2022 has seen major developments in climate, environment and energy policy at both the Commonwealth and State level.  With the change in Federal Government, Australia has re-engaged on the international stage on issues such as climate change and biodiversity, as well as introducing a raft of national policies.  In Western Australia, we have seen a suite of changes in relation to land tenure and indigenous engagement, as well as a push to move away from coal reliance.  This article summarises our top 5 highlights from 2022.

1. COP27 concludes with a breakthrough on loss and damage, and with important directions for the business community

The 27th UN Climate Change Conference, COP27, was held in Sharm el-Sheikh in November 2022.  Significantly, country Parties agreed on a global loss and damage fund to provide climate change assistance to vulnerable countries.  Financing climate change mitigation and adaptation was a key theme of the conference: a new long-term climate finance goal was and will continue to be deliberated, even if the current goal remains elusive.  Adaptation was another focus, with Parties agreeing to develop a framework to guide the achievement of enhancing adaptive capacity, strengthening resilience and reducing climate change vulnerability.  Parties also continued to finesse the rules for Article 6. 

Australia was noticeably active and involved in this COP, a marked change from previous COPs, with the Australian pavilion running numerous side events focused on Pacific climate priorities, the importance of First Nations Peoples’ perspectives on climate change and the role of nature-based climate solutions.  COP27 also saw outcomes around guidance to business on climate disclosure, with the recommendations of the United Nations’ High‑Level Expert Group on the Net Zero Emissions Commitments of Non-State Entities and the release of the Australian branch of the Business Council for Sustainable Development’s ‘Triple A+: The Business Role in Accelerating Australia’s Climate Recovery: Ambition, Action, Accountability’ report.  Gilbert + Tobin’s Head of Climate Change and Sustainability, Ilona Millar, was in attendance at COP27.  For more, see our article COP27 concludes with a breakthrough on loss and damage, and with important directions for the business community.

2. UN Biodiversity Conference convenes to agree to a new set of goals for nature over the next decade

The UN Biodiversity Conference (COP15) is currently underway, having commenced on 7 December in Montreal, Canada.  Although covering related issues to COP27, COP15 focuses on the Convention on Biological Diversity, a treaty adopted for the conservation and sustainable use of biological diversity and related issues.  This year, the ‘Post-2020 Global Biodiversity Framework’ is expected to be adopted, the first biodiversity framework in 12 years.  The framework includes 21 targets for 2030, including:

• a $200 billion increase in international financial flows from all sources to developing countries;
• at least 30% of land and seas globally conserved; and
• a 50% greater reduction in the rate of introduction of invasive alien species, and controls or eradication of such species to eliminate or reduce their impacts.

On 8 December 2022, the Commonwealth Minister for the Environment and Water announced that the government will reform Australia’s existing environment laws and develop National Environmental Standards to improve protections and guide decision-making.  In addition, a National Environmental Offsets System will be released by the end of this year which is proposed to enable proponents to make conservation payments where they are unable to finalise proposed developments due to the inability to find suitable environmental offsets.  The announcement comes as a response to Professor Graeme Samuel AC’s independent review into the Environment Protection and Biodiversity Conservation Act 1999 (Cth) which concluded such Act is outdated, ineffective and requires fundamental reform.

3. Momentous progress in Australia’s climate and energy policy

Since the Commonwealth Labor Government came into power, Australia’s climate and energy policy has undergone rapid transformation, including:

• Rewiring the Nation: In October this year, the Federal Government announced its first step in its “rewiring the nation” election promise with the entry into an agreement, alongside Victoria and Tasmania State Governments, for:
  • $1 billion in concessional finance put towards the Marinus Link, interconnecting Victoria and Tasmania; and
  • $1.5 billion in concessional finance put towards renewable energy zones in Victoria.  

The funding for Victoria’s renewable energy zones includes a $750 million loan from the Clean Energy Finance Corporation to ensure the KerangLink, which interconnects the states of Victoria and NSW, is completed by 2028.  AEMO has stressed the urgency of completing KerangLink to ensure appropriate transmission infrastructure is in place before the anticipated closure of coal-fired power stations. 

