed new ACCU methods could deliver 3.7m tonnes of abatement annually.
• Being negative. High-capacity companies must meet and sustain deeply net-negative CO2 emissions, says a new report from consultancy EY.
• Outdated. WA's Auditor-General says state agreements for resource projects don't factor in modern expectations on decarbonisation.
• Oceans apart. Commonwealth leaders in Samoa have issued a major declaration on oceans, while a global nature summit in Colombia has made advances on some fronts, including marine protection. (International news).
• 91% and 1%. Nearly all (91%) of executives see the net zero transition as an investment opportunity, but only 1% believe the transition is on track, says a new WBCSD-backed global survey of executives. (International news).
• Nature scrutiny. A total of 100 companies have had their progress on reducing nature impacts rated by global investors. (Company news).
• Bandaid solution. The NSW government has issued a limited exemption from its single-use plastics bans for plastic adhesives.

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

The Carbon Leakage Review second consultation paper is now available.

The paper concludes that a "border carbon adjustment" applied to imports of some commodities could be appropriate. This would be broadly similar to the EU CBAM.

The policy would mean that imports of specified commodities would be liable to pay a border carbon adjustment if they have a higher emissions intensity than the relevant Australian Safeguard baseline for that commodity.

"Cement and clinker would be suitable for initial consideration for a border carbon adjustment," the paper says.

Lime would also be suitable for early consideration. Ammonia and derivatives, and steel, as well as glass, could be candidates for a border carbon adjustment later.

For domestic producers of commodities benefitting from a border carbon adjustment, the paper suggests it might be appropriate to reduce the Safeguard Mechanism threshold for domestic coverage from 100,000 tonnes of CO2 annually, to a level that covers all domestic production. 

The federal government has agreed to prioritise the development of four new methods for earning credits under the ACCU scheme.

Two of the methods were proposed by Indigenous groups, and the other two were proposed by state governments.

The four proponents will each lead work on the drafting of their respective proposed methods.

The Australian Climate and Biodiversity Foundation said the two methods proposed by state governments had the potential to sequester up to 3.7 million tonnes of CO2 annually.

Meanwhile, the government has also committed to finalising an updated version of the ACCU environmental plantings method before the end of the year, and will release an exposure draft of an integrated farm and land management method in the first half of next year.

The contribution of renewables to the National Electricity Market reached a new milestone during the September quarter, according to AEMO's latest  Quarterly Energy Dynamics report.

At the end of Q3 2024, 45.6GW of new capacity were progressing through the connection process from application to commissioning, a 36% increase compared to the same time last year.

This capacity included 14.6GW of battery projects, representing an 87% increase on the same time last year.

The third quarter of 2024 also saw a new peak renewable contribution record set on 9 September, when renewable sources supplied 72.2% of total NEM generation. 

The federal and NSW governments are jointly investing more than $60 million over five years to establish the Hunter Net Zero Manufacturing Centre of Excellence at TAFE NSW's Newcastle campus.

ARENA has provided $17.2 million to Mars pet food for a demonstration project of using concentrated solar thermal technology to provide process heat.

The $39.3 million project is set to be the first deployment of parabolic trough concentrated solar thermal technology in Australia, and will be the sixth largest deployment of solar heat for an industrial process, globally.

Meanwhile, ARENA has also committed almost $4 million to Australian technology company AnteoTech Ltd to commercialise its new lithium-ion battery anode technology.

The Clean Energy Finance Corporation has released its latest annual report.

"Since we began investing, $4 billion of CEFC capital has backed 7.6 GW in large-scale new renewable generation capacity and energy storage," says an introduction by CEFC chief executive Ian Learmonth.

"We have supported $2.3 billion in discounted finance for more than 70,000 smaller-scale clean energy projects, and our natural capital portfolio, already at $400 million, is underpinning a sustainable future for our agriculture sector."

The Clean Energy Regulator has released its latest annual report.

CSIRO and BOM have released the 2024 State of the climate report, which confirms Australia's weather and climate has continued to change, with an increase in extreme heat events, longer fire seasons, more intense heavy rainfall, and sea level rise.  

Meanwhile, CSIRO has opened a $6.8 million facility in Victoria, which prints flexible solar cells on thin plastic films.  

