ESG Snapshot: Issue 72

This week's highlights include:

• Federal bills. Federal Parliament has passed several key climate bills, but progress on EPBC reforms has stalled.
• FOGO mandate. NSW has introduced a bill to mandate organic waste collections from homes and businesses.
• Coal exit. New federal arrangements to manage the exit of coal power plants are now in place, following the passage of a South Australian bill.
• Inquiry urges fossils levy. A Greens-chaired Senate committee inquiry into climate risk and insurance has called for a levy on coal and gas production.
• Bigger EPA. The WA government has added new members to the state's EPA.
• Approvals fast-track. The NT government has named the members of a business taskforce that will advise on measures to fast-track approvals.
• Inquiry urges covenant regime. A Victorian parliamentary inquiry has recommended a new covenant program to protect farmland biodiversity.
• 'Far from assured'. NSW will have to do more in order to meet its climate targets, says the government's advisory Net Zero Commission.

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

Statutory development - Future Made in Australia. Parliament has passed the government's Future Made in Australia legislative package.

The package comprises:

• the Future Made in Australia Bill that establishes a National Interest Framework to support decision-making about public investment that facilitates private sector investment in the national interest.
• an associated omnibus amendments Bill that amends the Export Finance and Insurance Corporation Act and ARENA's establishing legislation. 
• a Guarantee of Origin Bill that establishes a voluntary Guarantee of Origin (GO) certification scheme, which will authenticate low-emissions products, starting with hydrogen, as well as renewable electricity.

Statutory development - production tax incentives. A production tax incentives Bill designed to implement the next stage of the Future Made in Australia package, has passed the House of Representatives. The Bill establishes two tax incentives:

• a Hydrogen Production Tax Incentive worth $2 per kilogram of renewable hydrogen produced between FY28 and FY40, for up to ten years per project.
• a Critical Minerals Production Tax Incentive worth 10% of relevant processing and refining costs between FY28 and FY40, for up to ten years per project.

In a related move, the Senate has instigated a committee inquiry into the Future Made in Australia (Production Tax Credits and Other Measures) Bill 2024. Submissions are due by 9 January and the inquiry will report by 30 January.

After intervention by Prime Minister Anthony Albanese, a compromise reached with key cross-bench senators on EPBC reform legislation has been put on ice.

The move raises the possibility that EPBC reform legislation now won't be considered until after the federal election.

The reform bills, which would have created an independent EPA and provided a legislative basis for national environmental standards, had been opposed by the Western Australian government and the Minerals Council of Australia.

Cross-bench Senator Fatima Payman also reportedly opposed passage of the legislation, which meant the government did not have sufficient support for the Senate to vote through the legislation.

Meanwhile, Environment Minister Tanya Plibersek has issued a statement on Australia's international environmental leadership.

A Greens-chaired Senate select committee on the impacts of climate risk on insurance has issued its final report, with the majority report recommending that Treasury develop options for a levy on coal and gas extraction companies.

The funds should be used to help fund disaster mitigation and resilience measures, and the cost of rising insurance, it recommends.

In additional remarks, Labor senators said they "agree in principle that securing funding from fossil fuel producers to contribute towards supporting policy holders is an idea that has merit".

"However, we cannot endorse such a significant change to Australia's taxation system when it is not supported by any modelling or evidence of its intended or unintended consequences," they stated.

Any such levy "could act as a perverse incentive to future Governments to prop up the thermal coal sector", they added.

Coalition senators said that they "oppose in principle the idea of a levy of this kind because the cost will likely be passed on to consumers through the higher costs of goods and services".

"Any review of the taxation of fossil fuel companies should be of a broader examination of Australia’s taxation system as to whether it will play a key role in the transition to a carbon neutral future or arrest biodiversity loss," they said.

The federal government has issued its latest Annual Climate Change Statement, along with new emissions projections, and a new quarterly update of its emissions inventory.

In addition, the Climate Change Authority has issued its latest Annual Progress Report, assessing Australia's progress in reducing emissions.

Registration for the Capacity Investment Scheme (CIS) Tender 4 - NEM Generation - is now open.

CSIRO has successfully trialled what it describes as a game-changing hydrogen production technology at BlueScope's Port Kembla Steelworks.  

CSIRO's technology, which has been licensed to CSIRO spin-off Hadean Energy, has completed 1,000 hours of successful operation in the trial with BlueScope Steel, which commenced in October 2024.  

Unlike conventional hydrogen electrolysers, which rely heavily on electricity to split water into hydrogen and oxygen, the CSIRO technology also makes use of waste heat (for example, steam from the steelworks) to help produce hydrogen.  

