ESG Snapshot: Issue 74

This week's highlights include:

• Waste to energy. Victoria plans to raise its cap on the amount of waste that can be processed by waste to energy facilities.
• Circularity. The federal government has released a national circularity framework, and a ministerial advisory group has called for a circularity law.
• Renewables and biodiversity. Victoria favours a 'no net loss' approach to managing the biodiversity impacts of renewable energy.
• Mine expansion. WA's Appeal Convenor has for the first time discussed a new state policy for managing major project emissions.
• Nuclear hearings. A House of Representatives nuclear inquiry will hold two hearings this week.
• Planning energy. A Senate committee into energy and planning regulation will release its report on Friday.
• Waste outsider. Queensland has declined to support waste proposals discussed at a meeting of federal, state and territory environment ministers.
• Koala compo. The NSW timber industry has been accused of making 'massively inflated' compensation claims to create a Great Koala National Park.
• Darwin CCUS hub. CSIRO has released a large suite of reports on developing a CCUS hub near Darwin.

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

BCSDA's ESG Snapshot is taking a holiday break. The next issue will be published on 13 January.

A House of Representatives select committee on nuclear energy is holding two hearings in Western Australia this week.

A hearing today in Collie will hear from Traditional Owners, the Electrical Trades Union of WA, and the Climate Justice Union.

A hearing in Perth on Tuesday will hear from groups including the Minerals Council, the Chamber of Minerals and Energy WA, the WA Conservation Council, Engineers Australia, and Tellus.

A Senate committee report into a Coalition private members Bill to amend the EPBC Act has split on party lines.

The Bill would have introduced a limit on the reconsideration of EPBC controlled action decisions. It would have specified that requests for a reconsideration could only be made within three years of an initial decision.

Labor and Greens senators said the EPBC Act already contains appropriate safeguards to limit the ability of a person to request the reconsideration of a decision.

However, the Coalition said in its dissenting report that the amending Bill would align "strong environmental protection with certainty and predictability for investors".

A Senate select committee on energy planning and regulation is due to report this Friday.

Climate Change Minister Chris Bowen has announced 19 successful projects under round 1 of the Capacity Investment Scheme. The 19 projects have a total capacity of 6.4GW.

The seven NSW projects have a capacity of 3.7GW, plus 900MWh of battery storage, and the seven Victorian projects have a capacity of 1.GW (plus 1,500MWh of storage).

The two South Australian projects have a joint capacity of 574MW, and the three Queensland projects have a capacity of 550MW, plus 1,200MWh of storage.

The successful projects have committed to provide a total of $660 million for community development initiatives, and $280 million for First Nations benefits.

Most of the projects are expected to start operating between 2026 and 2028.

A meeting last week of federal, state and territory environment ministers has discussed a proposal for nationally aligned product stewardship reforms for batteries.

NSW and Victoria presented a draft Regulatory Impact Statement assessing options for mandatory measures to ensure batteries are safely managed throughout their lifecycle.

NSW has also indicated it will introduce legislation next year to tackle the growing risk of battery-related fires, by mandating that battery suppliers ensure safe disposal and product stewardship of their products.

At the meeting, all Ministers, except the Queensland Minister (see Queensland section below), also:

• welcomed Australia’s first National Circular Economy Framework (see directly below).
• noted that the federal government will consult in early 2025 on packaging design guidance, with states and territories emphasising the need for urgent packaging regulatory reform as soon as possible.
• agreed to a stronger national waste policy action plan.
• agreed to coordinated action on an updated PFAS National Environmental Management Action Plan.
• agreed on a joint national action plan to tackle feral cats.

The federal government has released a National Circular Economy Framework, which sets three targets for 2035:

• shrink our per capita material footprint by 10% (this target is based on how much material is consumed to make the products or services used
  in Australia. Per capita, Australia has the highest material footprint of the G20, at 31 tonnes per person).
• lift our material productivity by 30% (in 2019, Australia had the fourth lowest rate of material productivity in the OECD, generating only US$1.20 of economic output for every kg of materials consumed, compared with the OECD average of US$2.50).
• safely recover 80% of our resources (up from the current resource recovery rate of about 63%).

The release of the framework coincides with the release of the final report of the Circular Economy Ministerial Advisory Group, chaired by John Thwaites, which makes 14 recommendations, including for a new Circular Economy Act.

Consultation opportunity - sustainability claims in agriculture. The Department of Agriculture has released a discussion paper on international market requirements for proof of sustainability claims.

"Sustainability, and the ability to demonstrate that a product has been produced
sustainably, is increasingly becoming a key factor in market access negotiations at the government to government, industry to government and business to business levels," the paper says.

Survey responses must be submitted by 24 February.

