Environment and Sustainable Development 5 Minute Fix 40: carbon credits, critical minerals, offsets

27 Jul 2023
5 minutes

Climate change

Commonwealth: "Water rule" removed from carbon credit scheme on 1 June 2024

The Commonwealth Government has made the Carbon Credits (Carbon Farming Initiative) Amendment (Specified Tree Planting) Rule 2023 to remove the requirement for plantation forestry and farm forestry projects in high rainfall locations to meet water interception conditions (the "water rule") under the Carbon Credits (Carbon Farming Initiative) Rule 2015 before they can participate in the Emissions Reduction Fund under the Australian Carbon Credit Unit (ACCU) Scheme.

The water rule has, to date, been regarded as a largely ineffective way of managing water resources and its removal is intended to facilitate emissions reduction within the forestry sector through increased participation in carbon farming and investment in new timber plantations.

Removal of the water rule will come into effect on 1 June 2024. During the transitional period leading up its removal, applications to register new plantation and tree planting ACCU projects in high rainfall areas can be submitted to the Clean Energy Regulator and will not be subject to the water rule, provided they do not commence before 1 June 2024.

The Government has also approved four new regions in South and Central Queensland, North Queensland, Northern Territory and Ord Valley and South-East New South Wales where tree planting projects are deemed unlikely to impact water availability and, subsequently, projects can meet the water rule before its removal.


Commonwealth: Consultation on update of hydrogen strategy and program design

Early this month, the Commonwealth Government announced that consultation has opened on the following:

QLD: Strategy released to achieve prosperous critical minerals sector

The Queensland Government has released its Queensland Critical Minerals Strategy which builds on the Queensland Resources Industry Development Plan (QRIDP) released in May 2023, which provides a 30-year roadmap to grow and diversify Queensland's resources industry and capitalise on the transition to a global low-carbon economy.

Queensland Critical Minerals Strategy includes $245 million of initiatives and forms part of Queensland's integrated framework for sustainable economy growth, Environment, Social and Governance (ESG) excellence, and climate change responsiveness. This funding initiative is in addition to the $68 million promised to the QRIDP and $75 million Queensland Resources Common User Facility (QRCUF) that will be built in Townsville to position Queensland as a leading producer and exporter of critical minerals.

The Critical Minerals Strategy outlines the following four key objectives, as well as new and existing actions:

  1. Move faster, smarter: The Queensland Government is committed to developing a critical minerals sector that moves quickly to take advantage of opportunities that benefit the sector and Queenslanders. This includes establishing Critical Minerals Zones (funding: $75 million), exploring remaining mineralisation in mine waste (funding: $5 million) and facilitating secondary prospectivity for critical minerals.
  2. Maximise investment: The Queensland Government must establish the appropriate market, regulatory and workforce settings to effectively attract investment. Key actions to achieve this include rent reduction for exploration (approximately $55 million in forgone revenue) and profiling and promoting Queensland's unique competitive advantages (funding: $1 million).
  3. Build value chains: Attracting and securing investment in the value chain beyond extraction is important in providing greater and lasting benefits to Queensland. This includes delivering the Critical Minerals and Battery Technology Fund (funding: $100 million).
  4. Foster research and ESG excellence: This includes partnering with industry to build ESG excellence (funding: $1 million) and research and development in circular economy and mining (funding: $8 million).

The Queensland Department of Resources' Live Action Plan tracks the delivery of the targeted short- and medium-term actions aimed at achieving sustainable economic industry reform and growth contained in the QRIDP.

SA: Consultation now open on energy transition: have your say

The SA Government is seeking public feedback and submissions on its newly released Green Paper on the energy transition. The Green Paper is designed to "inform and generate ideas on the challenges impacting our use of energy, both now and in the future, and the opportunities these challenges bring to the state as we transition to a net-zero emissions future by 2050". The feedback and submissions received as part of this consultation process will inform South Australia's White Paper on Energy Transition, which is due to be released later this year.

A key focus of the Green Paper is on South Australia's transition to renewable energy, including the State's ongoing investment and development of hydrogen-based technology, as well as the State's transition to net-zero emissions by 2050. The Green Paper also discusses energy issues facing the State, including managing energy supply through the National Electricity Market and moving towards a more decentralised system of power with greater reliance on renewable energy sources.

Submissions on the Green Paper can be made via the yourSAy page until 11pm on Sunday 13 August 2023.

WA: Approvals team for new pathway for green energy approvals now operational

The WA Government recently announced that its new Green Energy Approvals Team is now operational and will assist in streamlining the approvals process for green energy projects, with more efficient processes and quicker timeframes for environmental assessments and approvals. The WA Government expects that the majority of the projects covered by this new streamlined process will be renewable hydrogen projects, as well as lithium mining and wind energy projects.