The technology is lightweight, portable, and suitable for various applications including urban construction, space, defence, mining, emergency management, disaster relief, and wearables. 

A Senate select committee on energy planning and regulation last week held three public hearings.

Australia will host a major global conference on carbon capture use and storage in 2026.

The conference, run by the International Energy Agency, will be co-hosted in Perth by the CSIRO, CO2CRC and DCCEEW, as well as the industry association representing the upstream oil and gas industry.

Consultancy EY's Net Zero Centre has released a new report on the voluntary carbon market. The global report estimates credit prices will rise to US$75-125 per tonne by 2035 across Paris-consistent scenarios. While prices will vary across market segments, it projects that 30% to 50% of credits will cost more than US$50 per tonne by 2035 in these scenarios.

"Advanced economies and high-capacity companies must not only meet but sustain deeply net-negative CO2 emissions," the report says.

The Centre's analysis finds that using high integrity credits in combination with ambitious internal abatement lowers decarbonisation costs by 45% to 65% in Paris-consistent scenarios, compared to relying only on internal abatement measures.

Open consultations:

• Carbon market infrastructure. The Clean Energy Regulator is seeking feedback on its proposed exchange trading model for ACCUs, and its proposed new units and certificates registry. Comments are due by 22 November.
• The National Health and Medical Research Council has released draft revised drinking water guidelines, which contain revised health-based limits for four types of PFAS. Comments are due by 22 November.
• Energy efficiency. DCCEEW is inviting views on a Regulation Impact Statement on a proposal to impose stricter GEMS energy efficiency requirements on distribution transformers. Comments are due by 6 December.
• 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.

New Premier David Crisafulli has named David Janetzki as Queensland's new Minister for Energy. Janetzki is also Treasurer and Minister for Home Ownership.

Dale Last is the new Minister for Natural Resources and Mines, Minister for Manufacturing, and Minister for Regional and Rural Development.

Andrew Powell is Queensland's new Environment Minister (returning to a portfolio he held from 2012 to 2015), and is also Minister for Science and Innovation.

Ann Leahy holds the local government and water portfolios. Tony Perrett is Minister for Primary Industries.

The state government has issued new acid sulfate soil management guidelines.

The EPA says Sydney's landfill space is expected to run out by 2030, "unless urgent action is taken".

In response, the EPA will finalise a waste infrastructure plan, finalise the waste levy review and the NSW plastics plan, and develop and deploy a reuse and repair strategy.

It will also finalise work on product stewardship for batteries, work with the Office of the Chief Scientist to review waste disposal settings for asbestos, and take further action on product stewardship for batteries.

The Independent Planning Commission has approved Squadron Energy's proposed $2 billion Spicers Creek wind farm, to be located in the Central-West Orana Renewable Energy Zone near Gulgong.

The project will comprise a 700MW wind farm and associated 400MW/1,800MWh battery energy storage system.

The EPA has issued a partial exemption from its single-use plastics restrictions, which allow the use of plastic adhesives in some circumstances.

Statutory development - gas. Parliament has passed the Offshore Petroleum and Greenhouse Gas Storage Amendment Bill, which allows 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 the latest annual Victorian Renewable Energy Target progress report, which shows that 13 large scale renewable energy generation projects with a combined capacity of 2,199MW were under construction or undergoing commissioning as at 30 June 2024.

A total of 557MW of energy storage capacity and 12 utility-scale storage projects with a combined capacity of 1,115MW were under construction or undergoing commissioning, as at 30 June 2024, the report says.

Victorian households and businesses installed 630MW of rooftop capacity in FY24.

The state government has announced that households can receive up to $140 off the cost of a new induction cooktop, if they will replace a gas cooktop. 

The Victorian Energy Upgrades scheme discounts will be available through VEU accredited providers, or through participating retailers.

Open consultations:

• Water quality. The EPA is reviewing the state's Environment Protection (Water Quality) Policy, which dates from 2015. Comments are due by 9 December.
• Waste to resources. The EPA has launched a review of the state's Environment Protection (Waste to Resources) Policy, which dates from 2010. Comments are due by 20 December.

The state's Auditor-General has released a report on the administration of state agreements that have long been in place to foster major resource projects.

