Australia’s GHG reduction targets and Paris agreement commitments to be taken into account in (some) commonwealth decision making

In June 2022 Australian government lodged an updated Nationally Determined Contribution (NDC) with the United Nations Framework Convention on Climate Change (UNFCCC) secretariat in relation to Australia’s obligations pursuant to Article 4 of the Paris Agreement, committing Australia to net zero GHG emission by 2050 and 43% below 2005 levels by 2030. The Climate Change Bill to implement these commitments was introduced into Federal Parliament on 27 July 2022, passed Parliament with Senate amendments on 8 September and was assented 13 September 2022. [1]

The Climate Change Act 2022 (Cth) commenced on 14 September 2022 and introduces Australia’s revised greenhouse gas emissions reductions targets under the Paris Agreement into domestic law. The Act also requires -

• The Minister to prepare an annual climate change statement;
• The Climate Change Authority to give the Minister advice that relates to the preparation of an annual climate change statement;
• The Climate Change Authority to advise the Minister on greenhouse gas emissions reductions targets to be included in a new or adjusted nationally determined contributions; and
• Periodic reviews of the operation of the Act.

The Climate Change (Consequential Amendments) Act 2022 (Cth) also commenced on 14 September 2022 and introduces amendments to include references to Australia’s greenhouse gas emissions reduction targets and/or to the Paris Agreement in the following legislation –

The amendments introduce definitions of Australia’s greenhouse gas emissions targets into all the above legislation and depending on the Act also introduce the requirement to consider those emissions targets in relevant decision making and the exercise of powers.

In the second reading speech for the Climate Change (Consequential Amendments) Bill, Minister for Climate Change and Energy, Chris Bowen MP stated:

The Climate Change (Consequential Amendments) Bill 2022 complements the Climate Change Bill by embedding consideration of Australia's greenhouse gas emissions reduction targets into the objects and functions of the Commonwealth entities and schemes that could make the greatest contribution to reducing emissions for Australia.

These entities include the Clean Energy Finance Corporation, which facilitates flows of finance into the clean energy sector; the Australian Renewable Energy Agency, known as ARENA, which encourages the uptake of renewables by providing financial assistance and investment in renewable energy technologies; and the CSIRO, undertaking invaluable research underpinning emissions reduction efforts and clean energy technologies.[2]

Not mentioned in the second reading speech, but the Bill (now Act) also embeds consideration of Australia's greenhouse gas emissions reduction targets into the objects and functions of the Climate Change & Energy Minister when making decision on declared areas in Commonwealth waters under the Offshore Electricity Infrastructure Act 2021 (Cth), for example to allow the development of Australia’s offshore renewables industry.

Amendments to the Offshore Electricity Infrastructure Act 2021 (Cth) (OEI Act)

The OEI Act commenced on 2 June 2022 and established a regulatory framework to enable offshore electricity infrastructure in the Commonwealth offshore area. Broadly, the OEI Act provides for licence holders to undertake offshore infrastructure activities, empowers the Minister to declare a specified area suitable for offshore infrastructure, and implements a licensing scheme to allow offshore infrastructure activities. Developments in the Ministerial declaration process since the commencement of the OEI Act are discussed in our latest offshore wind insight.[3]

The amendments to the OEI Act by the Climate Change (Consequential Amendments) Act 2022 (Cth) require the Minister to specifically consider Australia’s greenhouse gas emissions reduction targets when making decisions under the OEI Act about whether to make a declaration that an area is suitable for offshore renewable energy infrastructure.

It adds Australia’s greenhouse gas emissions reduction targets to the list of considerations that the Minister needs to take into account when making, varying or revoking a suitability declaration under the OEI Act [4], in addition to the existing criteria being –

• the potential impacts of the construction, installation, commissioning, operation maintenance or decommissioning of offshore renewable energy infrastructure in the area on other marine users and interests;
• any submissions received in accordance with the notice under section 18;
• any advice received as a result of the consultation mentioned in paragraph 17(3)(c);
• Australia’s international obligations in relation to the area.

The approval of offshore wind declared areas under the OEI Act to kick start the offshore wind industry will add to Australia renewable energy sources, assisting Australia to meet its emissions reduction targets. The proposed Gippsland declared area remains open for public submissions until 7 October. See link for more information here.