Proposed Regulation clarifies energy from waste opportunities in NSW

By Nick Thomas, Alison Packham and Samuel Mursa
03 Feb 2022
A draft pollution control regulation in NSW, which has been released for public comment, confirms many of the restrictions on energy from waste projects announced last year, but also clarifies some opportunities for these projects.

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Proponents and other stakeholders in energy from waste (EfW) projects are getting a clearer idea of where and when EfW projects will be allowed in NSW, with the release of a draft regulation by the NSW Environment Protection Authority (EPA) on 1 February 2022, and there will be some important project opportunities if this proposed regulation becomes law.

The draft Protection of the Environment Operations (General) Amendment (Thermal Energy from Waste) Regulation 2021 is the latest development in the NSW Government's rapidly evolving policy for EfW projects, but is the first of the proposed laws to implement that policy. It is open for comment until 20 March 2022.

How the proposed Regulation works

The proposed Regulation seeks to give effect to the policy outlined by the NSW Government in September 2021, which restricted the areas in NSW where EfW facilities could be constructed and operated. The NSW Energy from Waste Infrastructure Plan 2041 (EfW Infrastructure Plan) identified four specific geographic regions in NSW where EfW facilities would be permissible with consent, and some limited exceptions.

The proposed Regulation imposes a prohibition on carrying out "thermal treatment of waste" if it would involve "energy recovery from waste" and involve any activities (including the treatment itself) which would need an EPA licence under the Protection of the Environment Operations Act 1997 (PEO Act). It then provides a list of exceptions to that prohibition.

The definition of "thermal treatment of waste" covers, for example, incineration, thermal oxidation, gasification, pyrolysis and plasma technologies. However, it excludes (among other things):

  • autoclaving, anaerobic digestion and composting, and the thermal treatment of biosolids, contaminated soil or scrap metal;
  • the thermal treatment of waste plastic to produce plastic products, or inputs for plastic products, where at least 75% of the weight of the waste plastic thermally treated in a 12-month period is used in that way; and
  • the treatment of "eligible waste fuel", as defined in the EPA's Eligible Waste Fuels Guidelines.

The excluded activities are not covered by the proposed Regulation.

The list of exceptions to the prohibition in the proposed Regulation is clearer than in previous policy documents, and differs from them in some significant ways. It includes:

  • the four precincts previously identified in the EfW Infrastructure Plan (ie. Parkes, Richmond Valley, Goulburn Southern Mulwarree and West Lithgow); and
  • any other "activation precinct" (under State Environmental Planning Policy (Activation Precincts) 2020), "regional jobs precinct" (which is not defined [1], former mine site or former thermal electricity generation site, which is identified on a map or specified in a notice published by the EPA in the NSW Government Gazette.

In addition, in what appears to be a transitional measure, the proposed Regulation states that a person is not guilty of an offence against the new prohibition if they carry out an EfW project which:

  • replaces a "less environmentally sound fuel" (which is defined essentially to include coal or diesel), where:
    • that fuel was thermally treated (or lawfully able to be treated) immediately before the Regulation commences operation; and
    • at least 90% of the energy generated from the fuel in a 12-month period is used to power industrial or manufacturing processes on site; or
  • can be carried out lawfully, and was first carried out, before the proposed Regulation commences operation, and is an established and operating activity at the premises immediately before that commencement.

Transitioning to the circular economy

According to the EPA, the proposed Regulation is intended to "ensure that energy from waste plays a sustainable role as NSW transitions towards a circular waste and resource recovery framework".

The EPA also notes that the exclusions from the proposed Regulation "aim to support the transition to a circular economy by ensuring that necessary waste processing and recycling activities involving thermal treatment can continue to lawfully operate throughout NSW after the Draft Regulation becomes law".

Implications of the proposed Regulation

The terms of the proposed Regulation, and the EPA's comments on it, indicate that the NSW Government is seeking to balance the positive contribution which a viable EfW industry could play in a more sustainable economy and the potential environmental effects and community views on EfW activities.

The opportunity to add precincts and sites to the current four precincts in which EfW projects are allowed is an important development in the NSW Government's policy. However, in practical terms, the process for adding a precinct or site is likely to be very time-consuming.

As the EPA also points out, an EfW project, whether or not it is covered by the proposed Regulation, will still need to comply with applicable planning laws and other environmental controls and, in this regard, the NSW Government's policy statements and plans in relation to EfW activities will still have a role to play.

[1] The NSW Department of Planning, Industry and Environment website indicates that currently "planned" regional jobs precincts include (part from the Richmond Valley precinct which one of the four current eligible EfW precincts) precincts in Albury, South Jerrabomberra and the Namoi region.Back to article

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