Consultation opportunity - planning the future of the NEM. The Australian Energy Market Operator is consulting on draft 2025 inputs, assumptions, and scenarios.

AEMO is proposing three scenarios for work including its 2026 Integrated System Plan:

• a refined version of its 2023 Step Change scenario, in which consumers are more hesitant to share their energy resources via their energy retailer, virtual power plants, and vehicle to grid.
• a Progressive Change scenario, which assumes less economic growth, and a weaker and slower energy transition globally, "meaning local benefits from new green industry opportunities are relatively unrealised".
• a Green Energy scenario, involving two variants - Green Energy Exports (but with lower NEM-connected hydrogen production than envisaged in 2023), and Green Energy Industries (which would exclude developments that would support hydrogen exports as an energy carrier).

Consultation closes on 11 February.

Meanwhile, an independent panel reviewing NEM settings has issued a paper specifying issues on which it would value early stakeholder input.

Associate Professor Cris Brack has released his latest independent review of the performance of human-induced regeneration projects registered under the ACCU scheme. The report analyses 33 HIR projects.

Climateworks has issued a report on leading climate policies from Australia's states and territories.

A review of the application of the EPBC Act to large-scale renewables projects, conducted by Herbert Smith Freehills and the Clean Energy Investor Group, identifies ten "quick wins" to solve common problems.

The federal government has released an Offshore Resources Decommissioning Roadmap.

The roadmap notes that 89% of the total mass of decommissioning projects will be offshore from northern Western Australia. The Gippsland Basin in eastern Victoria has 9% of material to be decommissioned, with the rest in the Otway and Bass Basins.

"The pipeline of decommissioning activity in Australia stretches out to 2060 and beyond, and will grow as the offshore wind industry scales up over time," it says.

"Initially, the offshore Gippsland and North Carnarvon Basins will have decommissioning costs of around $11 billion to 2032. Additional decommissioning
peaks are expected in 2033–2037 and 2043–2047 as large projects reach the end of their productive life."

The design of the federal government's Energy Price Relief Plan was largely effective, and its development was informed by sound policy advice, concludes an audit report by the Auditor-General.

The five-year plan, worth up to $3.5 billion and encompassing measures including electricity bill rebates, was developed in response to global energy price volatility triggered by Russia's invasion of Ukraine.

CSIRO has published a series of business case reports exploring the technical and economic feasibility of developing a low emissions carbon capture utilisation and storage (CCUS) hub near Darwin.  

One report outlines a pathway to expand CO₂ capture and storage to more than 25 million tonnes annually by 2040.

A second report concludes that rapid decarbonisation in the Northern Territory will require a combination of technologies like renewable electrification, hydrogen, and CCUS.

A third assesses demand for low-emissions hydrogen, ammonia and chemical feedstocks in the NT's major trade markets - Japan, South Korea, China, Singapore, and Taiwan.

A fourth provides an overview of international CCUS projects, with a particular emphasis on European hub examples, while a fifth examines sector coupling to create a low emissions production hub for ammonia, urea, methanol and derivatives. 

Other reports provide a concept-level overview and costings for a CCUS hub, analyse power generation options, assess transnational CO2 shipping options, and explore opportunities for CO2 utilisation in the NT.

CSIRO has released its draft GenCost report for FY25. Key findings include:

• Large-scale PV capital costs have fallen 8% for two years in a row. 
• Battery costs recorded the largest annual reduction, with capital costs falling 20%. 
• Onshore wind generation costs increased 2%, reflecting ongoing but moderate increases in equipment and installation costs. 
• Gas turbine costings increased 11%, reflecting the additional cost of being hydrogen ready, which is now an industry standard. 
• Modelling nuclear's long operational life factor across all new-build electricity generation technologies presents no unique cost advantage over other technologies. 
• Based on global analysis, the total development lead time for nuclear in Australia would be at least 15 years. 

The federal government has declared an area off northern Tasmania's Bass Strait as suitable for offshore wind development. The government says the zone has the capacity to generate 20GW of offshore wind energy.

The area is the sixth offshore wind zone to be declared - following declarations for Gippsland, the Hunter, the Southern Ocean, the Illawarra, and Bunbury.

The federal government has gazetted Offshore Electricity Infrastructure Amendment (Overlapping Applications) Regulations.

An explanatory statement says the regulations are required to address the interpretation of the offshore wind licensing scheme adopted by the Federal Court in the Seadragon case.

Meanwhile, the government has gazetted new regulations under the Offshore Electricity Infrastructure Act.

The 2024 amendments include licensing scheme requirements for management plans, a design notification scheme, financial security, safety and protection zones, work health and safety, record keeping, and fees. 

