Introduction
Human-driven climate change is significantly
impacting Australia’s biodiversity (p. 10). While the loss
of climatic habitat caused by greenhouse gas (GHG) emissions is listed as a
key
threatening process under the Environment
Protection and Biodiversity Conservation Act 1999 (EPBC Act), the climate
impacts of individual projects do
not trigger referral
and assessment under the Act.
Numerous proposals to add
a ‘climate trigger’ have been made (pp. 9–10). However, the second
independent review of the EPBC Act (Samuel Review) observed that ‘successive
Commonwealth Governments have elected to adopt specific mechanisms and laws
to implement their commitments to reduce … emissions’ and recommended that the
Act not duplicate that framework (p. 5). Instead, the review recommended new national
environmental standards that require proponents to ‘transparently disclose the
full emissions of the development’ (p. 26).
Accordingly, the recent reforms to the EPBC Act require proponents
of some controlled actions to disclose a reasonable estimate of the GHG
emissions associated with a project, and to identify the strategies and
measures they are taking to manage those emissions. This is an information
disclosure measure intended to support review of the Safeguard Mechanism
(p. 20), the government’s key
policy to reduce industrial GHG emissions.
New disclosure requirements
Proponents of an
action that is determined to be a controlled
action must provide GHG emissions information for the action (new section
84A (yet to commence)). The requirement applies ‘regardless of
whether the information relates to the relevant impacts of the action’.
The regulations can prescribe a threshold below which proponents
are not required to provide a reasonable emissions estimate. The Explanatory
Memorandum indicates that the threshold (p. 160):
… will reduce the reporting burden
for actions that are likely to have low greenhouse gas emissions and
ensure that such requirements are appropriately targeted towards actions
that are likely to result in higher amounts of greenhouse gases being
emitted to the atmosphere. [emphasis added]
Further, ‘requirements
for disclosure will be aligned with requirements under other government
legislation [outlined below] with requirements to be set out in regulations’.
The new disclosure requirements are reflected in other
elements of the EPBC Act reform package, ensuring consistency across different
assessment and approval pathways and under accredited arrangements.
Other legislation relevant to GHG emissions
NGER Scheme and the Safeguard Mechanism
The National
Greenhouse and Energy Reporting Scheme (NGER Scheme), established under the
National
Greenhouse and Energy Reporting Act 2007 (NGER Act), sets out reporting
requirements for annual scope 1 and 2 GHG emissions, energy production and
energy consumption information. Reporting thresholds for emissions are:
The NGER Act also establishes the Safeguard Mechanism, which
applies only to facilities that emit more
than 100,000 tCO2-e of covered scope 1 emissions per year. These
facilities keep their covered emissions at or
below a baseline, which declines
by 4.9% per annum (subject to exceptions) through to 2030 (with subsequent
decline rates yet to be determined). However, as a market-based scheme, facilities
may use a range of measures to manage
‘excess’ emissions, including surrendering carbon
units.
Neither the NGER Scheme or the Safeguard Mechanism ‘assess’
or ‘approve’ the climate impacts of a corporate group or facility, and do not mandate
onsite emissions reductions.
Climate-related financial disclosures
New annual sustainability reporting requirements under the Corporations
Act 2001 require some
companies to disclose climate-related
financial information. The annual statement must (among other things) contain
information about material risks relating to climate, certain information
on financial year emissions, and information about managing emissions and
risks. The requirements are being phased in over 3 years from 1 January 2025.
Sustainability reporting aims ‘to
improve the quality, consistency and comparability of climate-related
financial disclosures to enable users of that information to make informed
decisions’ (p. 4).
Linking the EPBC Act with the Safeguard Mechanism
The new disclosure requirements enable the Environment Minister
to provide GHG emissions information to the Climate Change Authority (CCA) (and
specified others), as
required by the Climate Change
Act 2022.
The CCA advises the Climate Change Minister on preparation
of an annual climate change statement, and in doing so must provide advice
about the operation of the Safeguard Mechanism, including whether:
- safeguard
emissions and net safeguard emissions are declining consistently
with the safeguard outcomes specified in paragraphs
3(2)(b) to (d) of the NGER Act
- amendments
to the safeguard
rules are required to achieve the safeguard outcomes.
The Climate Change Minister must then consider whether amendments
to the safeguard rules are required, to ensure that safeguard facility
emissions decline in proportion to their share of economy-wide emissions.
Conclusion
More clarity on the scope of the new disclosure
requirements, including the level of information needed on emissions management
strategies, will be provided when the regulations are amended in late 2026 or
early 2027. However, it appears that the new requirements will apply to only a
small proportion of controlled actions.
Industry
response has been muted (pp. 6–7). Conversely, environment and climate
stakeholders such as the Australian
Conservation Foundation argue that the new requirements ‘do nothing’ to
advance the protection of protected matters and ‘fall short of the review’s
recommendations for “transparent disclosure” of the “full emissions profile” of
developments put forward for approval’ (p. 3).