05 September 2019

New Scope For Conditional Approval Of Mining Projects? NSW Independent Planning Commission Steps in to the Climate Change Policy Role.

This article was written by Debra Townsend, Ruth Dawes and Philippa Meikle.

Wambo Coal Mine has been approved by the IPC on the condition of preparing an Export Management Plan intended to minimise the Scope 3 GHGEs produced by the Project.

A determination on the United Wambo Open Cut Coal Mine Project (SSD 7142) and associated modifications (DA 305-7-2003 MOD 16 and DA 177-8-2004 MOD 3) was made by the NSW Independent Planning Commission (IPC), as the Consent Authority, on 29 August 2019.

In this application, Glencore Coal Pty Ltd and Wambo Coal Pty Limited, a subsidiary of Peabody Energy Australia Limited, sought to expand mining operations through a joint venture project combining the Wambo Coal Mine and the United Coal Mine. The prior existing approval was for the extraction of up to 14.7 million tonnes run-of-mine (ROM) coal a year, and the current application was for an additional 150 million tonnes over a 23-year period.

The IPC determined to conditionally approve the state significant development and associated applications. The IPC determined that Scope 1 and 2 Greenhouse Gas Emissions (GHGEs) would be minimised as far as practicable by the steps proposed to be taken by the joint venture, but imposed a novel condition in relation to Scope 3 GHGEs. Scope 3 emissions are indirect greenhouse gas emissions other than Scope 2 emissions that are generated in the wider economy, such as transportation, purchase and use of the coal produced by the mine.[1] For coal mines, Scope 3 emissions represent the majority of the predicted GHGEs for the operational phase.

The IPC’s condition requires an Export Management Plan to be prepared to the satisfaction of the Planning Secretary, with the purpose of minimising Scope 3 GHGEs. The Plan must set out protocols that require the Applicant to use its ‘best endeavours’ to ensure that extracted coal is only exported to countries which are parties to the Paris Agreement within the United Nations Framework

Convention on Climate Change (Paris Agreement), or countries which have equivalent policies for reducing greenhouse gas emissions.

Prior to the determination, the IPC had published a statement outlining its intention of imposing a condition upon the determination, inviting submissions from the parties and the wider public. The IPC amended its draft condition in response to some concerns raised, including that the plan can be amended should the obligations under the Paris Agreement change, and that the plan can be superseded where applicable state or federal legislative requirements affect the trade of coal in a way that would provide for the management of the Scope 3 GHGEs.

Significantly, this represents the first determination where a potentially onerous condition has been imposed for the expansion of a mine, and would make Wambo the “only coal mine with this condition of consent”.[2] However, the IPC noted that as the majority of Scope 3 GHGEs are predicted to be generated following export to countries that are parties to the Paris Agreement, it therefore would not represent an onerous condition for this application.

The IPC’s decision is an extraordinary step intended to address climate impacts from the burning of coal, made in the absence of any clear policy position by the NSW Government other than a broad endorsement of the Paris Agreement. Whether the NSW Government thought the IPC would step in to effectively make its own policy on such an important matter when it established that body must be open to doubt. Whether it is appropriate for a body such as the IPC to have the ability to determine policy in this manner is also something about which the various interested parties and commentators will probably have vastly differing views.

You can view the full reasons for the determination here.

[1] Australian Government Clean Energy Regulator, ‘Greenhouse gases and energy’, Scope 3 emissions (Webpage, 20 July 2018) <www.cleanenergyregulator.gov.au>.

[2] Independent Planning Committee, New South Wales Government, ‘Statements of reasons for decision’ (29 August 2019), [306].

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