ESG Snapshot: Issue 73

This week's highlights include:

• APRA update. APRA has issued an update on its work with insurers on climate risk.
• Don't look at trading. The panel reviewing the operation of the wholesale electricity market has been instructed not to consider carbon trading.
• Santos registers ACCU projects. Santos has registered two new project to earn ACCUs.
• BHP and ACCUs. In the 2030s, BHP might need to acquire more than 2.5% of total ACCU supply, says a WA EPA assessment of a gas turbines project.
• Parks and sequestration. NSW has released a review of legislative provisions on sequestering carbon in national parks.
• Seaweed prospectus. NSW says the state could develop a lucrative seaweed industry.
• Grants and finance. Fortescue, Bank Australia, and Close the Loop are among beneficiaries of new federal grants and finance.

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

The Australian Prudential Regulation Authority has published an information paper outlining the objectives of a Climate Vulnerability Assessment that it is conducting with Australia's five largest general insurers.

The assessment is exploring how the affordability of general insurance might change between now and 2050 in response to physical and transition risks, modelled against two future climate scenarios.

The findings will be released next year.

Meanwhile, the latest quarterly statement from the Council of Financial Regulators says understanding, measuring and preparing for the effects of the physical and transition risks of climate change "is a key priority for the financial system, in line with the government's sustainable finance strategy".

Consultation opportunity - clean energy and net zero. The Productivity Commission is seeking ideas to inform its recommendations to government as part of five new inquiries, one of which is an inquiry into investing in cheaper, cleaner energy and net zero.

The PC will combine the public input with its own research to identify three to five policy reforms under each inquiry, which it will explore further.

Suggestions should be submitted by 15 January.

Santos has registered two ACCU soil carbon projects in Queensland, and Treasury Wines has registered an ACCU soil carbon project in South Australia.

Growing environmental concerns have driven a surge in bioplastics, but unclear disposal labelling is creating challenges, according to a new CSIRO report. 

The State of bioplastics in Australia report says consumer confusion over the different categories of bioplastics means many bioplastic items end up in landfill, or contaminating recycling and composting streams. 

A CSIRO report on hydrogen electrolyser manufacturing has projected that Australia's hydrogen electrolyser manufacturing sector could generate $1.7 billion in revenue and create nearly 4,000 jobs by 2050. 

The federal government has submitted reports to the World Heritage Committee on the state of conservation of the Greater Blue Mountains Area, and the state of conservation of the Gondwana rainforests.

A meeting in Adelaide of climate and energy ministers has released a "version 2" Home Energy Ratings Disclosure Framework, which aims to facilitate a nationally consistent approach to home energy ratings disclosure, for states and territories that choose to implement it.

It updates an initial version released in July, and now includes apartment buildings.

An associated cost benefit analysis says there is a net economic benefit nationally, and in all jurisdictions, for implementing mandatory disclosure at point of sale.

There is a net economic benefit in all jurisdictions for implementing mandatory disclosure at point of lease, if scheme design decisions to reduce compliance costs and other supporting initiatives are incorporated, it concludes.

Meanwhile, ministers also instructed senior officials to develop options to strengthen consumer protections and modernise the consumer regulatory framework.

The meeting communique is here.

The federal government has announced a review of the NEM wholesale market settings by an independent expert panel.

The review will be chaired by Associate Professor Tim Nelson. Other panel members include Paula Conboy, Ava Hancock and Phil Hirschhorn.

The expert panel will consult states and territories, and will not consider options that involve carbon trading schemes, carbon markets, "or that entail governments supporting new fossil fuel generation".

The federal government has released the inaugural First Nations Clean Energy Strategy.

The strategy has three goals - power First Nations communities with clean energy, enable equitable partnerships, and achieve economic benefits with First Nations peoples.

A supporting plan will be developed.

Australia has announced a $75 million contribution to Singapore's FAST-P program, which aims to accelerate the move to net zero in Southeast Asia.

Singapore announced at COP29 that it was committing US$500 million in concessional funding the program, which aims to bring together public, private and philanthropic funding.

The federal and NSW governments have jointly provided $7.4 million in grants to improve plastics recycling, with the federal government providing $6.4 million and NSW providing $1 million.

