Updated EPA Environmental Factor Guideline: Greenhouse Gas Emissions
In November 2024, the Environmental Protection Agency (EPA) released an updated Environmental Factor Guideline: Greenhouse Gas Emissions (Guideline) to outline how and when the Greenhouse Gas (GHG) factor is considered by the EPA in the environmental impact assessment process. The guideline has been updated in light of the 2023 Commonwealth reform to the Safeguard Mechanism.
The Safeguard Mechanism is the Commonwealth policy for reducing the emissions of industrial facilities that emit more than 100,000 tonnes of carbon dioxide equivalent. It does so by legislating baseline limits on the greenhouse gas emissions of the facilities themselves which decline each year until 2030.
The updated Guideline has been produced by the EPA to avoid duplication or conflict with the Safeguard Mechanism. The EPA expects that the emissions reductions required following this assessment are likely to support the reductions legislated in the Safeguard Mechanism, and represent an “as far as practicable” reduction of emissions.
When the GHG factor will be considered
GHG emissions are considered within three categories:
· Scope 1: emissions as a direct result of an activity,
· Scope 2: emissions from the independent consumption of an energy product by the activity, and
· Scope 3: indirect emissions that are generated both upstream and downstream of an activity and which occur as a consequence of the activity.
The EPA will have regard to this guideline when considering a proposal where the GHG emissions are reasonably likely to exceed:
· 100,000 tonnes CO2-e of scope 1 emissions in any year; or
· 100,000 tonnes CO2-e of scope 2 emissions in any year.
In considering whether a project meets this threshold, the EPA will have regard to the combined effect of any existing proposal and the expansion or change.
How the GHG factor will be considered
Notwithstanding that projects will be considered under the Safeguard Mechanism; the EPA considers that it will still be required to consider projects individually and provide advice to the Minister for Environment. The Guideline sets out the information that will be required from proponents in respect of a project’s different emissions:
· Scope 1 Information Option A: Safeguard Mechanism confirmation
Where a project is assessed under the Safeguard Mechanism, confirmation of the assessment and information about how the reduction will be managed must be provided to the EPA.
· Scope 1 Information Option B: Benchmarking and best practice
Where a project is not covered by the Safeguard Mechanism, information provided to the EPA must include how emissions will be reduced, any justifications for the baseline, benchmarking against comparable projects and implementation of best practice measures. In essence, it will be individually reviewed by the EPA.
· Scope 2 Information
Information provided to the EPA in regard to Scope 2 emissions should include what reasonably practicable measures and alternatives have been considered to avoid or reduce emissions, whether emissions are indirectly addressed under the Safeguard Mechanism, and whether emissions are expected to be reduced
· Scope 3 Information
Information provided to the EPA in regard to Scope 3 emissions should demonstrate that consideration has been given to reducing scope 3 emissions where reasonably practicable, as well as a summary of where the scope 3 emissions will be emitted and whether they are reasonably likely to be subject to emissions reduction requirements as scope 1 or 2 emissions.
Conclusion
Where Scope 1 emissions of a particular project are assessed under the Safeguard Mechanism, the project proponent can satisfy their scope 1 requirements under the EP Act by providing a certification of compliance with the Safeguard Mechanism, effectively bypassing any duplication of assessment of these emissions.