Environment and Sustainable Development 5 Minute Fix 34: Safeguard Mechanism, hydrogen, offshore petroleum, critical minerals

02 Feb 2023
5 minutes

Climate change

Commonwealth: Third round of consultation for reforms to the Safeguard Mechanism

The Commonwealth Government has released proposed reforms to the Safeguard Mechanism as a key step in supporting emission intensive industries to contribute to Australia’s net zero by 2050 target and remain competitive in the decarbonising global community. The Safeguard Mechanism reform package follows a previous two rounds of consultation and consists of a consultation paper and draft legislative rules.

The Safeguard Mechanism Reforms Position Paper as supported by the draft subordinate legislation proposes the following key reforms (amongst others) to reduce baseline emissions of Safeguard-covered facilities by 4.9% each year to 2030:

  • retention of the existing production-adjusted (intensity) baseline framework;
  • setting of new "best practice" benchmarks for new facilities and a hybrid approach regarding the setting of baselines for existing facilities, initially weighted towards the use of site-specific levels intensity values and transitioning to industry average emissions intensity values by 2030; and
  • tailored treatment for emission-intensive, trade exposed facilities to manage competitiveness and carbon leakage risks.

A suite of factsheets have been released as supporting documents which explain the key aspects of the reforms.

Submissions on the Safeguard Mechanism reform package can be made until 24 February 2023.

In conjunction with the release of the Safeguard Mechanism reform package, the Government has released a consultation paper on the proposed detailed design and implementation of the $1.9 billion Powering the Regions Fund (PRF) which is aimed at assisting regions to attain the benefits of Australia transitioning to net-zero by focusing on decarbonising existing industries, developing new clean energy industries, workforce development, and purchasing carbon credits. The Government has announced that $600 million in funding from the $1.9 billion PRF will be allocated to a Safeguard Transformation Stream for trade-exposed Safeguard facilities.

The PRF – Consultation Update Paper sets out feedback received to date, the preliminary design options for the PRF and a series of questions which relate to key issues raised by stakeholders.

Submissions on the PRF can be made until 3 February 2023.

TAS: Tasmania’s sector-based emissions to be published annually

The Climate Change (Greenhouse Gas Emissions) Regulations 2022 (Tas) commenced on 21 December 2022 for the purposes of the Climate Change (State Action) Act 2008 (Tas).  Relevantly, the Regulations:

  • prescribe the methods of measuring greenhouse gas emissions for specified sectors, including energy, waste and land use; and
  • require the Minister for Environment and Climate Change to annually publish Tasmania’s baseline figure; and the reduction in greenhouse gas emissions for the relevant year into the Gazette.

WA: Proposed amendments to petroleum framework, including transport and storage of GHG

Consultation is now open on proposed amendments to the petroleum regulatory framework. Three pieces of draft legislation have been released which propose a raft of amendments to the Petroleum and Geothermal Energy Resources Act 1967 (WA), Petroleum Pipelines Act 1969 (WA), and Petroleum (Submerged Lands) Act 1982 (WA), namely the:

  • Draft Petroleum Legislation Amendment Bill (B) 2023 – proposes a framework for the transport and permanent storage of greenhouse gases (GHG) in Western Australia which would include pipelines for the conveyance of GHG substances and the injection and permanent storage of GHG substances within certain land, including certain submerged lands adjacent to the Western Australia coast. The proposed amendments include the creation of new GHG exploration permit, retention lease, injection licence, special prospecting authority and access authority in order to permit and facilitate the transport and storage GHG substances. The proposed amendments are shown in marked-up versions of the three Acts and submissions can be made until 14 April 2023 in the manner prescribed here. It is understood that the Department will provide a consolidated response following consultation.
  • Petroleum Legislation Amendment Bill 2022 – proposes amendments to enable the electronic service of documentation under the petroleum regulatory framework. Submissions on the draft Bill may be made until 24 February 2023 in the manner prescribed here.
  • Draft Petroleum Legislation Amendment Bill (No.2) 2022 – proposes amendments to enable exploration of naturally occurring hydrogen, and will amend provisions in relation to the environment, royalty calculations, underground storage and additives. Submissions can be made until 24 February 2023 in the manner prescribed here.

It is understood that the Government intends to introduce both bills to Parliament as one amendment package.


NSW: $10 million allocated to Local Government Waste Solutions fund

The EPA has announced it will offer $10 million in grants to local councils and regional waste groups over the next five years. The program is part of the Government’s push to reach their 2030 targets which include reducing litter by 60% and improving the average resource recovery waste from waste streams to 80%. In the first year of the program, Councils can apply for grants of up to $200,000 and waste groups will be entitled to a maximum of $400,000.

