Energy, resources and environment update - May 2023

The ACCC recently conducted an internet sweep to identify misleading environmental and sustainability marketing claims. The internet sweep reviewed 247 businesses and identified 57 per cent as having made concerning claims about their environmental credentials. Following this, the ACCC has announced that it will be investigating several businesses for potential ‘greenwashing’. The cosmetic, clothing and footwear, and food and drink sectors were found to have the highest proportion of concerning claims among the industries targeted in the operation.

ACCC Deputy Chair Catriona Lowe said: “Businesses using broad claims like ‘environmentally friendly’, ‘green’, or ‘sustainable’ are obliged to back up these claims through reliable scientific reports, transparent supply chain information, reputable third-party certification or other forms of evidence.”

Further information on the ACCC greenwashing sweep and ACCC media release can be found here.

Consultation has now closed in respect of the federal Nature Repair Market Bill (Nature Repair Bill). The Nature Repair Bill proposes to establish a framework to issue Australian landholders with tradeable biodiversity certificates for projects that protect, manage and restore nature.

The market is designed to operate in parallel with carbon markets and will be regulated by the Clean Energy Regulator.

The Nature Repair Bill will go towards the Australian Government’s commitment to protect 30 per cent of Australia’s land and seas by 2030. The same goals have been adopted globally under the United Nations Convention on Biological Diversity.

Further consultation will occur in 2023 to discuss the rules and methods for developing the market and how participation will occur. A fact sheet which provides an overview of the Nature Repair Market Bill can be found here.

The Safeguard Mechanism has been amended with the passing on 30 March 2023 of the Safeguard Mechanism (Crediting) Amendment Act 2023 (Act). The Safeguard Mechanism now provides a framework that limits the net emission of around 215 large industrial facilities with over 100,000 tonnes carbon dioxide equivalent each year.

The amendments include:

• provisions for credits, known as Safeguard Mechanism Credits, to be issued to facilities whose emissions are below baseline levels. These credits each represent a tonne of emissions and can be traded. This means that facilities with emissions below baseline levels will retain an incentive to reduce their emissions;
• limiting the total emissions of covered facilities and a “hard cap” on overall emissions to not exceed 1,233 million tonnes of carbon dioxide equivalence through to 30 June 2030;
• introduction of “five year rolling averages” when determining emissions caps;
• gross emissions to not exceed the current level of 140 million tonnes per annum, with this annual cap to reduce down to 100 tonnes by 2030.

The are far reaching and more extensive than the above snapshot., so please get in touch with us if you would like to find out more and how these changes may affect your business.

On 30 March 2023 the Hon Madeline King MP announced new reforms to the Australian Domestic Gas Security Mechanism (ADGSM). The ADGSM reforms allow for more flexibility in responding to domestic gas supply shortfalls. Under the reforms:

• the decision to activate the ADGSM can be made quarterly, ahead of peak seasonal demand periods;
• new protections are in place for the long-term gas contracts that underpin investments in Australia’s gas industry; and
• liquefied natural gas exporters will share equal responsibility for preventing shortfalls.

The reforms follow consultations with industry, stakeholders, export partners and the public, and aim to improve the design and operational effectiveness of the ADGSM. Further information can be found here.

Australian Energy Market Operator (AEMO) gas adequacy report forecasts that gas production will meet customer demand until 2027 in central and eastern Australia. However, supply risks remain in the southern states. AEMO CEO Daniel Westerman said the short-term gas shortfall risks and long-term supply gaps, due to declining production in southern Australia, continue from the 2022 Gas Statement of Opportunities Report. “To minimise shortfall risks, committed infrastructure and supply projects must be completed on time, while demand-side solutions, additional gas storage and pipeline development, and liquified natural gas import terminals could potentially play a role,” Mr Westerman said. The full AEMO media release can be found here.

On 4 April 2023, Australian Renewable Energy Agency (ARENA) announced $120 million in funding is available for Round 1 of the Community Batteries Funding Program (Program). The Program aims to support the deployment of community batteries across Australia to lower energy bills, cut emissions and reduce pressure on the electricity grid. ARENA is now seeking applications for up to $20 million funding to deploy a minimum of five community batteries. Further information on the Program can be found here.

The South Australian Chamber of Mines and Energy (SACOME) latest economic contribution analysis identified that 15 local resource companies contributed over $10.7 billion in direct and indirect spending to the South Australian economy in 2021-22. SACOME states this contribution is equivalent to 8.3% of South Australia’s Gross State Product (GSP), within $1 in every $12 generated by the sector. The 2021-22 data represents an 81% uplift from the last economic analysis conducted in 2019-20, which recorded $5.9 billion in direct and indirect spending and 5.3% GSP. Further information on SACOME’s analysis can be found here.

This article provides general commentary only. It is not legal advice. Before acting on the basis of any material contained in this article, seek professional advice.

Co-authors

Name: Mario Pegoli,

Position: Associate and Corporate Adviser

Practice: Corporate

Name: Stephanie Maurangi

Position: Lawyer

Practice: Transactions

Name: Yasmin McBride-Hellewell

Position: Law Clerk

Practice: Transactions

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