The New South Wales Environment Protection Authority (NSW EPA) has released the three documents (Consultation Paper) which are open for public comment until 7 October 2025:
These signal the introduction of prescriptive climate change mitigation requirements proposed to be written in as conditions of Environment Protection Licences (EPLs) held by high emitting facilities.
Proponents of licensed activities in NSW should consider whether they are likely to be captured by the proposed mitigation requirements and if so, start developing their strategies for compliance.
The Consultation Papers propose that proponents will be captured if they are undertaking an activity or operating a premises that requires an EPL and which emit over 25,000 tonnes per year of CO2-e of scope 1 and scope 2 emissions. Additional requirements would also apply to facilities captured by the Safeguard Mechanism and coal mines.
The Consultation Papers are seen as a significant step in the NSW Government’s broader climate change mitigation strategy, including its legislated emissions reduction targets. Relevantly, the Climate Change (Net Zero Future) Act 2023 (NSW) legislates targets to reduce net GHG emissions in NSW:
by at least 50% from the net greenhouse gas emissions in 2005 by 2030
by at least 70% from the net greenhouse gas emissions in 2005 by 2035
to zero by 2050.
With latest emissions projections showing that NSW is not on track to meet the State’s legislated 2030 and 2035 emissions reduction targets, this is important in the race to net zero. NSW is expected to deliver 44% to 50% reduction by 2030 and 65% to 70% by 2035.
We analyse the key features of the new mitigation requirements proposed, consider the context underpinning these reforms and highlight implications and key questions for facility operators.
Key takeaways
The Climate Change Licensee Requirements sets out the overarching framework for the proposed mitigation requirements, detailed across five key areas:
annual emission reporting
preparation of Climate Change Mitigation and Adaptation Plans (CCMAP)
undertaking industry-specific mitigation actions
measuring emissions
emissions limits.
These requirements would be imposed as conditions on EPLs.
The proposed requirements will apply to licensees who emit over 25,000 tonnes of CO2-e of scope 1 and scope 2 emissions in a year in any of the three previous financial years. The Safeguard Mechanism only applies to facilities that emit 100,000 tonnes of CO2-e of scope 1 emissions in a year.
This captures around 10% of facilities regulated by the NSW EPA (approximately 200 of 20,000 regulated facilities). These facilities emit around 50% of all NSW emissions.
The brunt of the facilities captured will be mining and resource facilities. 15–20 existing agricultural processing and intensive livestock facilities will also be captured, as well as landfill facilities.
A climate change emissions report must be submitted to the NSW EPA annually.
Each EPL holder would need to have its own emissions reporting. An organisation holding multiple EPLs cannot submit one report covering all licensed activities.
The NSW EPA has suggested that National Greenhouse and Energy Reporting (NGER) Scheme entities will be able to send their NGER report to the NSW EPA with any additional required information to meet this requirement.
There will be a phased introduction of this requirement:
for Safeguard Mechanism facilities and captured coal mines, the first report must be submitted by 28 February 2026 and every year thereafter
for all other captured facilities, the first report must be submitted by 28 February 2027 and every year thereafter.
A CCMAP must be prepared, submitted to the NSW EPA and published on a publicly accessible website. It must be updated every three years.
CCMAPs must:
publish current and projected emissions, including sources and quantities, and estimates of future emissions for each of the next 10 financial years
outline existing and planned mitigation measures
establish emissions reduction goals that align their scope 1-2 emissions with the State’s legislated emission reduction targets
take into account any current and intended mitigation measures and offsets.
Organisations holding multiple EPLs will only need to prepare a singular CCMAP that covers all licensed activities.
Organisations that have already implemented similar plans under other schemes can re-use existing documentation for their CCMAPs (including for example, NGERs reports and disclosures made in sustainability statements submitted under the climate-related financial disclosures regime), provided any gaps are addressed through an addendum.
There will be a phased introduction of this requirement:
for Safeguard Mechanism facilities and captured coal mines, the first CCMAP must be submitted by 31 October 2026 and updated every three years thereafter
for all other captured facilities, the first CCMAP must be submitted by 31 October 2027 and updated every three years thereafter.
Specific guidance has been prepared for coal mines in the form of the Greenhouse Gas Mitigation Guide for NSW Coal Mines. This guidance proposes a suite of future regulatory requirements for both new and existing NSW mines, targeting scope 1 emissions from fugitive methane and diesel combustion. General guidance for other scope 1, scope 2 and scope 3 emissions is also included.
It proposes to mandate for all mines the adoption of certain abatement technologies within specified timeframes, including:
for underground mines:
compulsory methane destruction or utilisation from gas drainage
detection and management of methane leaks
installation of ventilation air methane abatement technology (such as regenerative thermal oxidation).
for both underground and open-cut mines, use of low-carbon fuel and zero-emission machinery.