The technology can reduce the electricity needed to produce renewable hydrogen by up to 30%.

Meanwhile, a new CSIRO venture called FPR Energy has secured $15 million in seed funding to commercialise next generation solar thermal technology. 

FPR Energy was launched in collaboration with global advisory and funds management firm RFC Ambrian and utilities leader Osaka Gas. 

FPR Energy aims to cut emissions in heavy industries such as minerals refining, steel, cement and chemical production using CSIRO’s particle-based Concentrated Solar Thermal (CST) technology, which is capable of producing temperatures up to 1,200 degrees Celsius. 

Squadron Energy has made an EPBC referral for its 300MW Conargo wind farm in NSW, and an associated 150MW/1,200MWh battery storage system.

Meanwhile, Jinko has referred a 600MW solar farm and 400MW/800MWh battery storage system, proposed for a site near Goondiwindi.

In addition QEM Ltd has made a referral for its Julia Creek vanadium and energy project in Queensland's North West Minerals Province, and Aeris Resources has referred its Constellation copper project in NSW.

The federal government has called for expressions of interest to develop voluntary emissions estimation and reporting standards for the agriculture, fisheries and forestry industries.

The standards are intended to improve the consistency of calculating and accounting for emissions on agricultural land.

Court ruling - EDO ordered to pay costs. The Federal Court has ordered the Environmental Defenders Office to pay Santos legal costs totalling more than $9 million, following the EDO's failed legal challenge against the company's Barossa gas project.

The decision was welcomed by Santos and the NT government.

The federal government has appointed David Shankey, a former deputy director-general at Queensland's Department of Energy and Public Works, as the inaugural Chief Executive Officer of the Net Zero Economy Authority.

The Net Zero Economy Authority will ensure Australian workers, industries and communities share the benefits of the net zero transition.

The Senate has instigated a committee inquiry into a private members Bill introduced by Senator Bridget McKenzie that would establish a national organic goods standard.

The inquiry will report by 31 January.

Open consultations:

• 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.
• Sustainability reporting. ASIC has released a draft regulatory guide on Australia's new sustainability reporting regime. Comments are due by 19 December.
• PFAS. Submissions to a Senate select committee inquiry into PFAS are due by 19 December.

Statutory development - FOGO. Climate Change, Energy and Environment Minister Penny Sharpe has introduced a Bill that would mandate the source-separated collection of household food and garden organic waste, and business food waste.

Those businesses covered by the proposed requirements will be required to ensure that food waste bins are collected weekly and that the food waste is not mixed with other waste during transportation.

The maximum penalty for non-compliant businesses will be $500,000, with an additional $50,000 penalty each day for continuing offences.

The Bill would also mandate the reporting of food donations by large supermarkets. 

Court ruling - record land clearing fine. Auen Grain Pty Ltd and its sole director Ronald Greentree have been fined more than $2 million plus $278,000 in prosecution costs, by the NSW Land and Environment Court.

The penalties were imposed for unlawfully clearing 1,262 hectares of native vegetation.

The sentence was imposed after Auen Grain Pty Ltd and Greentree were found guilty of eight separate land clearing events between December 2016 and January 2019, on a property northwest of Narrabri.

The clearing resulted in the loss of a significant area of remnant, endangered vegetation, including critical habitat for 30 threatened species.

The Net Zero Commission's first annual report has been tabled in state Parliament.

"The achievement of the emissions targets the Parliament of NSW has established for 2030, 2035 and 2050 are far from assured," the report says.

"Unless action is accelerated, NSW may not reach net zero by 2050 and we will fail to meet our nearer term targets. This will require ongoing cooperation from governments at all levels, along with businesses of all sizes, as they work together with households and the wider community."

The report says the Commission is concerned about the risks to the state's targets due increased emissions in the resources sector, due in large part to new coal mining projects.

The NSW government has granted planning consent for EnergyAustralia's $1 billion 500MW/2,000MWh Mt Piper battery energy storage system.

The project will create 177 jobs during construction, with developer EnergyAustralia to invest up to $2 million into the Lithgow City LGA through a Voluntary Planning Agreement.

A parliamentary committee inquiry into food security has recommended that the state government work with Trust for Nature and farmers to develop an agricultural covenant pilot program to protect biodiversity values on private land.

The existing covenant scheme applies to private land, but not farmland.

The state government has instigated a review of Parks Victoria, which manages more than four million hectares of parks and reserves, which will be completed by next March.

It has also appointed Graeme 'Gus' Dear as the new interim chief executive of the organisation.

