This article was first published in Australian Energy Daily © Peter Milne.
Industry has firmly told the WA Environmental Protection Authority to leave greenhouse gas emissions reduction to the federal government and align itself with the WA government’s emerging climate policy.
There was also no support from major players for the EPA to follow BHP’s drive to consider scope 3 emissions - the greenhouse gases produced by the use of a company’s products.
Yesterday the EPA released the almost 7,000 submissions it received into a review of how it assesses the greenhouse gas impact of projects. Environmental action groups spurred the majority of submissions, which followed a pro-forma template.
The submissions from industry showed it is still reeling from the EPA’s March guidance that it would recommend new large projects offset all their carbon emissions.
Sustained industry condemnation led by Woodside chief executive Peter Coleman resulted in the EPA withdrawing the guideline a week after issuing it for further consultation.
At the time EPA chair Tom Hatton said the authority “does not resile from the need to reduce WA’s greenhouse gas emissions” but understood the advice had to be more detailed and practical.
Since the Paris Agreement benchmark year of 2005 WA emissions have risen 23% while emissions from all other states have dropped 10% or more.
Woodside argued in it submission that while the EPA may believe the federal government's emissions reduction efforts were insufficient, that did not justify usurping the role of the national government “any more than if a WA Treasurer is dissatisfied with monetary policy settings pursued by the Reserve Bank of Australia they should set an independent WA interest rate”.
The Association of Mining and Exploration Companies that represents smaller miners called for a bipartisan approach that limited the 2030 reduction target to between 26% to 28% and included the controversial Kyoto carryover credits, effectively opposing the climate policy Labor took to the May federal election.
Woodside, however, acknowledged that the level of Australia's emissions reduction “remains contested within the political debate” and “this contest is expected to continue for the foreseeable future”.
Woodside stood to be most affected by the March guidelines as it plans to sanction its Browse and Scarborough LNG projects next year. It said the EPA should not duplicate the federal government’s efforts to control industrial emissions through the safeguard mechanism and emissions reduction fund.
The Chamber of Commerce and Industry of WA acknowledged that the safeguard mechanism was not intended to drive down emissions.
This leaves the emissions reduction fund, now renamed the climate solutions fund with A$200 million a year for 10 years to purchase offsets, as the principal mechanism to reduce Australia’s industrial emissions to 2030.
Origin, that has limited operations in WA, made a pitch for selling offsets to the industrial sector.
“The electricity sector can do more than its pro-rata share of the target as it has cost-effective abatement options available to it which could be unlocked given the right policy settings,” it said.
Stick to local issues
Pointing to the federal government’s efforts was a common theme of industry submissions
The Business Council of Australia said it favoured a consistent national approach and the EPA’s March guidelines targeted a minority of large emitters in one state that needed environmental approvals.
Alinta Energy politely said “the EPA produces high-quality regulatory outcomes when its focus is firmly on the local”.
A Canberra-led approach was also supported by the Australian Petroleum Production and Exploration Association instead of “duplicative and inconsistent requirements...imposed through the actions of a single regulatory agency”.
“The major challenge to the industry’s continued growth is maintaining WA’s international competitiveness in the face of growing global competition,” APPEA said.
“A relatively high-cost local environment, growing policy and regulatory challenges and the emergence of new LNG competitors increases the level of competition WA faces, as it seeks to win market share and attract investment.”
APPEA, along with others including Shell, FMG and Chevron, wants the EPA to coordinate its revised guidelines with the WA government proposed State Climate Change Policy planned for release in 2020.
The EPA plans to publish its new greenhouse guideline early in 2020 and Australian Energy Daily understands a draft will be released in about one month
BHP, that has its most valuable operations - the Pilbara iron ore mines - in WA, did not directly reject the EPA’s approach in March. It called for the interaction of state and federal policy to be fully assessed and implemented in a way that avoided an “uneven playing field”.
In contrast, fellow Pilbara iron or miner Rio Tinto said it did not support the approach of the original EPA guidelines and the regulation of scope 3 emissions should be left to the country they occur in.
Rio Tinto said in some circumstances it would be appropriate for the EPA to consider scope 2 emissions. These are the emissions related to power purchased by a project.
Consideration of scope 3 emission was explicitly rejected by others, including BP, the BCA and the Chamber of Minerals and Energy of WA.
A tough approach by the EPA was supported by many environmental groups, including the Conservation Council of WA.
“Carbon pollution from WA LNG projects cancels out the entire savings achieved by all renewable energy capacity installed under the Renewable Energy target across the nation so far,” the CCWA said.
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