There is $2 million in funding allocated for the program in 2023. Applications for this first round of funding opened 16 January 2023 and will close 31 March 2023.


QLD: Planning scheme drafting guidance for hydrogen developments

In 2019, the Queensland Government released the Queensland Hydrogen Industry Strategy 2019-2024 to assist with the development of Queensland’s hydrogen industry by focusing on:

  • supporting innovation;
  • facilitating private sector investment;
  • ensuring the policy framework is effective;
  • building greater community awareness and confidence; and
  • facilitating skills development for new technology.

In corroboration with the Strategy, the Government established the Hydrogen Industry Development Fund to generate greater investment and commitment to hydrogen projects in the State.

As a next step, the Government has now released Hydrogen developments – Guidance for local government in plan drafting to:

  • assist local governments in supporting the growth of the hydrogen industry in Queensland and nationally; and
  • ensure that local planning schemes are able to adequately regulate hydrogen activities.

The guidance document sets out those key areas in a planning scheme where hydrogen development can be supported, which includes strategic outcomes, zoning, categories of development and assessment, definitions (including the inclusion of industrial thresholds), and assessment benchmarks. Guidance is also provided on when a hydrogen activity may be considered ancillary to the primary use.

QLD: Is Queensland set to become the battery capital of Australia?

With the world transitioning to a low-carbon future the Queensland Government has released the Queensland Battery Industry Strategy discussion paper aimed at developing the multi-technology battery strategy for Queensland to become Australia’s battery industry leader which will assist in:

  • delivering the Australian Government’s investment of up to $100 million in an Australian-Made Battery Precinct in Queensland; and
  • supporting the Queensland Governments $62 billion investment into the Energy and Jobs Plan.

The discussion paper provides stakeholders the opportunity to have their say in how this transition is rolled out as the feedback will assist in the ongoing development of the Queensland Battery Industry Strategy which is expected to be released mid-2023. The discussion paper is open for feedback until 31 March 2023.


Commonwealth: Consultation requirements when preparing environmental plans for offshore petroleum activities: have your say

Following the recent Federal Court decision in Santos NA Barossa Pty Ltd v Tipakalippa [2022] FCAFC 193, the Federal Minister for Resources, Madeleine King, directed the National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) to improve guidance to industry on what is expected in relation to consulting Traditional Owner groups.

NOPSEMA has now released a Guideline titled Consultation in the course of preparing an environment plan which is aimed at providing clarity and transparency on the legal requirements, including those directions contained in the Federal Court decision, for consultation with "relevant persons" by applicants and titleholders when preparing their environmental plans prior to submission to NOPSEMA.

Submissions on the Guideline can be made until 15 March 2023.

WA: Alternative authorisation process for minimal disturbance, low environmental risk mining activities proposed

The Department of Mines, Industry Regulation and Safety has released a discussion paper on the Eligible Mining Activity Framework for consultation. This framework provides for a new alternate authorisation process for certain activities that are minimal in disturbance, have low environmental impacts and risks and can be managed through the imposition of standard conditions, in order to streamline approvals and decrease time delays.

The Discussion Paper sets out the proposed framework, including the:

  • draft criterion for Eligible Mining Activities – this is to be based on the nature, scale and location of activities and an indicative list of activities has been provided which includes:
    • Exploration Activities – drilling and associated activities such as sumps and tracks (excluding activities requiring cut and fill construction) and test pits;
    • Prospecting Activities – scraping and detecting, and associated activities such as tracks (excluding activities requiring cut and fill construction) and excavations, including trenches and costeans, and associated activities such as tracks (excluding activities requiring cut and fill construction); and
  • draft standard conditions for each Eligible Mining Activity – the conditions are expressed as 19 intents which include (amongst others) avoiding significant vegetation, protecting viability of rehabilitation resources, intercepting, storing and containing groundwater and other fluids to prevent discharge, no activities in bed or bank of a watercourse and no impacts to riparian vegetation and rehabilitation of all ground disturbing activities within 6 months of completion. It is proposed that these will be refined and reviewed for clarity and enforceability.

Submissions on the discussion paper can be made until 10 March 2023 in the manner prescribed here.

