Oceans and the blue economy

Dr Emily Gibson, Science, Technology, Environment and Resources

Key issue

Australia’s coasts and marine ecosystems are facing a range of threats, including climate change, coastal development, land-based run-off, and direct human uses.

Three major regulatory issues in Commonwealth waters are oil and gas exploration and production (including decommissioning), electricity infrastructure, and aquaculture.

Achieving a balance between competing uses and users will be crucial for achieving a sustainable ocean economy, consistent with Australia’s recent international policy commitments.

With the sixth largest coastline and third largest marine area in the world, the Australian coast and marine environment is intimately linked to the national economy, industry, arts, social lifestyle and cultural identity. More than 85% of Australians live within 50 kilometres of the sea.

The value of Australia’s coast and marine resources is often referred to in economic terms. For example, the AIMS index of marine industry 2020, which assesses the contribution of Australia’s ‘blue economy’ to the nation’s economic bottom line, estimates that the economic output of 14 marine industries was $81.2 billion in 2017–18. In addition, the coast and oceans provide an estimated $25 billion worth of ecosystem services, such as carbon dioxide absorption, nutrient cycling, and coastal protection. Other values cannot be easily measured in economic terms: for example, the intrinsic recreational value of the coast and ocean, and the cultural importance of Sea Country to Aboriginal and Torres Strait Islander peoples.

Coastal ecosystems, including mangroves, seagrass meadows and tidal marshes, and the ocean, play a critical role in the carbon cycle. Coastal blue carbon ecosystems sequester more carbon dioxide than terrestrial forests. Australia is considered a ‘blue carbon hotspot’, with 12% of the world’s blue carbon ecosystems holding 7–12% of global carbon stocks. The Australian Government is taking a range of measures to restore, conserve and account for blue carbon ecosystems. Additionally, in January 2022, a blue carbon method was approved under the Emissions Reduction Fund, allowing projects that restore tidal flows in blue carbon ecosystems to generate Australian Carbon Credit Units.

Australia is a member of several international organisations which collectively seek to increase marine ecosystem protections and achieve a sustainable ocean economy. The High Ambition Coalition for Nature and People and Global Ocean Alliance both aim to protect at least 30% of the world’s land and oceans (in marine protected areas (MPA) or ‘other effective area-based conservation measures’) by 2030. The High Level Panel for Sustainable Ocean Economy (Oceans Panel) seeks to ensure that 100% of the ocean area under national jurisdiction is sustainably managed using sustainable ocean plans by 2025.

Australia’s sustainable ocean plan is yet to be developed. However, a range of other policy and planning instruments exist, including Australia’s oceans policy (1998), marine bioregional plans prepared for 4 of the 6 Commonwealth marine regions (all released in 2012), and 10–year management plans for Commonwealth marine parks (all updated in 2018). The new Government has committed to undertaking statutory reviews of marine park management plans (noting these cover approximately 20% of Australia’s exclusive economic zone) and making changes based on scientific evidence and stakeholder consultation.

State of the coast and oceans

The 2016 State of the environment report highlights the multiple pressures impacting coastal and ocean systems and processes, operating at different spatial and time scales. In 2021, researchers identified 5 coastal and marine ecosystems classified as ‘collapsing’: the Great Barrier Reef (GBR), mangrove forests of northern Australia, Ningaloo Reef, Shark Bay seagrass beds, and Great Southern Reef kelp forests. Stakeholders, including the Australian Marine Conservation Society, have expressed concern that the major parties policies are inadequate to address key threats, including climate change and land clearing.

The World Heritage-listed GBR receives significant investment from the Queensland and Australian Governments to address threats including climate change, coastal development, land-based run-off, and direct human uses. Notably, in the summer of 2021–22, the GBR experienced its fourth mass bleaching event since 2016- and the first one during a La Niña year (which are typically associated with cooler ocean temperatures).

However, the Great Southern Reef receives considerably less attention and investment- despite encompassing 8,100 km of coastline from Western Australia (WA) to NSW. The Great Southern Reef is home to diverse and unique species and incorporates the only marine ecological community listed as endangered under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act), the Giant Kelp Marine Forests of South East Australia. The Great Southern Reef faces similar threats to the GBR, compounded by ocean temperatures warming at 2–4 times the global average and range expansion of species, such as long-spined sea urchins and tropical herbivorous fish that graze on and reduce cover provided by kelp and seagrasses. Marine scientists and advocates- as well as the Australian Greens- are arguing for greater recognition of the Great Southern Reef to support sustainable and adaptive management across relevant state and Commonwealth jurisdictions.

Governance of the coast and oceans

Governance of Australia’s coasts and oceans is shared in accordance with the Offshore Constitutional Settlement (OCS) by the Commonwealth, state and Northern Territory (NT) governments. Local governments also play an important role with respect to coastal zone planning and management.