Exemptions and time extensions may be available where requirements are demonstrated to be not feasibly met. More information on the scope of these exemptions is needed.
The EPA’s intention is to release other sector-specific guidance over time. There is no timeframe yet for the guidance for other industries.
The Climate Change Licensee Requirements foreshadow the introduction of greenhouse gas emission limits on EPLs.
This follows a commitment from the NSW EPA under its Climate Change Action Plan 2023–26 to:
develop feasible, evidence-based greenhouse gas emission reduction targets for key industry sectors that have EPLs
progressively place ’feasible, evidence-based greenhouse gas emission limits and other requirements on licences for key licensed industry sectors’.
In addition, the NSW EPA has also published the EPA Guide for Large Emitters, which foreshadows the imposition of conditions under development consents and EPLs relating to GHG emissions reduction and mitigation.
Implications for industry
The requirements proposed under the Consultation Papers are an Australian first. No other federal or state legislation or regulatory instrument (including the Safeguard Mechanism) requires specific technology changes to be implemented. Generally, Australian climate change regulation provides for flexibility in compliance for facility operators.
The above presents a series of challenging questions for NSW facilities, who will need to consider:
Aligning reporting with existing reporting frameworks – how best to align their reporting under NGERs and the climate-related financial disclosures regime under the Corporations Act 2001 (Cth) (if applicable) with what will be required under their EPL. Even though the NSW EPA has made efforts to streamline reporting processes, businesses will be required to consider what emissions-related information is currently being prepared and measured at a group level and facility level, and any potential differences in the way that facility boundaries are defined under NGERs and for their licensed activities covered by an EPL.
Assessing project feasibility against required emissions pathways – project emissions pathways will need to align with the NSW legislated targets, which are more ambitious than the Federal Government’s targets under the Climate Change Act 2022 (Cth) and Australia’s commitments under its Nationally Determined Contribution for 2030 (which the Safeguard Mechanism reflects and follows). Therefore, complying with the Safeguard Mechanism may not be enough to ensure compliance with the NSW EPA’s requirements. Businesses will need to assess project feasibility against the more ambitious emissions pathways, taking into account the costs of mitigation measures (or the scaling down of production if required) in their project financial modelling.
Revising mitigation and offset strategies – the requirements proposed are prescriptive in terms of the technology measures to be proposed and the timing for implementation. Businesses will need to consider revising existing decarbonising strategies (for example, their Safeguard Mechanism compliance strategy) with the NSW mitigation requirements. This includes the business’ carbon credit procurement strategy, noting that the NSW EPA has stated in the Climate Change Licensee Requirements and the Climate Change Mitigation and Adaptation Plans: Mitigation Requirements papers that its preference is for facilities to prioritise carbon offsets from NSW-based offset projects because these offsets count towards the NSW emissions inventory.
Solidifying communications plans and preparing an evidence base – public disclosure of key project information, such as emissions sources, proposed mitigation measures, and the use of offsets, could expose businesses to increased litigation and reputational risk, including for potential greenwashing. Businesses should ensure that they have a solid communications plan in place, supported by a robust evidence base for the claims made to help mitigate potential legal risks. Businesses should also provide guidance to their directors and executives on the proposed requirements, noting that CCMAPs will be public, may include forward-looking statements, and may be scrutinised by investors. Directors should ensure robust governance and accurate forward-looking statements to mitigate greenwashing liability.
While the Consultation Papers are only in draft form at this stage, as their first steps, affected businesses should:
engage with the NSW EPA and provide submissions on any concerns
consider the questions we have highlighted above
undertake a legal gap assessment of their existing climate strategies against the proposed requirements, considering for example, existing NGERS reporting requirements against the NSW EPA’s requirements.
It is worth noting that Victoria may soon follow suit. In the Victorian EPA’s recent Statement of Regulatory Intent on Climate Change 2025-2027, it foreshadows taking actions to reduce emissions from major emitters and energy users across scopes 1, 2 and 3.
Similar guidance was proposed by in Queensland but has since been pared back by the new Queensland Government.
Responding to the consultation and the proposed changes
Consultation on the Consultation Papers is open until 5pm, Tuesday 7 October 2025. Feedback can be provided by:
completing an online survey
providing written feedback by emailing a submission to climatechange.review@epa.nsw.gov.au
posted to
Manager, Climate Change Policy
NSW Environment Protection Authority
Locked Bag 5022
Parramatta NSW 2124
Our climate risk and energy transition team are closely tracking the consultation process. Drawing on decades of experience, we regularly help heavy emitting facilities respond to regulatory changes and advise on EPL variations, decarbonisation strategies, corporate transition planning, climate and environmental risk management. We also run tailored workshops for directors and executives on climate change regulations and their interaction with disclosure and financing requirements.
To discuss how the proposed EPL conditions may affect your business or for assistance with submission drafting, please contact us.