WA: Insight into expectations for Programme of Work applications and rehabilitation

The Department of Mines, Industry Regulation and Safety (DMIRS) has released the following guidance documents for consultation:

  • Draft Programme of Work Guidance – provides clarity on the requirements and preparation of a programme of work application. This Guidance states that DMIRS expects (amongst other things) that the environmental management and rehabilitation commitments in the Programme of Work application will be committed to and that DMIRS is proposing to introduce a new tenement condition which will require tenement holders to record, and provide records if requested, of all rehabilitation activities undertaken.
  • Draft Exploration and Prospecting Rehabilitation Guidance – outlines DMIRS’ expectations on rehabilitation for mineral exploration and prospecting. This guidance also includes further information on DMIRS’ proposed new tenement conditions. In addition to a condition requiring the provision of a rehabilitation report upon request, DMIRS’ proposes to introduce standard conditions to:
    • require compliance with an approved programme of work for exploration and prospecting activities; and
    • clarify rehabilitation timeframes, being the earlier of 6 months from the infrastructure no longer being required or activities being complete, or 6 months from the relevant programme of work expiring, or as otherwise approved in writing by DMIRS.

Submissions on the draft guidance documents can be made until 1 March 2023 in the manner prescribed here.

Environmental, Social, and Corporate Governance (ESG)

International: Australia commits to ESG for critical minerals

Australia has signed on to the Sustainable Critical Minerals Alliance alongside other nations including, Canada, the United Kingdom, France, Germany and the United States. This initiative is a commitment to sustainability and the highest ESG standards for mining and the critical minerals sector. By signing this, Australia has committed to voluntarily working to development and use critical minerals that:

  • employ a nature forward approach – collaboration with industry on practices that prevent biodiversity loss, protect species at risk and support net-positive benefits to the environment;
  • support local and Indigenous communities – promote safe working conditions and responsible labour standards, diverse and inclusive workforces and respecting the rights of, and supporting, Indigenous and local community peoples and benefits;
  • fight climate change - reducing greenhouse gas emissions and working towards achieving net-zero by 2050 by promoting net-zero mining practices;
  • restoring ecosystems – adopting requirements for reclamation and remediation to close and return mines to their natural state and accountability of parties responsible for environmental harm; and
  • build a circular economy – accelerating the reuse and recycling of critical minerals.

Commonwealth: Industry-led initiative for a sustainable finance taxonomy: have your say

The Australian Sustainable Finance Institute (ASFI) is working closely with the Federal Government to develop an Australian sustainable finance taxonomy. A part of its Australian Sustainable Finance Institute Taxonomy Project, the ASFI has released the Designing Australia’s sustainable finance taxonomy paper which is aimed at guiding public companies on the reporting of climate impact and sustainability initiatives and provides 15 recommendations, including:

  • guiding principles should be – credibility, usability, interoperability, prioritisation and impact;
  • the main purposes of the taxonomy should be to guide capital flows into sustainable economic activities that support climate mitigation, address greenwashing and guide a transition towards a circular economy;
  • the taxonomy should cover all key sustainability objectives;
  • the taxonomy should be underpinned by internationally recognised credible, science-based, technical screening criteria; and
  • a “do not do significant harm” criterion should be included in the taxonomy.

The paper recommends Australia adopts a traffic light system to distinguish between activities which align with taxonomy objectives (green activities), those on a pathway to alignment with taxonomy objectives (transition activities) and those which have no potential for alignment, are unsustainable or do significant environmental harm (excluded activities). The recommendations are open

Commonwealth: Directors take note – Reforms on the horizon for climate-related financial risk disclosure in Australia

The Australian Treasury has released a consultation paper outlining the Government’s commitment to standardising climate-related financial disclosure and broad reform to ensure that Australia has a sustainable financial framework. The Treasury has released this consultation paper, which focuses solely on climate disclosure reforms, due to the growing need to provide certainty to investors and businesses with the growing risk from, and need for mitigation of, climate change and to ensure that Australia remains aligned with other international jurisdictions. The Government also proposes to introduce standardised reporting requirements, including for greenhouse gases, governance, and risk management.


Submissions can be made until 17 February 2023 in the manner prescribed here. There are six reform principles against which submissions will be considered and which will guide the reforms and final design:

  1. support climate goals, including new zero emissions by 2050;
  2. improve information flows;
  3. well-understood and transparent;
  4. internationally aligned;
  5. scalable and flexible to future developments; and
  6. proportional to risk.


NT: Final biodiversity offsets policy guideline published

In October 2022, we examined the NT Government’s release of the Greenhouse Gas Emissions Offsets Policy and Technical Guidelines, and draft Biodiversity Offsets Policy and Guidelines, which form part of the NT Offsets Framework. The draft Biodiversity Offsets Policy and Guidelines, which was the subject of consultation until 14 November 2022, are designed to compensate for impacts on biodiversity at one site by requiring conservation and/or restoration activities elsewhere, ended on 14 November 2022.

By Gazette Notice on 10 January 2023, the Minister for Environment, Climate Change and Water Security, Lauren Moss, published the final version of the guidelines, "Biodiversity Offsets Policy: Northern Territory Offsets Framework”, under the Environment Protection Act 2019.