The OCS, established in June 1979, provides that the states and NT regulate activities in coastal waters (from the territorial sea baseline out to 3 nautical miles). The Commonwealth regulates activities in offshore areas (those beyond 3 nautical miles, encompassing the exclusive economic zone and Australian Fishing Zone). The Commonwealth has entered into separate Joint Authority arrangements with Queensland, WA and the NT to enable certain fisheries that straddle coastal and offshore waters to be managed under state legislation.

These arrangements coexist with Aboriginal and Torres Strait Islander peoples’ traditional estates, which include land and marine areas (often referred to as Sea Country). Indigenous customary and subsistence fishing and other marine resource rights are recognised to some extent in all Australian jurisdictions. Recent initiatives- including Aboriginal Coastal Fishing Licences in the NT and the allocation of abalone quota in Tasmania- are providing commercial opportunities. Sea Country is also included in 25 of 78 Indigenous Protected Areas (IPAs), while over a quarter of the 126 Indigenous ranger groups undertake a range of Sea Country management activities. Indigenous ranger programs provide positive outcomes for employment, the environment, and Indigenous mental health, and the incoming Government has committed to expanding these programs.

Australia’s marine parks, including 2 recently declared Commonwealth marine parks in the Indian Ocean Territories, cover more than 4 million km2 or 45% of Australia’s waters. However, a 2021 study found that only 25% are fully protected (International Union for Conservation of Nature (IUCN) Category Ia and II). The previous government oversaw a large-scale downgrading of marine protections when, in 2018, approximately 1 million km2 of the total MPA estate (31%) was rezoned. Around half the downgraded MPAs were offset by increased protections in other MPAs. Downgraded areas were opened up to activities such as commercial fishing and oil and gas exploration under a range of ‘class approvals’, prior usage rights, or licenses.

Regulatory issues in the blue economy

Offshore oil and gas, and greenhouse gas storage

The Offshore Petroleum and Greenhouse Gas Storage Act 2006 (OPGGS Act) is the predominant framework regulating offshore oil and gas and greenhouse gas storage activities. Oil and gas titles cover 392,278 km2 of the Commonwealth offshore area, predominantly to the north-west of WA and in Bass Strait.

The National Offshore Petroleum Titles Administrator (NOPTA) issues titles for offshore oil and gas and greenhouse gas storage activities, on the advice of the relevant Commonwealth–state/territory Joint Authority or, in some circumstances, the Commonwealth Minister for Resources.

The National Offshore Petroleum Safety and Environmental Management Authority (NOPSEMA) regulates offshore work health and safety, well integrity, and environmental management. NOPSEMA’s environmental management authorisation process has been endorsed in a strategic assessment under the EPBC Act. This means that petroleum exploration and production, and greenhouse gas storage exploration (with limited exceptions) do not require separate approvals under the EPBC Act.

The Department of Industry, Science, Energy and Resources (DISER) releases new areas for exploration each year, with provision for public consultation. In 2021, the department also released areas for potential greenhouse gas storage opportunities, consistent with the Morrison Government’s support for carbon capture and storage (CCS).

There is considerable community and stakeholder concern about offshore oil and gas projects. These concerns include the provision of grants and other subsidies in light of the need to decarbonise economic activity, potential for oil spills, impacts of seismic testing on marine mammals and commercial fisheries, conflicts with recreation activities, and visual impacts.

Following a sustained community-led campaign, the Australian Government, as part of the Commonwealth–NSW Joint-Authority, is taking steps to refuse an application to extend a petroleum exploration permit (known as PEP-11) for an area off the NSW central coast. There is also community concern about on-going and proposed developments in the Great Australian Bight and Bass Strait, including near the Twelve Apostles (Vic) and King Island (Tas). The Australian Greens and some independent federal parliamentarians have advocated for a moratorium or ban on new oil and gas developments.

The decommissioning of offshore oil and gas infrastructure emerged as a significant issue during the 46th Parliament. Titleholders have an ongoing legal obligation to maintain all structures and equipment on their titles in good repair and to decommission (that is, remove) all equipment and other property as soon as it ceases being used or required for future use. However, this has not always occurred in a timely, safe and environmentally responsible manner, with some companies seeking permission to cap wells and leave associated equipment in place. The decommissioning liability for Australia’s offshore petroleum industry has been estimated at approximately $60 billion over the next 50 years.

In February 2021, the Government took over responsibility for the operation and decommissioning of the Northern Endeavour Floating Production Storage and Offloading (FPSO) facility following the financial collapse of its owner. In April 2022, the Parliament passed legislation imposing a temporary levy on offshore petroleum production licence holders to recover the cost of decommissioning the Northern Endeavour. This has been estimated at up to $1 billion.

Following a review of the decommissioning framework, the Parliament passed amending legislation in September 2021 to increase oversight of changes in control of titleholders, and to expand existing powers to ‘call back’ previous titleholders to decommission infrastructure and remediate the marine environment where the current or immediate former titleholder is unable to do so (known as ‘trailing liability’). At the direction of the Australian Government, NOPSEMA is maintaining a heightened focus on decommissioning, consistent with the Government’s enhanced decommissioning framework.