Submissions on the draft regulations are available here.

The federal government has launched a $10.8 million Torres Strait and Northern Peninsula Area Climate Resilience Grant Program to build climate resilience and address climate change impacts in the region.

The program which will fund the recruitment of local First Nations climate resilience officers to conduct adaptation actions and projects to support regional climate adaptation.

The Coalition has released costings by Frontier Economics that it says show nuclear power, "offers a cheaper, cleaner, and more consistent alternative, delivering massive savings for Australian families and businesses".

The federal government has gazetted amendment regulations under the Renewable Energy (Electricity) Act to ensure hydrogen production from electrolysis is eligible for exemption from RET liability.

The regulations also adjust the exemption from liability provisions for iron and steel, to better allow for potential future changes to production processes.

Export Finance Australia is providing a US$79 million loan to a major renewable energy project in Thailand, supporting a USD820 million equivalent construction facility arranged by the Asian Development Bank. 

The financing will enable Gulf Energy to develop eight solar projects, and four solar plus battery energy storage system projects, with a total capacity of 649MW.

ARENA's latest annual report says that in FY24 the agency increased funding committed to $392.5 million and doubled the number of projects committed to 72, up from $358 million and 35 projects in 2022-23.

The federal government has released the latest annual Reef Trust Water Quality Achievements report.

Former Reserve Bank deputy governor, Dr Guy Debelle, has been appointed to the CEFC Board.

Dr Debelle is a board member at FundsSA, a non-executive director at critical minerals company Tivan, and co-chair of the ASFI Taxonomy Technical Experts Group that is developing an Australian Sustainable Finance Taxonomy.

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.
• Clean energy and net zero. The Productivity Commission is seeking ideas to inform its recommendations to government on investing in cheaper, cleaner energy and net zero. Suggestions should be submitted by 15 January.

Following a meeting of federal, state and territory environment ministers (above), Queensland Environment Minister Andrew Powell said he would not "shackle the state to costly federal government waste targets".

"Queensland is in the process of updating its waste strategy with the goal of increasing recycling and improving waste recovery, but will not include measures likely to hit Queenslanders, and small businesses with additional costs," he said.

Queensland's environment department is inviting submissions about particular wastes that might be suitable for the preparation of new End Of Waste codes.

The codes specify outcomes that need to be achieved for a waste to be deemed a resource. Submissions must be submitted by 10 February. The call for submissions is made annually.

A hearing this week of a long-running Parliamentary committee inquiry into beneficial and productive post-mining land use will hear from the Queensland Mine Rehabilitation Commissioner, the NSW Auditor General, and the heads of the NSW EPA and the NSW Resources Regulator.

NSW native forest logging businesses "have massively inflated their financial and compensation demands to establish the Great Koala National Park", according to the Ken Henry-chaired Australian Climate and Biodiversity Foundation.  

The Foundation's analysis says that financial figures submitted by the industry to the NSW government overstate payment demands by as much as 600% in some cases, "including $300 million in baseless compensation claims".

As part of the proposal to establish a national park to protect endangered koala habitats in NSW, the state government is negotiating a financial arrangement to cease native forest logging within the GKNP assessment area.

The Foundation is advocating for the establishment of the GKNP, and for the introduction of an Improved Native Forest Management ACCU method.

The latest annual report of Coal Innovation NSW provides an update on technologies to destroy ventilation air methane, and on work to establish CO2 storage potential in the state.

Environment Minister Steve Dimopoulos has notified his intent to gazette the Circular Economy (Waste Reduction and Recycling) (Waste to Energy Scheme) Amendment Regulations 2024.

The regulations, which will differ from the draft version in significant respects, will prescribe matters including a cap on the total amount of waste that can be processed for energy recovery. This will initially be set at two million tonnes of waste a year.

However, according to an update, the government will early next year consult on lifting the cap to 2.5 million tonnes annually.

More details can be found here.

A new Economic Growth Statement from the state government lists the circular economy - encompassing critical minerals and clean energy - as one of five priority sectors.

The five sectors will be the target for a new $20 million Victorian Industry Development Fund. The statement also commits to:

• reducing EES decision timeframes to 18 months or less (a timeframe currently exceeded by more than half of all assessments).
• establishing an Investment Coordinator-General to help smooth the approvals process for state significant developments.
• expanding its Recycled First policy, which currently only applies to major government transport projects, to other major government projects, where this can be done without increasing costs.
• incorporating planning approvals for projects in renewable energy zones into the State Planning Policy Framework, to enable faster planning approval.
• assessing new gas projects through the fast-track Development Facilitation Program.
• releasing a new Renewable Gas Directions Paper, that will will set out the state's approach to biomethane and renewable hydrogen.