Sicut Enterprises has received $5 million to build Australia's first commercial composite railway sleeper production facility, which will annually process up to 8,000 tonnes of hard-to-recycle plastics.

Close the Loop received $2.35 million to set up an advanced mechanical recycling facility that will process 4,400 tonnes of mixed post-consumer soft plastics a year into plastic pellets.

ARENA has awarded a $10 million grant to Fortescue to develop, build, and demonstrate world-first fast EV chargers for heavy electric vehicles.

The project will develop 6MW fast chargers capable of charging 240-tonne battery-electric trucks within 30 minutes.

The grant is the first awarded under the $400 million Industrial Transformation Stream of the federal $1.9 billion Powering the Regions Fund.

The CEFC has made a $25 million commitment to energy network owner and operator Energy Locals, to support the deployment of clean energy in apartments, aged care centres, and commercial sites.

The CEFC finance comes from its Powering Australia Technology Fund (PATF), under its growth equity investment strategy, which supports fast-growing technology businesses.

Meanwhile, the CEFC is also committing $50 million to Bank Australia to support up to $100 million in green home loans, as part of the $1 billion Household Energy Upgrades Fund. 

The investment follows similar deals with Plenti, Westpac, and ING Australia.

Environment Minister Tanya Plibersek has formally declined to take into account climate change impacts in her consideration of three coal mine expansion projects.

The decisions regarding the basis for assessing expansions of Idemitsu's Boggabri coal project, BHP Mitsubishi's Cabal Ridge coal project, and Jellinbah's Lake Vermont coal project leave the way clear for the government to approve the projects at any time.

The Minister's decision follows unsuccessful efforts by the Environment Council of Central Queensland, which sought to have the basis for assessing the projects reconsidered, so that climate impacts would be taken into account.

An alliance of organisations including the Energy Efficiency Council, the Australian Industry Group, and the Property Council has issued a report titled Demanding Better, which calls for a new national energy performance agency and targets.

Grant opportunity - clean energy supply chains. Applications are now being accepted under Round 1 of the Quad Clean Energy Supply Chain Diversification Program.

Grants will fund research and development projects and feasibility studies to develop, diversify and reduce vulnerabilities in supply chains for solar PV, hydrogen electrolysers, and batteries.

Projects must be delivered jointly with Indo-Pacific organisations. Organisations in India, Japan and the US can also be additional project partners.

Up to $25 million will be available under the funding round, with grants of up to $2.5 million available. 

The federal government has announced grants totalling $21 million for five critical minerals projects that involve international partnerships.

AEMO has released its first Transition Plan for System Security, an annual report focussed on maintaining power system security as the NEM shifts towards lower emissions.

Agriculture Minister Julie Collins last week convened a roundtable of key industry leaders in Sydney to discuss the development of the agriculture and land Sector net zero plan.  

More than 50 waterway projects around Australia have been awarded grants of between $150,000 to $10 million under round 2 of the Urban Rivers and Catchments Program.

Open consultations:

• 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.

Solquartz Pty Ltd has lodged an EPBC referral for Project Green Poly, near Townsville, which will include a facility that processes quartz into metallurgical silicon, then into polysilicon.

The $8 billion project could provide north Queensland with an opportunity to be an integral part of the global solar PV manufacturing supply chain, the referral says.

The project will also include a biochar processing facility, and a battery energy storage system.

Solquartz is a subsidiary of Quinbrook Infrastructure Partners.

ENEOS, Japan's largest oil company, is to increase production of a green hydrogen carrier at Bulwer Island, the state government has announced.

For two years from 2026, ENEOS will produce up to 680 kilograms of methylcyclohexane (MCH) at Bulwer Island, following a previous successful pilot project at the site.

MCH is a liquid that can be transported at room temperature and normal pressure, making it easy to store and transport.

This project is a demonstration project commissioned by Japan's New Energy and Industrial Technology Development Organization (NEDO) and supported by its Green Innovation Fund.

The EPA is considering a range of licence variations for the 59 coal mine licences that it administers, including additional reporting on greenhouse gas emissions and tougher standards for non-road diesel equipment.