• Safeguard Mechanism reform: The Department of Climate Change, Energy, the Environment and Water released a Consultation Paper in August outlining its proposed reforms to the Safeguard Mechanism, the pillar of such proposed reforms being the introduction of tradeable Safeguard Mechanism Credits (SMCs) to be issued to facilities covered by the Mechanism whose emissions fall below their designated ‘baseline’ emissions limit.  After receiving over 200 submissions, the Department released draft legislation which would enable the issuance by the Clean Energy Regulator, transfer and surrender of SMCs.  For the key features of the draft legislation and accompanying draft rules, see Safeguard Mechanism reform: Government publishes draft Safeguard Mechanism Credits legislation.  
• Climate Change Bill:  August 2022 also saw the introduction of the Climate Change Bill 2022 (Cth) (Climate Change Bill) and Climate Change (Consequential Amendments) Bill 2022 (Cth) in the first sitting week after Labor came to power.  Prior to the introduction of the Climate Change Bill, the Federal Government updated its Nationally Determined Contribution (NDC) under the Paris Agreement with a commitment to achieve net zero emissions by 2050, and a 2030 target of 43% below 2005 levels.  If passed, the Climate Change Bill will embed Australia’s updated NDC in legislation and pave the way for subsequent NDCs to have the same legal force.  For more on the Climate Change Bill and other changes in climate and energy law, see Movement in Australia’s climate and energy policy.
• Offshore Wind regulations:  In November, the Offshore Electricity Infrastructure Regulations 2022 (Cth) and Offshore Electricity Infrastructure (Regulatory Levies) Regulations 2022 (Cth) (Regulations) came into force, following the release of the draft regulations earlier this year.  Gilbert + Tobin was the only law firm to make a public submission on the draft Regulations.  The Government has said that the aim of the Regulations and the Offshore Electricity Infrastructure Act 2021 (Cth) (OEI Act) is to provide a consistent and transparent regulatory regime for the full lifecycle of offshore renewable energy generation and transmission infrastructure developments.  Further, the OEI Act and Regulations should work to ultimately provide a pathway to de-risking investments and reassure sponsors, financiers, and broader stakeholders alike.  For an overview of Australia’s offshore wind regulatory framework and the Regulations, see Hoisting the Sails: Charting Australia’s offshore wind legislation.
• Capacity Investment Scheme:  In December, the State and Territory Energy Ministers endorsed the Capacity Investment Scheme (CIS) which will provide the national framework to drive new renewable dispatchable capacity.  The Government has said this new revenue underwriting mechanism will unlock around $10 billion of investment in clean dispatchable power to support reliability and security as the energy market undergoes its biggest transformation since the industrial revolution.

4. WA Government overhauls land tenure and Aboriginal Heritage laws and announces transition away from coal  

• New land tenure for large scale renewables and hydrogen: 2022 saw the introduction of the WA Government’s “diversification leases”, a proposed new form of non-exclusive leasehold tenure intended to support large scale clean energy projects and the expansion of carbon farming and other broad-scale uses in WA.  The Land and Public Works Legislation Amendment Bill 2022, which is proposed to enact the diversification lease reforms, was introduced into Parliament in November 2022.  The Bill is expected to pass early in 2023 once Parliament resumes.  The WA Government has also recently announced the introduction of:
  • the Renewable Hydrogen Guidance: Land tenure for large scale renewal hydrogen projects which provides guidance on land access and legal tenure for renewable hydrogen projects – including details of the Government’s preference for how competing land uses should be managed by proponents and the recommended process for hydrogen proponents in obtaining tenure for their projects;
  • the Renewable Hydrogen Policy: Consideration of highest and best use which sets out a preferred, transparent and timely process for managing situations where competing projects are proposed for the same area of land, and the use of a Highest and Best Use Assessment in these cases; and
  • dedicated cross-government functions, supported by a $22.5 million funding commitment, to help streamline approvals for green energy proposals (including critical minerals, hydrogen and renewable energy projects).  These will include a new Green Energy Assessment Unit responsible for streamlined assessment pathways, a new Green Energy Expert Panel to support Government agencies and the Environmental Protection Authority and a new Green Energy Major Projects Group to help steer individual projects through government processes.

