The Climate Change Act 2010 (Vic) (the Act) commenced in full on 1 July 2011. However, the continued uncertainty regarding the implementation of the Act and other climate policy in Victoria demonstrates the complexities of this area and the need for greater certainty and leadership at a Federal level.

Key features of the Act

Greenhouse gas emissions target

The Act requires the Minister for Environment and Climate Change to 'ensure' a 20% reduction in Victoria's greenhouse gas emissions (against its emissions for the year 2000) by 2020. In the second reading speech, the now former Minister for Environment and Climate Change, Gavin Jennings stated that the target would be achieved through 'energy efficiency, increased use of solar, wind and other renewable energy sources, increased gas and a significant reduction in brown coal generation, improved agricultural practices and carbon sequestration.'.  The Act also requires the Minister to report on the progress made towards the target in the Minister's biennial report on climate change and emissions data.

Regulation of greenhouse gases

The Act amends the Environment Protection Act 1970 (Vic) (EP Act) to:

  • insert a definition of the term 'greenhouse gas substance'
  • amend the definition of 'waste' to include 'any greenhouse gas substance emitted or discharged into the environment'
  • provide the Victorian Environment Protection Authority (EPA) with the power to regulate the emission and discharge of greenhouse gas substances
  • make regulations relating to greenhouse gas substances, including prescribing standards for their emission or discharge into the environment, such as emission intensity standards and maximum levels of emissions of greenhouse gas substances.

In the second reading speech, the former Minister stated that it was intended that the EPA would use these powers to set an emissions intensity standard for new power stations. In addition, the Minister also stated that the amendments would allow regulations to be introduced to set a greenhouse gas 'trigger' to require licensing and works approvals for general industrial and commercial sites that are large emitters and energy users. Neither of these proposed amendments is specifically provided for in the Act, and neither has been undertaken by the EPA to date.

Decision-making framework

The Act creates a framework that requires persons making particular decisions under six pieces of legislation to have regard to:

  • the potential impacts of climate change relevant to the decision
  • the potential contribution to Victoria's greenhouse gas emissions of the decision.

Decisions that the framework applies to include works approvals and licensing of scheduled premises under the EP Act, coastal strategies and coastal action plans under the Coastal Management Act 1995 (Vic), municipal and state public health and wellbeing plans under the Public Health and Wellbeing Act 2008 (Vic) and sustainable water strategies under the Water Act 1989 (Vic). However, it is noteworthy that a number of Acts containing decisions that are potentially relevant to climate change are not included in this list, including the Planning and Environment Act 1987 (Vic) and the Mineral Resources (Sustainable Development) Act 1990 (Vic).

Although decision-makers are required to have to 'have regard to' climate change when making a decision under the framework, they are not required to take any specific action or make a decision in a certain way. This provides necessary flexibility, allowing decision makers to balance all considerations relevant to a particular decision. The extent to which the requirements imposed by this framework are enforceable and/or reviewable is not clear.

The Act also amends the transport system objectives that transport bodies must have regard to under the Transport Integration Act 2010 (Vic) to require consideration of reducing transport-related greenhouse gas emissions and preparing for and adapting to climate change in the context of transport. 

Adaptation plans

The Act requires the Minister to prepare a Climate Change Adaptation Plan before 31 December 2012 that sets out:

  • an outline and risk assessment of the potential impacts of climate change on Victoria
  • a statement of the Government's state-wide priorities and 'strategic responses' for adaption.

New forestry and carbon rights regime

The Act repeals the existing Forestry Rights Act 1996 (Vic) and replaces it with a new statutory framework for forestry and carbon rights on both private land and crown land. The key purposes of these amendments are to align the Victorian legal framework relating to forest and carbon property rights with national approaches, and to facilitate Victorian participation in forestry and carbon markets. The key part of this new regime is the creation of an interest in land known as a forest carbon right. Forest carbon rights are comprised of forestry rights, carbon sequestration rights (relating to carbon in trees) and soil carbon rights.  This is the first time the soil carbon rights have been established in Victoria.

