Senate Economics Legislation Committee [Part 2], , 2:06:18 to 2:17:05
An examination of Section 527E of the EPBC Act regarding indirect impacts and how NOPSEMA considers scope 3 emissions within the causal chain of environmental impact assessments.
Topics: EPBC Act, Emissions reduction, Climate change
Speakers: Cameron Grebe, Senator Susan McDonald, Unknown Speaker, Sue McCarrey
not in the organization in 2022. I was obviously aware, but Mr. Grebe will be able to answer that question.
>> Thank you, Senator. I was in the organization. We did not make any
>> Before the new statement was issued, did not seem advise minister or department about the likely regulatory or legal consequences of removing the limitation
>> of removing limitation from the statement of reasons. Sorry, from the statement of expectations. Senator, we certainly discussed the topic with the department uh and uh in the context of the laws that apply through the EPBC act and the OPGS environment regulations were discussed but not specifically I think your question as to whether we raised the issue that there could be legal issues because of the removal
>> or or regulatory regulatory or legal consequences of removing the limitation.
Sen, I think I'd say we we advised that the the we we would continue as we had before that time uh to assess to make assessments under the environment regulations and according to the law according to the laws that are in place and consider on a case- by case basis and the approach that Ms. McCary's outlined already um that there's a consideration of greenhouse gas emissions when it's relevant to that assessment under the laws in place at the time and what's in the statement of expectations um isn't affecting that
Right. So you move to an to remove that limitation um that that was removed on NFCAM's statement of expectations uh very early on in the term of the new government before there was legal requirement in Australia to be reporting
requirement arises from the environmental protection biodiversity conservation act um which NOPS operates under under the endorsed program through the strategic assessment provisions and in under that program there's a part of both the EPBC act section 527E which is a definition of impacts that was in place prior to the statement of expectations being changed and continues afterwards and is still there now and that identifies and defines the definition of environmental impact. uh there's a policy statement that accompanies that. Both of those apply to NOPSMA under the legal framework we operate to that drives the consideration on a case- by case basis for greenhouse gas emissions through the indirect consequences uh on the impacts to the Australian environment.
>> But scope 3 emissions are not the Australian environment. They're end
users. Greenhouse gas emissions of any scope where they're considered indirect uh where they're considered impacts as defined under the definition under section 527E. Scope 3 missions for example can be indirect consequences of a of a of an activity under assessment by us. And therefore when they meet the definition under the EPBC act but has to meet that definition they considered impacts. That section of the EPBC act doesn't identify what types of impacts whether it be um emissions to water or air. There's simply a definition that's established under the EPBCA that brings in indirect impacts. Um, not all indirect consequences are always impacts. It's it's a complex provision. I'm not going to read it out. I'll get it wrong. Um, but it but it sets up the decision- making around whether indirect consequences should be considered impacts. Um, and we operate under those laws. So, we have to have regard to that when we make decisions. And that's been in place on the EPBC since not been
Was the advice when you discussed this with the department on the potential regulatory and legal uh consequences was that advice written advice?
>> I can't recall, Senator. I have to take that on notice.
>> Okay. If you take that on notice and what date? Um, has NOPSA identified any staffing or expertise constraints that affect its ability to undertake the assessments
>> of greenhouse gas emissions? >> No. Uh, identify limitations. Senator, when we scope an assessment, we identify the skills and expertise needed and um assemble a team as Miss McCary outlined that's um appropriately skilled and qualified to do that. As part of that we do sometimes identify the need as I mentioned earlier to um seek advice from um other parties um other parts of government and we do do that on this subject for example I mentioned the clean energy regulator uh and um other parts of the department of climate change energy environment and water um so we don't that's partly because we don't have the full expertise to understand for example international framework agreements or how they operate um and they do change from time to time so we seek advice on those aspects um among other things they're not our um so I guess the selection is mostly based around where there is another part of government who actually has a function in relation to a matter that's relevant to the assessment of the environmental impact and the topic we're talking about here obviously greenhouse gas emissions there are other comworth agencies who have a role to play in that space and we seek their advice to support our assessments
>> so the staffing and expertise constraints that I was asking about that's not a permanent constraint that's a case-byase basis Correct. We have
sufficient resources to carry out the assessments in a timely manner and that goes for any subject. I I think that question you were asking earlier was going towards may the time frames be driven by not us not having the people and there's no instance where we um take longer in assessment due to resource constraints of any kind.
