NSW Energy from Waste Policy Statement

March 2014

On 18 March 2014 the NSW EPA released its long awaited Energy from Waste Policy Statement (the Policy). It sets the policy framework for Energy from Waste (EfW) facilities in NSW, and provides some certainty to those interested in pursuing EfW projects. However, the questions which will determine if projects proceed are: how practical is the Policy from a commercial point of view, and how much will it help overcome regulatory hurdles in getting projects off the ground?

Outline of the Policy

The Policy recognises that EfW can form a positive part of an integrated waste management, but still prefers avoidance and resource recovery, where possible. EfW facilities will be contingent on demonstrating that they represent the most efficient means of dealing with the waste. 

EfW facilities will fall within two categories - those that use pre-approved “eligible waste fuels”, and those that use a different waste fuel. 

If a plant proposes to use “eligible waste fuels”, there are fewer hurdles to overcome, provided that a resource recovery exemption has been granted. However, such EfW facilities will still need to confirm that there are no practical reuse opportunities for the waste and meet required emissions standards.

Those not using “eligible waste fuels” will have to demonstrate that they will satisfy international best practice in areas such as process design and control, emission controls and monitoring, arrangements for receipt of waste and management of residues. There are also technical criteria and thermal efficiency criteria to be satisfied for these EfW facilities. Additionally, such EfW facilities will need to meet specified resource recovery criteria, which limit the proportion of each waste stream that can be used for EfW facilities.

EfW facilities will also need to be net-positive, in that they generate more energy than they consume.

Commercial drivers

A key factor in the economics of proposed EfW facilities will be the limited waste streams that can be used as fuel, due to the requirement to demonstrate that there are no higher-order uses for the waste (combined with the resource recovery criteria). This is likely to increase input costs. However, the EPA has been clear that the reason behind this is to ensure that EfW does not detract from reuse and resource recovery.

Costs in connecting to the electricity grid, together with variations in electricity demand and prices may impact on EfW facilities, if the sale of power forms a significant portion of the business case for the facility.

Additionally, regulatory difficulties will also impact the commerciality of EfW projects.

Overcoming regulatory hurdles

Despite the Policy, EfW facilities will still be subject to the normal development application process, as well as the need to obtain any required environment protection licences. EfW facilities will likely qualify as “State Significant Development” under the Environmental Planning and Assessment Act 1979, meaning the Minister for Planning will be the consent authority. In practice, this means that the Department of Planning and Infrastructure will be carrying out dayto- day assessment and management of the development application process. In addition to planning and environmental approvals, approvals will be required to put energy back into the grid, which can also be a complicated process. 

Community perception and attitudes will also be key. While Councils are unlikely to be the consent authorities for most EfW projects, they will still be important in managing community attitudes and perceptions.

For facilities using “eligible waste fuels”, a resource recovery exemption must be obtained. While this removes one of the hurdles under the Protection of the Environment Operations Act 1997, obtaining the exemption, and complying with it, may still be complicated processes.

Conclusion

The Policy is a positive step forward for waste management in NSW, as it provides clear principles and criteria for those considering EfW projects. 

Councils and other waste suppliers and generators will need to consider if EfW presents an attractive offering in their integrated waste strategies and, if so, will need to work together with industry to overcome commercial and practical hurdles. For industry clients considering constructing EfW facilities, securing a consistent, long-term waste stream to supply the fuel upfront and ensuring that relevant criteria are met will be crucial.

While there have been mixed comments regarding the commerciality and practicality of the Policy from those in industry, time will tell whether the Policy is a wasted effort, or the kick-start that was needed for EfW projects in NSW.

Nicholas Brunton

I ask myself: What would I want if I was a client? Then I deliver.

Nicholas Brunton Partner

Nicholas is one of Australia's leading environmental lawyers. He is a trusted adviser to his clients in all areas of land use and development, planning, valuation and compulsory acquisition, environmental, mining and natural resources law.

In addition to degrees in law and geography, Nicholas has a PhD in planning and environmental law from the University of Sydney. His expertise is recognised by his appointment to the Board of Water NSW, the advisory Board of the Macquarie University Centre for Environmental Law, and the Advisory Board of Australian Centre for Climate Change and Environment Law at the University of Sydney. He is also a Fellow of the Australian Property Institute, lectures at the University of Sydney and University of New South Wales and has over 30 peer reviewed publications on a wide range of topics in environmental, planning and valuation law and environmental economics.

Nicholas's clients include a large number of government agencies along with major financial institutions, mining and construction companies, property developers and fund managers.

He has extensive experience in all forms of planning and environmental litigation in the Land and Environment Court and Court of Appeal. In particular, he is a recognised leading practitioner in all aspects of valuation and compensation law and acts for a wide range of State Government agencies and landowners, including acting in over 100 compensation and valuation cases in the Land and Environment Court and Court of Appeal.

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Gavin Shapiro

I am with you, the whole way. I am in the trenches, supporting clients with their opportunities and challenges.

Gavin Shapiro Senior Associate

Gavin's practice encompasses both the litigation and transactional sides of environment and planning law. He has acted for private developers as well as Councils in the Land and Environment Court of NSW. He has also developed a particular expertise in the waste industry.

Gavin's expertise includes property development, planning, environmental law (particularly pollution and the waste industry), as well as regulatory/compliance and administrative law.

His clients include private developers, construction and industry clients, local Councils, Government agencies and State-owned corporations. He has represented clients in a number of cases in the Land and Environment Court of NSW including development appeals, compensation cases, civil enforcement proceedings and pollution prosecutions.

Gavin's transactional experience includes acting for many government clients in the procurement of waste and other services, drafting and negotiating VPA's for private developers and Councils, as well as advising both government and private clients on PPP's and infrastructure projects.

He has developed a particular expertise in the waste industry, focussing on procurement, regulation and enforcement and infrastructure delivery. This focus has led to him advising on environmental issues, projects such as the construction of new waste facilities, licensing, the waste levy, and the categorisation, disposal, and transportation of waste. As part of his pollution practice, Gavin also has significant experience in responding to incidents, including site management, EPA investigations, responding to notices and interviews, defending prosecutions, and disputes with contractors.

Gavin is a regular contributor to The Law Society Journal, Inside Waste Magazine and BEN Media.

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