Next steps - litigation and climate policy

On 20 May 2011, the EPA issued a works approval in relation to Dual Gas Pty Ltd's proposed new power station development at Morwell in Victoria's La Trobe Valley.  The works approval is for the construction of an integrated drying, gasification combined cycled power station, which proposes to generate electricity using 'syngas' (derived from brown coal) and natural gas, with a maximum 'sent out' electricity generating capacity of 300MW. One of the conditions of the works approval is that the plant 'must be designed in a manner that enables it to comply with an operational Greenhouse Gas Emissions Intensity requirement of 0.8tCO2-e/MWh to the satisfaction of the EPA'.

On 10 June 2011, Environment Victoria and Locals Into Victoria's Environment Inc lodged an application in the Victorian Civil and Administrative Tribunal (VCAT) under section 33B of the EP Act seeking review of the EPA's decision to issue the works approval.  The statement of grounds for the application states that the use of the works will result in the emission of waste, being carbon dioxide or carbon dioxide equivalent gases, to the environment inconsistent with the State Environment Protection Policy (Air Quality Management) (SEPP AQM). In particular, it provides that the level of emissions resulting from the construction and operation of the power plant as a result of the works approval would be inconsistent with:

  • the SEPP AQM's policy aim of supporting Victorian and national measures to address the enhanced greenhouse gas effect
  • the SEPP AQM's requirement that emitters must apply best practice in the management of emissions.

In addition, Dual Gas Pty Ltd had applied for the works approval on the basis of a 600MW generating capacity power plant, which the EPA declined to approve, approving a 300MW plant instead. As a consequence, in addition to the third party reviews, Dual Gas Pty Ltd has appealed to VCAT with two reviews challenging the EPA's decision: one challenging the limiting conditions in the works approval, the other asserting that the approval of a 300MW power plant is not responsive to the application for a 600MW power plant.

Although none of the statements of grounds specifically reference the Act, the matters to which they relate are directly relevant to the subject matter of the Act and its policy context. In any case, such an application demonstrates how that Act may be used in future litigation.

In addition, the EPA's imposition of an emissions standard of 0.8tCO2/MWh when assessing applications in the absence of any current subordinate legislation requiring it to do so indicates that further measures and regulation to provide further detail in this space are likely.

The Climate Change Act 2010 (Vic) (the Act) commenced in full on 1 July 2011. However, the continued uncertainty regarding the implementation of the Act and other climate policy in Victoria demonstrates the complexities of this area and the need for greater certainty and leadership at a Federal level.

Key features of the Act

Greenhouse gas emissions target

The Act requires the Minister for Environment and Climate Change to 'ensure' a 20% reduction in Victoria's greenhouse gas emissions (against its emissions for the year 2000) by 2020. In the second reading speech, the now former Minister for Environment and Climate Change, Gavin Jennings stated that the target would be achieved through 'energy efficiency, increased use of solar, wind and other renewable energy sources, increased gas and a significant reduction in brown coal generation, improved agricultural practices and carbon sequestration.'.  The Act also requires the Minister to report on the progress made towards the target in the Minister's biennial report on climate change and emissions data.

Regulation of greenhouse gases

The Act amends the Environment Protection Act 1970 (Vic) (EP Act) to:

  • insert a definition of the term 'greenhouse gas substance'
  • amend the definition of 'waste' to include 'any greenhouse gas substance emitted or discharged into the environment'
  • provide the Victorian Environment Protection Authority (EPA) with the power to regulate the emission and discharge of greenhouse gas substances
  • make regulations relating to greenhouse gas substances, including prescribing standards for their emission or discharge into the environment, such as emission intensity standards and maximum levels of emissions of greenhouse gas substances.

In the second reading speech, the former Minister stated that it was intended that the EPA would use these powers to set an emissions intensity standard for new power stations. In addition, the Minister also stated that the amendments would allow regulations to be introduced to set a greenhouse gas 'trigger' to require licensing and works approvals for general industrial and commercial sites that are large emitters and energy users. Neither of these proposed amendments is specifically provided for in the Act, and neither has been undertaken by the EPA to date.

Decision-making framework

The Act creates a framework that requires persons making particular decisions under six pieces of legislation to have regard to:

  • the potential impacts of climate change relevant to the decision
  • the potential contribution to Victoria's greenhouse gas emissions of the decision.