>> So turning back to uh section 527E uh when does the case by case sorry what does the case byase analysis look like? What criteria deems a project or environment plan necessary for undergoing a scope three assessment?
>> Gonna make me read out the provision. So the the um the definition of impact um under section 527E of the EPBC act and the policy where they're relevant um it it [laughter] it um I've lost the section now to read you out. I I can take on notice and share the with the senator senator the specific wording but it's where there's there's a sufficient causal link um that the consequences are foreseeable that within the contemplation the proponent they're the substantial cause and they're facilitated to the great major extent. Um it's written in a far more complex manner in the in the act but those types of factors are in consideration as to whether it's considered an impact. We don't make assessments of matters that aren't within the scope of our jurisdiction and our jurisdiction is environmental impacts, not indirect consequences that that are that are disconnected from the activity sufficiently. Um, and so that is definitely a part of the assessment. I think the thing I point out first and foremost is that the obligation is on under our regulations is on the the title holder or the proponent in the case of an OP to undertake that initial assessment as to whether to what the scope of the impacts actually are having regard to to the EPBC policy statement and section 527E and then where they determine that there is sufficient grounds to include as an impact they are required to carry out that environmental impact assessment of those emissions through climate change in impacts to the Australian environment. And I stress the last part because it's not an assessment of the scope 3 missions. I think that's been mentioned a couple of times. We're not assessing scope 3. We are assessing environmental impacts. Scope 3 emissions and greenhouse gas emissions are part of the causal chain between petroleum activity and impacts to the environment.
>> Oh, perhaps this is my misunderstanding, but I thought scope three was the users emissions. It is >> which given the amount of gas that we export would mean they were offshore emissions >> and I thought the provision talked about Australian impacts.
>> Correct. So the scope three the emissions cause whether they're um say for example an offshore um LG LG project which has production from offshore u scope one is at that facility that we regulate. Scope three is onshore um use, transport emissions and then induce consumption. I
>> think you meant to say scope two then scope three.
>> No, scope two is um emissions generated through purchased electricity. >> It's confusing, you know. Um we didn't that way. Um and but but um uh but you're right anyway, Senator. There's directly generated from the thing we're regulating. There are indirect consequences. Um but in environmental impact assessment context it's the actual impacts to the natural environment that you need to connect to. So it's not about a quantum of scope three that suddenly is acceptable unacceptable. It's the implications in the context of global climate change and the effects on the environment. It's why it's a complex assessment because obviously those projects are not the
>> So uh that's So when you assess scope three emissions >> and and then scope three incurred offshore are being captured in that assessment and then you're putting that into what does this mean for the world uh missions and that's effect on climate change and then what that will mean for Australian the Australian environment.
Yes, correct, Senator. As I just to clarify though, just for the record, that first task is of the company. So, they're required to do that analysis. We then evaluate that to see whether it's uh robust to is adopting the appropriate um emissions estimating methodologies and and and um the analysis of the impacts through climate change, the environment. I just clarify here as well, this is we're not this is not a NOPSA decision. I'd refer to the EPBC act. It's obviously relevant in a similar um vein to assessment of activities or actions under the EPBC act. It's case by case. Um and there is probably, as you be aware, a lot of case law that's driven how the treatment of greenhouse gas emissions and indirect consequences um in the context of environmental impact assessment >> under the EPBC act.
>> My mind is quietly exploding.
it's not surprising. It's complicated.
>> Well, it's not just complicated. Um, so prior to June 2022, you were expressly prohibited from assessing scope 3 impacts because you're limited to scope one and scope two. Is