Environmental protection

NSW: Court provides further clarification on the rule against duplicity

A man charged with three offences under the Protection of the Environment Operations Act 1997 (POEO Act) attempted to have the NSW EPA summonses set aside on various grounds, including that the condition 10 offence summons was duplicitous. This offence related to the individual’s storage of waste oil and wastewater processing by-products which were found to have contaminated the land. The storage amount of the liquid stored went beyond the allowed amount 43 times, all of which were included in the single summons.

In her decision, Justice Pepper set out the principles for duplicity in summonses, including that the rule against duplicity:

  • prohibits a single count in a summons charging a person with the commission of more than one offence;
  • is one of fairness to the defendant, its purpose is that there is no uncertainty to the offence charged; and
  • has two exceptions:
    • where the alleged offence is of a continuing nature or obligation; and
    • where acts from part of the same transaction or criminal enterprise.

The defendant argued that:

  • each time the liquid went above the allowed amount was a separate offence, and it was not a continuing obligation;
  • if the EPA could only establish a single occurrence when Condition 10 was not complied with, then it was not a continuous offence but multiple separate offences; and
  • he could rely on the section 91(5) POEO Act defence of a reasonable excuse.

Justice Pepper held that because of the wording of Condition 10, and the fact that there were gaps between the alleged breaches of Condition 10 when the defendant was complying with the rules, this was not a singular continuing offence and as such the first exception did not apply.

However, Justice Pepper did find that the defendant’s activities met the second exception as a single criminal enterprise. The defendant was required to comply with the clean-up notice issued under the POEO Act and the continued failures to do so represented a single criminal enterprise because, using the case of Walsh v Tattersall [1996] HCA 26 analogously, the:

  • failures to clean up were temporally connected;
  • breaches of the notice were all similar acts;
  • acts occurred at the same place and related to the same infrastructure; and
  • the defendant’s intent was consistent throughout the process.

For these reasons, the argument of duplicity failed. This is distinct from a previous case where Justice Pepper found that the summons was duplicitous because it alleged a number offences relating to discharges rather than alleging a single offence.

NT: Chain of responsibility bill receives assent – now awaiting commencement

The Environment Protection Legislation Amendment (Chain of Responsibility) Bill 2022 (NT), which was passed by the NT Parliament on 20 November 2022, received assent on 16 December 2022 and will commence on the day fixed by the Administrator by Gazette notice (but no later than 1 July 2024).

In addition to inserting new chain of responsibility provisions into the EP Act which only apply to the onshore petroleum industry at this stage, the Act also creates new powers and duties when entering land or premises to comply with an environment protection notice.

Relevantly, the EP Act has been amended to give a person or a related person (including their employees) the power to enter land or premises where an environmental protection notice requires them to do so in order to comply with an environment protection notice. This applies where that person or related person does not have an existing right to enter the relevant land (for example, is not the owner or occupier or does not otherwise have a right of access) and also extends to the following, who have been engaged by the person or related person:

  • a “contractor” or an employee of a “contractor” engaged to carry out works; and
  • a “monitor” or an employee of a “monitor” engaged to monitor the carrying out of the works.

The amendments clarify the requirements which must be satisfied before the land or premises may be entered including, owner or occupier consent and notice where no consent given. Entry to land or premises is allowed without consent or notice in an emergency where there is a risk of environmental harm if the required works are not conducted immediately.

Prior to entry, a person who proposes to enter land or premises, must give written notice to the CEO of their intention of the person, a contractor or monitor (or their employees) to enter 10 business days before entry or in the case of emergency, oral notice to the CEO must be given as soon as possible before, on or after entry or written notice 10 business days after (whichever comes first).

The amendments specify what may be done on the land or premises upon entry and the duties that apply. Compensation provisions are included which allow for the recovery of reasonable costs for loss or damage that results from an action taken by a person, their contractor or monitor in the course of their entry and work undertaken for compliance with an environment protection notice.

Offences will apply for the failure to give notice to a land owner or occupier and failure to comply with a duty on entry. It will also be an offence for a person to intentionally obstruct another person from complying with an environment protection notice.

Special thanks to Sarah Ashley (Brisbane), Shira Rosenblum (Melbourne), Isabelle Macdonald (Perth) Madeleine Grant (Darwin) and Eli Hall (Sydney) for their contribution to this edition.
Clayton Utz communications are intended to provide commentary and general information. They should not be relied upon as legal advice. Formal legal advice should be sought in particular transactions or on matters of interest arising from this communication. Persons listed may not be admitted in all States and Territories.