16 Sep 2021

NT Government policies targeting large emitters of GHG emissions and proposing the how and when to offset

By Nicole Besgrove, Karen Trainor and Margaret Michaels

In an effort to manage and offset greenhouse gas emissions in the Territory, the NT Government has released policies aimed at the management of emissions from new or expanded large emitter projects and to guide the offsetting of residual emissions. Submissions on the offsets policy can be made until Friday, 15 October 2021.

In mid-2020, the NT Government finalised its Delivering the Climate Change Response: Towards 2050 A Three-Year Action Plan for the Northern Territory Government (Climate Change Response), which sets a target of net zero emissions by 2050 and details the initial priorities, deliverables and timeframes to deliver this target.

On 1 September 2021, the NT Government released the Greenhouse Gas Emissions Management for New and Expanding Large Emitters policy (Large Emitters Policy) and a draft consultation Greenhouse Gas Emissions Offsets Policy (draft Emissions Offset Policy). The Large Emitters Policy and the Emissions Offset Policy (once made) will form part of the NT Offsets Framework.

Large Emitters Policy

The Large Emitters Policy identifies the NT Government’s minimum expectations for emissions management that apply from 1 September 2021 for all new or expanding industrial and land use development projects likely to be large emitters (large greenhouse gas emitters) which require environmental authorisations.

Under this Policy "large greenhouse gas emitters" include those projects that meet the prescribed thresholds:

Project type

Threshold

Industrial project (eg. petroleum, mining, extractive, refining or manufacturing projects)

Estimated scope 1 emissions of 100 000 tCO2-e in any financial year over the life cycle of a project, not counting emissions generated from land clearing directly associated with the project. 

Land use project that involve the clearing of native vegetation (eg. agriculture or horticulture projects)

Estimated scope 1 emissions of 500 000 tCO2-e generated from a single land clearing action OR cumulatively from multiple land clearing actions on a "property" over time.

The Large Emitters Policy provides specific guidance on estimating the scope 1 emissions to determine if the project threshold is met (ie. to determine whether the industrial or land use project will be classified as a large greenhouse gas emitter) and if so this will trigger the management obligations contained in the Policy.

Projects that meet the relevant threshold, under the Policy must develop and implement a greenhouse gas abatement plan (GGAP) which is to be submitted as part of the environmental authorisation process.

The GGAP is to be specifically tailored for the project and demonstrate how the project will contribute meaningfully to the Territory's target of net zero emissions by 2050, which requires a commitment to an overarching target of net zero emissions by 2050 or justification as to why an alternative target is appropriate.

At a minimum, a GGAP should include (amongst other things):

  • estimates of scope 1 and scope 2 emissions and how these emissions will contribute to the Territory's overall emissions profile;
  • an estimate of the project's scope 3 emissions;
  • an overarching long-term emissions target for the Project and interim targets to achieve that long-term target; and
  • a schedule of periodic public reporting on the progress against the interim and long-term targets.

The GGAP is also required to demonstrate that all reasonable measures have been applied through best practice design, process, technology and management as well as include a description of all strategies proposed to avoid, mitigate and offset the project's scope 1 and scope 2 emissions.

The decision-maker for the environmental authorisation will consider the GGAP in deciding whether or not to grant the environmental authorisation and the conditions that may be imposed. A decision-maker has the ability to impose a condition on an environmental authorisation requiring the preparation and implementation of a GGAP, thereby making it a statutory obligation which must be complied with.

Emissions Offsets Policy

The purpose of the draft Emissions Offsets Policy, which incorporates technical guidelines, is to establish how and when to use offsets in the Territory to compensate for residual greenhouse gas emissions from projects.

Offset requirements can be applied to projects requiring environmental approval under the Environment Protection Act 2019 (NT) (EP Act) or statutory approval under an Act prescribed by the Environment Protection Regulations 2020 (NT).

It is understood that the NT Government intends to prescribe the Petroleum Act 1984 (NT) at the time the Emissions Offsets Policy is to commence and therefore, it will then apply to environment management plans which are required to be approved under the Petroleum (Environment) Regulations 2016 (NT) for regulated activities (ie. an activity or a stage of an activity carried out, or proposed to be carried out, in connection with a technical works programme for a petroleum interest that has, or will have, an environmental impact or environmental risk).

Once made, the Emissions Offsets Policy will be a statutory instrument made under the EP Act and will be considered by assessing agencies and decision-makers to:

  • Determine whether offsets are required: proponents are required to take all reasonable steps to first avoid or mitigate emissions and offsets should be applied where significant residual emissions will remain.
  • Determine the amount of emissions that need to be offset: to be expressed as either a fixed amount or an emissions threshold, above which any emissions will need to be offset.
  • Express offset requirements in an emissions offset approval condition: must state the amount of emissions that need to be offset for each emitting event or period and may require delivery in accordance with an approved emissions offset plan developed by the proponent (eg. a GGAP as required under the Large Emitter Policy discussed above).

Emissions offsets can include:

  • Direct offsets – activities that reduce, remove or capture emissions and can include Australian Carbon Credit Units and other eligible alternative emissions offset units; or
  • Indirect offsets – funding contributions towards research and development that will support emissions abatement in the Territory and contribute to the 2050 net zero target.

The Emissions Offset Policy will also be used to inform regulators when undertaking monitoring, compliance and enforcement action to confirm whether offsets are being delivered in accordance with the emissions offset conditions of environmental authorisations.

The draft Emissions Offset Policy envisages that the NT Offsets Framework will operate in addition to the Commonwealth Safeguard Mechanism and to avoid duplication in offset delivery, any emissions offset under the Safeguard Mechanism may be subtracted from the amount of emissions required to be offset under an environmental authorisation condition.

Submissions on the draft Emissions Offsets Policy can be made until Friday, 15 October 2021 in the manner prescribed here.

If you would like to understand how these policies affect your project(s) or would like assistance with preparing a submission please contact us.

RELATED KNOWLEDGE

Related Knowledge

Get in Touch

Get in touch information is loading

Disclaimer

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.