  For more on diversification leases, see Diversification leases policy released for public comment in WA and WA Government diversification lease policy should be tough on land use.

• New Aboriginal Cultural Heritage Act: The Aboriginal Cultural Heritage Act 2021 (WA) (ACHA) took shape this year which will phase out the existing Aboriginal Heritage Act 1972 (WA) and, according to the latest government advice, is expected to commence by July 2023.  The ACHA introduces protections for intangible cultural heritage, a new tiered approvals process and a positive requirement to undertake a due diligence assessment prior to proposed activities.  Notably, ‘diversification of land use that is not like for like or less’ is introduced as a Tier 3 activity, likely referencing the introduction of diversification leases.  For a summary of the key takeaways, see Proposed Guidelines to the Aboriginal Cultural Heritage Act 2021.
• Closure of Coal in WA:  In June this year, the McGowan government announced WA’s two remaining state-owned coal plants, the Collie and Muja Power Stations, would close by 2030.  The announcement notes the continued uptake of rooftop solar and renewables forcing a change in the system to ensure security of electricity supply at an affordable price, with the phasing out of coal-fired power estimated to reduce Synergy’s carbon emissions by 80% by 2030.  To ensure continuity of supply, the State will invest an estimated $3.8 billion into new green power infrastructure in the South-West Interconnected System.  This would leave the Japanese-owned Bluewaters Power Station as the last remaining coal-fired power station in WA.

5. 2022 Litigation Trends & What to Expect in 2023

Litigation against Government in respect of alleged duties of care

The Full Federal Court’s decision in Minister for the Environment v Sharma [2022] FCAFC 35 highlighted the legal and policy barriers to establishing a duty of care owed by government departments in respect of climate change risks and harm. Although the claim in Pabai Pabai (which relies on similar duty of care principles but is grounded in Native Title and cultural heritage rights) may yield a different outcome, that proceeding will not be determined for at least another year.

Litigation against major industry players and the beginning of regulatory action in this space

Many of the proceedings commenced against major industry players in the last two years are still trundling towards hearing or otherwise awaiting finalisation, including those against Woodside (in relation to the Scarborough gas project) and Santos (in relation to claims of ‘greenwashing’). However, notable events in recent weeks and months include:

• the Santos NA Barossa Pty Ltd v Tipakalippa [2022] FCAFC 193 decision, in which the Full Federal Court rejected Santos’ appeal of a Federal Court decision which held that Santos had failed to adequately consult with all traditional owners of the Tiwi Islands in respect of its offshore petroleum development in the Barossa gas field;
• the Waratah Coal Pty Ltd v Youth Verdict Ltd & Ors (No 6) [2022] QLC 21 decision, in which the Queensland Land Court held that recommending the approval of Waratah Coal’s coal mine application would (among other things) unduly impact the rights of children and First Nations people under the Human Rights Act 2019 (Qld).  For more on this decision, see Mining leases rejected due to human rights and emissions impacts in Waratah Coal v Youth Verdict & Ors; and
• ASIC’s first enforcement outcome for ‘greenwashing’ in October. For more on this, see And so it beings … ASIC takes it first enforcement action for ‘greenwashing’.

Looking forward to 2023

So long as there remains a disparity between society’s expectations and the response of government and private enterprise to climate change risks and harm, activist litigation will inevitably continue in Australia in 2023. Although domestic legislative reform appears some way off, reforms are progressing in international law, with growing support for a new international crime of ‘ecocide’, which could be problematic for Australian-held offshore interests.

For more on the litigation trends of 2022, see ‘Climate litigation’ on ice for government, but industry to feel the heat.