This is part of the WA Government's Green Energy Approvals Initiative, which was announced last year and aims to drive long-term investment in green energy projects and its industry more broadly, such as wind and solar power generation, hydrogen-based projects, and manufacturing green energy products. The WA Government is particularly focused on driving investment in green energy projects which will "decarbonise and diversify WA's industrial landscape".

Additionally, a Green Energy Expert Panel has been established to provide the WA Environmental Protection Agency with the information it requires to progress its environmental assessment and approvals process more effectively and efficiently. The Panel will be made up of both Government and industry representatives.

It is understood that the WA Department of Jobs, Tourism, Science and Innovation is also seeking to establish a Green Energy Major Projects Group, which will assist as a "first point of contact" for green energy projects and investment.

VIC: Transmission investment framework for energy transition

In a bid to aid the State's ambitious renewable energy targets, the Victorian Transmission Investment Framework (VTIF) was launched by Minister D'Ambrosio in June 2023 and will see the application of stronger consideration of environmental, cultural, land-use and social factors in the selection of transmission project locations and corridors. This will include engagement with Traditional Owners and other local stakeholders to benefit from community partnerships and regional development to be implemented alongside new transmission projects.

The VTIF will provide the framework for how Renewable Energy Zones (REZs) and major electricity transmission infrastructure will be planned and developed in accordance with planning provisions. New pathways will be determined for planning applications concerning REZs and renewable energy projects, to alleviate particularly onerous steps in the planning approvals process and expend more time consulting with affected landowners and community interests.

New legislation to establish the VTIF is expected to be introduced into the Victorian Parliament in early 2024.


SA: State Planning Commission seeking to implement new planning assessment pathway for outline consent

The SA State Planning Commission is seeking feedback on a new draft practice direction, which it proposes to make under the Planning, Development and Infrastructure Act 2016 (SA) (PD&I Act) to enable outline consent to be granted for specific development aspects ahead of submitting a full planning consent application.

Under the PD&I Act, if an outline consent is granted (by a practice direction) and a subsequent application is made with respect to the same development (subject to any variations allowed by a practice direction), a relevant authority:

  • must grant any consent contemplated by the outline consent; and
  • must not impose a requirement that is inconsistent with the outline consent.

This would not apply where there has been a material change to one or more elements of the development or a new or additional matter requires assessment (subject to any variations allowed by a practice direction). In that case, further notification and consultation may be required in accordance with any provision made by a practice direction, and a relevant authority is not bound by the above to the extent that a new assessment must be made in the circumstances.

The new draft practice direction would allow for an application for outline consent to be sought where the development relates to a Planning Consent that would be:

  • classified as a Performance Assessed Development (ie. development assessed on its merits against the Planning and Design Code by an assessment manager or assessment panel); and
  • assessed by the State Planning Commission as the relevant authority.

Where this applies and after an assessment of the application against the relevant provisions of the Planning Rules, an outline consent may be granted for any of the following aspects of the development in respect of planning consent where the development is not seriously at variance with the Planning and Design Code:

  • Building height: where details of the height, width and length of each building proposed within the development in relation to its surroundings have been provided.
  • Building envelope: where details of the way in which buildings, movement (pedestrian, vehicle and cycling) and open spaces within the development are provided, situated and orientated in relation to each other and retained structures, and to buildings and spaces outside the development, have been provided.
  • Access: where details have been provided of the accessibility to and within the site, for vehicles, bicycles, and pedestrians in terms of the positioning and treatment of access and circulation routes and how these fit into the surrounding access network.
  • Land use: where details have been provided of the use of the land (this can include land uses such as affordable housing, community infrastructure, commercial or retail uses).
  • Density: where details have been provided of the minimum and maximum density with respect to site area; dwelling numbers; or dwellings per hectare.
  • Open space: where details of the location and quantum of land allocated for open space or recreation have been provided.
  • Any other aspect agreed to by an applicant and the relevant authority necessary to determine the application for outline consent (such as tree damaging activity, or demolition of heritage).

A copy of the draft practice direction, the accompanying regulatory changes, and other information on the proposed outline consent scheme can be found via the YourSA webpage.

Feedback can be submitted via yourSAy until Monday 31 July.

Environmental protection

Commonwealth: Approval holders put on notice as Environment Minister announces environmental offsets audit

The Commonwealth Minister for the Environment and Water has announced a comprehensive audit of over 1,000 approved environmental offset sites to assess whether the offset requirements have been met and if the promised environmental benefits have been delivered. Where it is found that the offset requirements have not been met and there is a breach of approval conditions, penalties can be imposed.

