New South Wales’ dials emissions reduction scrutiny up to 11

If you think the Federal Government’s plan to hold Australia’s 215 largest industrial emitters to account under its Safeguard Mechanism is ambitious, the New South Wales state government will like you to hold its beer.

The state’s Environment Protection Agency has released its “Climate Change Policy and Action Plan 2023-26” which outlines a range of measures aimed at helping it reach net zero emissions by 2050.

So what makes the NSW plan far more ambitious in its scope compared to its Federal counterpart? How about hard carbon limits on 50,000 companies in the transport, mining, manufacturing and electricity generation sectors as a condition for their operating licences?

NSW EPA chief executive officer Tony Chappel said the plan represented a comprehensive approach around emissions reduction pathways for the first time in Australia and will treat greenhouse gas emissions like any other pollutant that the agency regulates.

To achieve its objectives, the plan will offer a collaborative, staged and systematic approach to ensure actions are evidence-based and government programs are joined-up.

It will also allow affected industries sufficient time to adjust to any sector-based emission reduction targets and enforceable licence limits.

The EPA will also work with other states to ensure that companies don’t shift jurisdictions just to avoid the carbon regulations.

NSW’s electricity generators – who are still dependant on coal for a significant portion of their generation capacity – are expected to draw the greatest attention in this drive to decarbonise the state.

It will also examine the transport sector, with Chappel telling the AFR that it would look to encourage the move towards electrification or alternative fuels.

Plan details

Under the staged approach, the NSW EPA will gather information from environment protection licensees – including the proactive work of industry leaders – to understand what they are already doing to reduce greenhouse gas emissions and adapt to climate change impacts.

It will then progressively set feasible, evidence-based emission reduction targets for key industry sectors and provide guidance as to how these targets can be attained.

Next will be requiring industry to prepare and implement climate change mitigation and adaptation plans which will complement the state’s policies and programs that support adaptation and transition to a decarbonised economy.

It will then move to progressively place other requirements on licences in consultation with industry with the agency noting that different requirements may be imposed on new and existing licensees.

One key area in the EPA’s new plan is requiring zero emissions from new electricity infrastructure – a move designed explicitly to transition the state’s electricity generation capacity to renewables.

It is also looking to achieve net zero emissions from organic waste from landfills by 2030, ensure methane emissions from EPA-licensed onshore gas operators are minimised by reviewing existing leak detection and repair programs, and regulate short-lived pollutants from licensees.

Ambitious emissions reduction plan

The plan is unlikely to win the EPA many fans from the impacted sectors. Expect to see grousing from small business owners and industry bodies promising to work with the EPA.

Conversely, climate groups welcomed the plan with the ABC quoting Climate Council chief executive Amanda McKenzie as saying that it would turn “government targets for cutting emissions into tangible actions with teeth”.

Vets for Climate Action also welcomed the plan and expressed hopes that environmental regulators in other states would follow NSW in addressing greenhouse gas emissions.

Is the plan ambitious? Certainly. Is it achievable? That might be a stretch though it can’t be ruled out that the EPA might actually have first dibs on the resources it needs.

However, there is a strong case to be made for setting high standards and not quite meeting them as the attempt to get as close as possible might actually be enough to get you across the line for a more modest but still acceptable target.