The growth statement will be followed by the release of a new industry policy in early 2025.

Consultation opportunity - biodiversity impacts of renewable energy projects. The state government is consulting on proposed new guidance on the impacts of renewable energy facilities on Victoria’s biodiversity.

Consultation materials comprise a discussion paper and a draft handbook for managing the biodiversity impact of renewable energy projects.

The materials favour a "no net loss" approach to biodiversity impacts, rather than a "net positive" approach.

Consultation opportunity - electrification. The state government has developed a Regulatory Impact Statement exploring options and pathways to electrify all new residential and some new commercial buildings.

The RIS examines four options and favours an option involving electrification of all new residential and commercial buildings. The preferred option also includes the replacement of gas hot water and heating with electric at end-of-life in existing residential buildings, with the exception of cookers.

Comments are due by 28 February.

The state government has issued a Critical Minerals Roadmap, which signals the establishment of a Victorian Critical Minerals Coordination Office, and the classification of priority development zones.

The state government will also develop a benefit sharing model for the community and Traditional Owners, and convene an advisory group to investigate the establishment of a critical minerals downstream industry in regional Victoria.

Victoria's critical mineral resources include globally significant quantities of titanium, zirconium, and associated rare-earth elements in mineral sand deposits in the northwest of the state.

Central Victoria has Australia's largest antimony deposits and the nation’s only operating antimony mine.

Promising early-stage mineral exploration for other critical minerals is also underway.

The latest annual Victorian Renewable Energy Target Progress Report states that renewable energy sources accounted for approximately 37.8% of Victoria’s electricity generation in FY24.

In addition:

• 13 large-scale generation projects with a combined capacity of 2,199MW were under construction or undergoing commissioning as at 30 June 2024.
• Victorian households and businesses installed 630MW of rooftop solar systems in FY24, resulting in rooftop solar providing 9.3% of Victoria's electricity generation, up from 7.9% during the previous year.
• 557MW of commissioned 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.

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 Appeal Convenor has issued its first advice that takes into account a recently released state government policy that leaves it to the federal Safeguard Mechanism to regulate greenhouse gas emissions from major projects.

The advice is in its report on 134 appeals lodged over an EPA report recommendation to conditionally approve the expansion of South32's bauxite mine near Boddington, which services its Worsley alumina refinery.

The Appeals Convenor notes that the EPA report preceded the release of the new greenhouse gas policy, but says the EPA was cognisant of the Safeguard, and that in any case the policy is now the measure by which carbon emission conditions must be set.

The Convenor proposed deleting the EPA-proposed greenhouse gas conditions, and inserting new conditions. The proposed new conditions include references to "non-Safeguard GHG emissions", such as those arising from land clearing.

Environment Minister Reece Whitby has decided to accept the recommendations made by the Appeals Convenor on all matters relating to the mine expansion, including those dealing with greenhouse gas emissions.

The state government has appointed an industry advisory board for its new Clean Energy Skills National Centre of Excellence, and named the centre's general manager.

The centre has been allocated $70.5 million in federal and state funding over five years.

The Chamber of Minerals and Energy has released a report on the state's green iron potential.

The EPA has finalised its assessment of Agrimin Ltd's sulphate of potash proposal, recommending the project be implemented subject to conditions.

The state government has awarded grants totalling $3.2 million to six projects, under the latest round of its Carbon Farming and Land Restoration Program.

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 proposed new guidance for modelling the dispersion of air pollutants.

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.

Hearings concluded last week in an International Court of Justice inquiry into the obligations of nations in respect to climate change. Transcript is here, and videos are here.

The Court will deliver its advisory opinion at a date yet to be fixed.

UK Energy Secretary Ed Milliband has released a Plan for Change for the electricity system.

Three major carbon capture and storage projects in Denmark and the UK last week reached their Final Investment Decisions.

Denmark's Greensand Future project is the EU's first full-scale CO₂ storage facility to reach FID. The project aims to commence operations by late FY26.

It will store 400,000 tonnes of CO₂ annually during its early stages, with potential growth to 8 million tonnes per year by 2030.  

In the UK, the Northern Endurance Partnership and Net Zero Teesside Power projects have also reached FID, the first projects to do so in the UK.

The former will develop infrastructure to handle up to 4 million tonnes of CO₂ annually, potentially expanding to 23 million tonnes by 2035. The latter will deliver 742 MW of low-carbon electricity through a gas-fired power plant equipped with carbon capture, capturing up to 2 million tonnes of CO₂ annually for storage.

In the final months of the Biden-Harris Administration, the US EPA has awarded a total of almost US$1.6 billion to 105 projects, under its Community Change Grants Program.

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