Previously, there has been no effective reporting system to monitor compliance with environmental offset requirements, leading to uncertainty around the effectiveness of offset arrangements in preventing environmental decline. The audit will act as a stop gap until the Government implements stronger environment laws as part of its reforms which will include a new offsets standard, monitored by an independent body, Environment Protection Australia.

QLD: Statutory test for koala habitat determination amended for clarification

On 30 June, the Queensland Government made the Nature Conservation and Other Legislation Amendment Regulation 2023 (Amendment Regulation) which makes a number of amendments, most relevantly to the Nature Conservation (Koala) Conservation Plan 2017 (the Plan) and the Environmental Offsets Regulation 2014 (Environmental Offsets Regulation). These amendments clarify the chief executive's considerations when determining an area in a koala district to be a "koala habitat area" and to prescribe a new version of the Queensland Environmental Offsets Policy respectively.

Under the Plan, the Department of Environment and Science may determine an area in a koala district to be a "koala habitat area" if:

  • the area contains koala habitat; and
  • the koala habitat is essential for the conservation of a viable koala population in the wild.

In a recent decision, the Queensland Civil and Administrative Tribunal (QCAT) considered the above statutory test and held that it must be strictly applied when making a koala habitat area determination. In this decision, it was accepted that land can still be "essential" to sustain a viable koala population in the wild, even if there is no evidence of use by koalas and the "essential" character of a koala habitat area will be determined on a case-by-case basis.

The Amendment Regulation now expressly adds to the statutory test that the chief executive may be satisfied the koala habitat is essential for the conservation of a viable koala population in the wild even if the information available to the chief executive does not show evidence of koalas living in or crossing the koala habitat.

The Amendment Regulation also amends the Environmental Offsets Regulation to prescribe a new version of the Queensland Environmental Offsets Policy 1.14 which reflects updates to classification and taxonomy of species prescribed in schedule 1 of the Nature Conservation (Animals) Regulation 2020 and schedule 1 of the Nature Conservation (Plants) Regulation 2020 made by the Amendment Regulation.

WA: EPA releases revised Environmental Factor Guideline – Social Surroundings

On 29 June 2023, the WA Environmental Protection Agency released two new guidance documents: its revised Environmental Factor Guideline – Social Surroundings and Interim Technical Guidance, Environmental Impact Assessment of Social Surroundings – Aboriginal cultural heritage.

These guidance documents have been created to provide guidance on the interaction between the new laws introduced under the Aboriginal Cultural Heritage Act 2021 (WA) (ACH Act) and the Environmental Protection Act 1986 (WA) (EP Act), with respect to proposals and other environmental assessment processes.

Under the Social Surroundings Guideline, the WA EPA may consider social surroundings as a relevant environmental factor when assessing significant proposals or schemes under Part IV of the EP Act. There must be a "clear direct link" between the proposal or scheme's impact on social surroundings; this is where the proposal or scheme will have a "direct effect on the physical or biological environment".

Specifically, the WA EPA can consider any physical or biological impacts to Aboriginal cultural heritage which a proposal or scheme may have, such as (amongst others) "ecological impacts to culturally significant flora and fauna" or "significant visual impacts to ACH cultural landscapes".

The Interim Technical Guidance further expands on the Social Surroundings Guideline, providing more detailed information on how the WA EPA will assess the social surroundings environmental factor within the context of the new ACH Act.

While potential harm to Aboriginal cultural heritage within an activity area is likely to be mitigated by steps taken under the ACH Act, there are still instances where the WA EPA will be required to assess the likely effects of a proposal or scheme, including:

  • where the ACH Act processes are not reasonably likely to meet the EPA's objectives for social surroundings; and
  • for proposals where there is likely to be a significant impact from physical or biological surroundings which directly affect to Aboriginal cultural heritage outside an activity area.

The Interim Technical Guidance also provides guidance on how proponents should have regard to the potential impact to Aboriginal cultural heritage both inside and outside of an activity area.

Proponents are encouraged to provide the WA EPA with information on how they will take reasonable steps to assess and consult on any potential significant harm to Aboriginal cultural heritage values outside of an activity area, caused by the proposal or scheme. This includes consideration of any cumulative impacts on Aboriginal cultural heritage, and proposed ways to avoid and minimise impacts to Aboriginal cultural heritage.

More information on the WA EPA's Social Surroundings Guideline and Interim Technical Guidance can be found here.

Special thanks to Nicole Besgrove (Brisbane) for co-ordinating the ESD 5 Minute Fix and to Isabella Fiolo (Perth), Joseph McDonald (Melbourne), Tom Flower (Melbourne), Sarah Gough (Brisbane) and Jeremy U, Phoebe Hinton and Helen Yan (Sydney) for their contribution to this edition.

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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.