"State agreements are now operating in a context of shifting expectations around development transparency, more mature environmental and resource regulatory frameworks and evolving policy settings, as well as emerging technologies," the report notes.

Yet transparency is still poor on key issues including how these agreements are performing, and what benefits they are delivering, it says.

State agreements are only varied where both parties agree there is a need for change, the audit report points out.

This means that some state agreements could remain in place indefinitely without updates, "despite changes to risks and expectations over time, such as moves towards decarbonisation and action on climate change".

The state government has released an updated Renewable Hydrogen Strategy, with a major focus on green products and value-adding. 

The UN nature summit has concluded in Cali, Colombia, has concluded without agreement to establish a new global nature fund.

However, the COP16 summit did agree to an expanded role of Indigenous Peoples and local communities in saving biodiversity.

It also reached agreement on a new global mechanism to share the benefits of digitised genetic information.

In addition, it agreed on a new process to identify ecologically or biologically significant marine areas in international waters.

Meanwhile, a new report from BloombergNEF highlights the need to drastically increase nature funding.

Some $1.15 trillion in biodiversity financial flows will be needed in 2030 to restore and maintain biodiversity, it concludes. That's five times the $208 billion per year flowing to biodiversity right now.

Leaders of Commonwealth countries, including Australia, have adopted a declaration at their Samoa summit that has a strong focus on climate change and sustainability.

The declaration also welcomes Australia's proposal to host the COP31 climate conference, in partnership with Pacific Island nations.

CHOGM also adopted the Apia Commonwealth Ocean Declaration for One Resilient Common Future, which calls on all 56 Commonwealth nations to protect and restore the ocean in the face of severe climate change, plastic and other pollution, and over-exploitation.

Meanwhile, Foreign Affairs Minister Penny Wong fielded a question from the media at CHOGM, over whether the Falepili Union treaty between Australia and Tuvalu implicitly requires Australia to examine its fossil fuel exports.

Climate change and nature repair also featured prominently in the CHOGM speech by King Charles.

Commonwealth nations have a combined population of 2.7 billion, of which more than 60% is aged 29 or under.

Business leaders have warned that, without bold government policy, the next wave of large-scale investments in the net zero transition are at risk, in a new survey  by the World Business Council for Sustainable Development, in partnership with Bain & Company, the Breakthrough Agenda, and the Marrakech Partnership. 

An overwhelming 91% of executives see the transition as an investment opportunity, based on responses from 250 executives of leading businesses worldwide, with a combined market capitalisation of more than $2 trillion.

However, only 1% of businesses believe the transition is on track.

According to the latest European Commission Climate Action Progress Report, the EU achieved a net 8% reduction in greenhouse gas emissions in 2023 compared to the previous year.

This marks the largest annual drop in decades, aside from the anomalous year 2020, when emissions fell due to restrictions enforced during the Covid-19 pandemic. EU emissions are now 37% below 1990 levels. 

The Board of the Green Climate Fund - the world's largest dedicated climate fund - has approved funding totalling more than US$1 billion for 16 climate projects across 37 developing countries.

The move brings the Fund's portfolio of investments to a total of US$16 billion, with expected co-financing taking this figure to US$61.5 billion across 286 projects.

The International Energy Agency has issued a new report that focuses on the outlook for the top six mass-manufactured clean energy technologies: solar PV, wind turbines, electric cars, batteries, electrolysers and heat pumps.

Based on today’s policy settings, the global market for these technologies is set to rise from $700 billion in 2023 to more than $2 trillion by 2035 – close to the value of the world’s crude oil market in recent years.

The report also looks at key materials like steel and aluminium.

A high-profile European coalition has joined forces to urgently advance the production of e-SAF – sustainable aviation fuels produced by combining renewable electricity, water and captured carbon dioxide, reports GreenAir News.

Foundation members of Project SkyPower include Air France-KLM, easyJet, Arcadia eFuels, Copenhagen Airports, private jet service Victor, SAF providers Velocys and SkyNRG, and finance and technology providers including ING, Rockton, Natixis, KGAL and Topsoe.

Project SkyPower's mission is to pave the way for the first large-scale e-SAF plants in Europe to reach final investment decision by 2025.

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