Decisions that the framework applies to include works approvals and licensing of scheduled premises under the EP Act, coastal strategies and coastal action plans under the Coastal Management Act 1995 (Vic), municipal and state public health and wellbeing plans under the Public Health and Wellbeing Act 2008 (Vic) and sustainable water strategies under the Water Act 1989 (Vic). However, it is noteworthy that a number of Acts containing decisions that are potentially relevant to climate change are not included in this list, including the Planning and Environment Act 1987 (Vic) and the Mineral Resources (Sustainable Development) Act 1990 (Vic).

Although decision-makers are required to have to 'have regard to' climate change when making a decision under the framework, they are not required to take any specific action or make a decision in a certain way. This provides necessary flexibility, allowing decision makers to balance all considerations relevant to a particular decision. The extent to which the requirements imposed by this framework are enforceable and/or reviewable is not clear.

The Act also amends the transport system objectives that transport bodies must have regard to under the Transport Integration Act 2010 (Vic) to require consideration of reducing transport-related greenhouse gas emissions and preparing for and adapting to climate change in the context of transport. 

Adaptation plans

The Act requires the Minister to prepare a Climate Change Adaptation Plan before 31 December 2012 that sets out:

  • an outline and risk assessment of the potential impacts of climate change on Victoria
  • a statement of the Government's state-wide priorities and 'strategic responses' for adaption.

New forestry and carbon rights regime

The Act repeals the existing Forestry Rights Act 1996 (Vic) and replaces it with a new statutory framework for forestry and carbon rights on both private land and crown land. The key purposes of these amendments are to align the Victorian legal framework relating to forest and carbon property rights with national approaches, and to facilitate Victorian participation in forestry and carbon markets. The key part of this new regime is the creation of an interest in land known as a forest carbon right. Forest carbon rights are comprised of forestry rights, carbon sequestration rights (relating to carbon in trees) and soil carbon rights.  This is the first time the soil carbon rights have been established in Victoria.

Next steps - litigation and climate policy

On 20 May 2011, the EPA issued a works approval in relation to Dual Gas Pty Ltd's proposed new power station development at Morwell in Victoria's La Trobe Valley.  The works approval is for the construction of an integrated drying, gasification combined cycled power station, which proposes to generate electricity using 'syngas' (derived from brown coal) and natural gas, with a maximum 'sent out' electricity generating capacity of 300MW. One of the conditions of the works approval is that the plant 'must be designed in a manner that enables it to comply with an operational Greenhouse Gas Emissions Intensity requirement of 0.8tCO2-e/MWh to the satisfaction of the EPA'.

On 10 June 2011, Environment Victoria and Locals Into Victoria's Environment Inc lodged an application in the Victorian Civil and Administrative Tribunal (VCAT) under section 33B of the EP Act seeking review of the EPA's decision to issue the works approval.  The statement of grounds for the application states that the use of the works will result in the emission of waste, being carbon dioxide or carbon dioxide equivalent gases, to the environment inconsistent with the State Environment Protection Policy (Air Quality Management) (SEPP AQM). In particular, it provides that the level of emissions resulting from the construction and operation of the power plant as a result of the works approval would be inconsistent with:

  • the SEPP AQM's policy aim of supporting Victorian and national measures to address the enhanced greenhouse gas effect
  • the SEPP AQM's requirement that emitters must apply best practice in the management of emissions.

In addition, Dual Gas Pty Ltd had applied for the works approval on the basis of a 600MW generating capacity power plant, which the EPA declined to approve, approving a 300MW plant instead. As a consequence, in addition to the third party reviews, Dual Gas Pty Ltd has appealed to VCAT with two reviews challenging the EPA's decision: one challenging the limiting conditions in the works approval, the other asserting that the approval of a 300MW power plant is not responsive to the application for a 600MW power plant.

Although none of the statements of grounds specifically reference the Act, the matters to which they relate are directly relevant to the subject matter of the Act and its policy context. In any case, such an application demonstrates how that Act may be used in future litigation.

In addition, the EPA's imposition of an emissions standard of 0.8tCO2/MWh when assessing applications in the absence of any current subordinate legislation requiring it to do so indicates that further measures and regulation to provide further detail in this space are likely.

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