The announcement follows consultation as part of a five-yearly review of coal mine licences.

The EPA has also released a summary report of its consultations on coal mine licences.

The state government has tabled in Parliament a review of provisions in the National Parks and Wildlife Act that empower the Minister for the Environment to create and deal with carbon sequestration rights on National Parks Service land.

The review notes that national parks represent one of the largest carbon stores in NSW, covering more than 10% of the state, and equating to 40% of the total NSW forest carbon stock.

"Providing secure, long-term protection for these carbon stocks is a vital contribution to managing climate change risk," it says.

The review says two National Parks Service vegetation regeneration projects are expected to generate 738,000 ACCUs over 25 years. Various existing environmental plantings projects are expected to generate 191,875 ACCUs over 25 years.

The review concludes the provisions remain valid and appropriate.

The state government has released a Seaweed Prospectus, which aims to develop a globally competitive seaweed industry, and highlights opportunities for investment in the sector.

Opportunities include the global nutraceuticals market, the pet food market, methane-reducing supplements, animal feed additives, and alternative proteins.

The prospectus says seaweed farming is one of the world's fastest growing industries.

Grant opportunity - landfills. The state government has made a further $6 million available for regional councils to help them transform, modernise or close old landfills that no longer accept waste. Grants of up to $300,000 are available.

Applications close on 21 March.

The state government has placed on exhibition the EIS for Elgin Energy's proposed 600MW Mayfair solar farm and associated battery storage system, which would be located in the Central-West and Orana REZ.

Consultation opportunity - energy efficiency. The state government is consulting on 2026 to 2027 targets for its Victorian Energy Upgrades program.

A webinar will be held on 11 December, and responses are due by 16 January.

Open consultations:

• 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 EPA has recommended approval for BHP Iron Ore to increase the capacity of its Yarmina gas power station in the Pilbara. The assessment report says it is "highly likely" that BHP will need to use carbon credits to comply with the project's proposed emissions reduction trajectory.

If BHP relies solely on ACCUs to comply with the trajectory, it will require 220,000 ACCUs a year from FY27 to FY30, rising to 940,000 by FY51 to FY52.

KMPG estimate that post FY30, the proposal's annual ACCU demand volume could be more than 2.5% of total ACCU supply.

The Department of Water and Environmental Regulation has granted works approval for construction of BP's H2 Kwinana Renewable Hydrogen project, on the site of the company's former refinery.

The facility will produce 48 tonnes of green hydrogen each day.

Clean energy and decarbonisation, environment and sustainability, mineral supply and value-adding, and sustainable food production are among the strategic action areas listed in a new 10-year state science and technology plan.

Grant opportunity - wind industry manufacturing. The state government is offering up to 50% co-investment funding under a new Wind Energy Manufacturing Co-Investment Program.

Both financial and non-financial support is being made available through the program.

Priority areas include the manufacture of wind tower foundations, anchor cages, transmission poles and specialised transport trailers.

Grant opportunity - mineral carbonation. The Minerals Research Institute of Western Australia is inviting expressions of interest for grant funding for research into mineral carbonation.

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 NT EPA is inviting comment on the proposed Lei Lithium project, proposed by Lithium Plus Minerals, which would be located approximately 30km south of Darwin.

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.

The latest round of negotiations on a legally binding treaty on plastics, which were intended to finalise a text, have ended without agreement. Negotiations will resume next year.

"The world’s commitment to ending plastic pollution is clear and undeniable," said Inger Andersen, head of the UN Environment Programme. 

"But it is clear there is persisting divergence in critical areas and more time is needed for these areas to be addressed," Andersen said.

The key sticking point is the potential inclusion in the treaty of limits on plastic production, which is opposed by an alliance of oil-producing nations.

New Zealand's Climate Change Commission has released two new reports - a review of the 2050 target, and advice on emissions budgets. The NZ government must respond to the reports by the end of next year.

Meanwhile, an independent panel has released a report that reviews the latest science on biogenic methane, generated by the agriculture and waste sectors.

The report, commissioned by the previous NZ government, also estimates the biogenic methane emissions reductions needed in 2050 and 2100.

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