Offshore electricity infrastructure

Australia is regarded as having some of the best wind resources in the world, providing significant opportunities as a bulk source of clean energy. The Blue Economy CRC estimates the technical offshore wind resource as 2,233 gigawatts (GW) – significantly more than Australia’s current and projected electricity demand. While much of this resource is located in the coastal regions stretching from WA to south-east Australia, there are reported benefits of co-locating offshore wind infrastructure near existing depreciating assets (such as thermal coal power plants) and energy-intensive industries (see Figure 1).

Figure 1         Supply and demand potential for offshore wind energy

infographic of map of Australia showing supply and demand potential for offshore wind energy

Source: NOPSEMA, May 2022.

To support offshore electricity infrastructure development, the 46th Parliament passed the Offshore Electricity Infrastructure Act 2021 (OEI Act) in December 2021; the Act commenced on 2 June 2022. The OEI Act establishes a regulatory framework and provides an expansive definition of offshore renewable energy resources (wind, tidal, solar, rain, and geothermal, among others), while offshore infrastructure includes fixed or tethered infrastructure for the storage, transmission or conveyance of electricity.

The OEI Act allows the relevant minister to declare areas as suitable for offshore renewable energy infrastructure, and to make licensing decisions. In April 2022, the Morrison Government announced that Bass Strait would be the first priority area assessed for offshore wind developments.

The Offshore Infrastructure Registrar provides advice to the minister who makes licensing decisions. The Offshore Infrastructure Regulator (designated as NOPSEMA) will oversee health and safety, infrastructure integrity, environmental management, and financial security for offshore infrastructure activities. Separate environmental approvals will be required under the EPBC Act.

The operational arrangements of the framework will be detailed in regulations, which underwent consultation in early 2022.

Offshore aquaculture

The production value of Australia’s aquaculture sector is forecast to exceed $2 billion in 2021–22 (more than wild-catch fisheries at $1.39 billion). This exceeds the 2017 National aquaculture strategy’s projection for 2027. While over half of this value ($1.36 billion) is predicted to flow from salmonids (salmon and trout) farming, other important species include rock lobster, prawns, southern bluefin tuna, abalone and pearls. The Australian seaweed industry blueprint also highlights opportunities for the development of seaweed industries.

At present, aquaculture occurs in land-based operations (for example, hatcheries) and in coastal waters, regulated by the states and NT. However, offshore aquaculture is becoming more feasible due to improvements in technology; it also offers potential environmental and resource access benefits. A recent parliamentary report recommended increased regulatory efficiency and transparency, including consistency across jurisdictions, stronger biosecurity controls, and the development of aquaculture in Commonwealth waters.

According to the National aquaculture strategy, the Australian Government supports using Commonwealth Fisheries Management Act 1991 (FMA Act) provisions to enable state and NT governments to extend existing aquaculture legislation and management into Commonwealth waters. Any activities likely to have a significant impact on a matter of national environmental significance will require approval under the EPBC Act. However, assessments and approvals could potentially be delegated to states and territories as part of bilateral agreements.

Australia’s first offshore aquaculture project is likely to occur in Commonwealth waters north-east of Tasmania. In September 2021, the Commonwealth and Tasmanian Governments entered into a memorandum of understanding to allow a trial examining the economic, environmental and operational feasibility of offshore aquaculture. The Tasmanian Government amended the Living Marine Resources Management Act 1995 to allow for ‘marine farming of fish for research purposes’. The subsequent Commonwealth and Tasmanian Government  agreement allows ‘marine farming of fish for research purposes’ to be carried out in these specified waters, managed under Tasmanian law.

In response to public submissions, the trial area was reduced. Concerns raised include potential negative impacts on the local ecology, biodiversity and environment, animal welfare and habitat impacts, attraction of predators, and conflicts with recreational activities and local fishing operators. This follows long-standing environmental sustainability concerns about salmonid aquaculture in Tasmania, compounded by the mass salmon deaths in Macquarie Harbour during 2017–18.

The trial may provide a template for future aquaculture development in Commonwealth waters. However, devolved Commonwealth regulatory powers are unlikely to provide consistency across all facets of aquaculture, especially relating to licence and lease arrangements.

Further reading

Blue Economy CRC, Offshore Wind Energy in Australia, Final project report, 2021.

Leah Ferris and Liz Kenny, Offshore Electricity Infrastructure Bill 2021 [and] Offshore Electricity Infrastructure (Regulatory Levies) Bill 2021, Bills Digest, 27, 2021–22,
(Canberra,: Parliamentary Library, 21 October 2021).

Emily Gibson, Offshore Petroleum (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021 [and] Treasury Laws Amendment (Laminaria and Corallina Decommissioning Cost Recovery Levy) Bill 2021, Bills Digest, 32, 2021–22, (Canberra: Parliamentary Library, 19 November 2021).

K Roberts, O Hill and C Cook, ‘Evaluating Perceptions of Marine Protection in Australia: Does Policy Match Public Expectation?’, Marine Policy, 2020, 112, e103766.


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