SYDNEY (Reuters) - Western Australia’s environment authority wants big projects to offset their carbon emissions to help curb global warming, a proposal resource companies said could deter investment in the natural gas-rich state.
The state Environmental Protection Authority (EPA) said on Thursday new projects, which could include fertilizer and power plants as well as liquefied natural gas (LNG) export sites, that generate more than 100,000 tonnes per year of carbon dioxide would be required to buy credits to offset their emissions in order to pass the authority’s assessment process.
“This guidance will apply to all new proposals and changes to proposals, including those currently under assessment,” the EPA said in a policy document published on its website.
Its guidance is not binding, but EPA assessments are considered by the state government when approving major projects.
Western Australia (WA) is the country’s biggest producer of LNG with five large plants: the North West Shelf and Pluto LNG, both run by Woodside Petroleum, Chevron Corp’s Gorgon and Wheatstone plants, and Royal Dutch Shell’s Prelude platform.
Planned expansions at Gorgon and Woodside’s planned multibillion-dollar Scarborough and Browse developments would be affected by the new guidelines if enforced by the government.
“Not only will this proposal put at risk new jobs, investment and domestic gas supplies, it positions WA at a competitive disadvantage in the global LNG marketplace,” Woodside Chief Executive Officer Peter Coleman said in a statement on Thursday.
“The state government should reject this approach.”
Following the outcry from the gas industry, Western Australia Premier Mark McGowan said on Friday that the EPA’s new guidelines were not government policy.
“We are not endorsing what they have done,” McGowan told Australian Broadcasting Corp radio in Perth.
“We have some feedback from some of the major investors that it could impact future projects, and of course I have to create jobs and that is my number one priority,” he said.
Consultants Wood Mackenzie said the EPA guidelines were unlikely to affect progress at Scarborough, but said the Browse project could be affected as its gas is relatively high in carbon dioxide content.
Chevron and Woodside were the country’s sixth- and ninth-largest emitters of greenhouse gases last year, according to national data released on Feb 28.
“Over the past two decades the EPA has recommended greenhouse gas abatement measures for around 40 proposals, however, more needs to be done to limit global warming, consistent with the Paris Agreement,” Tom Hatton, chairman of the state EPA, said on Thursday.
Under the 2015 Paris climate change agreement, Australia agreed to cut carbon emissions by between 26 percent and 28 percent from 2005 levels by 2030.
Reporting by Tom Westbrook; additional reporting by Sonali Paul in MELBOURNE; editing by Susan Fenton and Christian Schmollinger