Construction has started on a Synchronous Condenser (SynCon) in Ararat that will help to stabilise and balance the grid as more wind and solar energy from Western Victoria enter it. 

Statutory development - biosecurity. The government's Biosecurity Bill 2024 has passed the Upper House and will now go to the Lower House.

The Bill overhauls the legislative framework for dealing with pests, diseases, and other biosecurity risks, and more closely aligns the state's approach with approaches in other jurisdictions.

Statutory development - managing coal plants in the National Electricity Market. In its role as lead legislator on matters relating to the National Electricity Market, the South Australian parliament has passed coal power plant "orderly exit" legislation.

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.
• Firming capacity. The state government is consulting on a framework to ensure the state has sufficient long duration firm capacity. Comments are due by 20 December.

The state government has expanded the EPA board from five to nine members. The new appointments are:

• Professor David Caddy, who is the former WA Planning Commission Chair.
• Kelly Faulkner, who has previously worked as the State's Appeals Convenor and has held a number of senior roles at the Department of Water and Environmental Regulation.
• Anthony Sutton, who has also worked as the State's Appeals Convenor and is the outgoing executive director of Energy Transition Strategies at the Department of Jobs, Tourism, Science and Innovation.
• Dr Luke Twomey, who is the chief executive of the Western Australian Marine Science Institution.

The new members join Chair Darren Walsh, Deputy Chair Lee McIntosh, Hamish Beck, Jane Bennett, and Karen Caple in rounding out the EPA's nine-member board.

The EPA has confirmed a detailed environmental assessment is required to determine the extent of the Western Green Energy Hub proposal's environmental impacts.

The hub proposal entails the construction and operation of 3,000 wind turbines, 35 solar farms, and a renewable hydrogen facility, about 440km east of Kalgoorlie.

The proponent’s referral states that about 95% of the proposed 22,690km² development envelope will remain undisturbed.

The state government has introduced new support measures for lithium producers affected by a sudden and unexpected plunge in lithium prices.

Fee waivers worth up to $90 million will be provided for up to two years two downstream processors, and two-year fee waivers, worth a total of $9.37 million, will be provided to lithium miners.

A $50 million loan facility will also be available to help lithium miners access temporary interest-free loans to help sustain their operations, based on demonstrating their current financial position and operational plan. 

The state government says a new Resources Online platform will centralise information and lead to a more efficient processing of mining and petroleum environmental applications.

The platform forms part of the state government's Fast Tracking Mining Approvals (FTMA) program.

The state's main electricity grid hit a new renewable energy record last month, with renewables peaking at 85.1% of energy on the South West Interconnected System on 17 November. 

The state government says it has more than doubled the renewables on the grid since 2017, from 14% in 2017 to more than 34% in 2023.

Open consultations:

• Waste reporting. The Department of Water and Environmental Regulation is consulting on proposed changes to reporting requirements applying to liable waste and recycling operators. Comments are due by 31 January.

The Territory government has appointed a new Approvals Fast Track Taskforce that will identify measures to reduce approvals timeframes.

The taskforce, which will operate for six months, will be chaired by former Property Council NT president, Mark Garraway.

Open consultations:

• Draft Territory Coordinator legislation. The NT government is inviting comments by 17 January on draft legislation to establish the office of Territory Coordinator.

New listings are in blue.

Notable reactions to COP29 include:

• a DCCEEW list of outcomes for Australia.
• commentary from the V20 coalition of climate-vulnerable countries stating that the $300 billion goal must be the first instalment of a larger payment cycle.
• commentary on the geopolitics of the COP, from international think-tank E3G.
• a reaction on the completion of Article 6 rules, issued by the International Emissions Trading Association.

 Companies are not accelerating their transition to net-zero at the rate needed to achieve the goals of the 2015 Paris Agreement, says a new Global Climate Action Barometer, issued by EY.

"Adoption of transition plans is far too low, all but precluding the world’s ability to meet the goals of the 2015 Paris Agreement," it says. 

The Asian Development Bank has launched a new regional program, Glaciers to Farms, that will promote sustainable water use and food security in Central Asia, the South Caucasus, and Pakistan, in response to accelerated glacial melt.

Glaciers to Farms aims to mobilise up to $3.5 billion from the ADB and other sources.

Thailand has become the first country in Asia to issue a sovereign sustainability-linked bond, with technical support from the Global Green Growth Institute.

The USD $870 million bond is linked to two targets - reducing national emissions by 30% by 2030, compared to business as usual, and increasing the annual registration of zero-emission passenger cars to 440,000 vehicles annually.

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