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What's coming up in 2022

Tuesday, 21 December 2021 10:57am

Key federal climate programs will be modified, multiple climate change court rulings will be handed down, plastics, packaging and organics will dominate the waste agenda, and companies will be under pressure to account for impacts on nature.

Climate change:

It's hard to under-estimate the magnitude of the potential changes that are on the way for Australia's climate change regime in 2022, whichever party wins the federal election.

Both major parties are committed to reviews of the ERF/carbon credits regime, and both are planning changes to the Safeguard Mechanism that applies to large emitters.

The Coalition has also signalled changes to Climate Active, the voluntary carbon-neutral program that has so far not drawn much interest from large emitters.

The NGER emissions disclosure scheme will also be adjusted, via the new CERT opt-in regime, so that companies can describe their use of offsets, and detail any other steps they are taking to reduce net emissions.

The first CERT results will be published in March.

Both major parties have also hinted that they will take additional steps to encourage TCFD climate risk disclosure by companies – and neither has ruled out making it mandatory.

The Regulator will also name the successful tenderer for its proposed Australian Carbon Exchange towards the end of the first quarter of 2022, with the exchange expected to be up and running in mid-2023.

Following the closure of bidding on December 7, the results of Victoria's latest renewables auction will be released in the third quarter of 2022. Meanwhile, the ACT will launch its procurement process for at least 250MW of large-scale battery storage.

Tasmania will finalise its updated climate law, and NSW will activate changes to its energy efficiency scheme so that it also rewards actions that can reduce peak energy demand.

AEMO will finalise its updated integrated system plan, which was released this month in draft form.

More new ERF methods will be developed, including an integrated agriculture method that could significantly ramp up the volume of ACCUs earned on farms.

Governments will also increasingly look for ways to encourage companies to minimise embodied carbon in the building materials they use, particularly through the MECLA alliance.

Climate change litigation:

Important climate changes cases will be advanced or finalised in 2022.

They include the federal government's Sharma appeal, as well as two Supreme Court challenges over Woodside's Scarborough project, a class action suit against federal Treasury, and a Nature Conservation Council case against the NSW government.

The Commonwealth Bank is also facing a second climate lawsuit, launched by two shareholders who dropped a previous climate case against the bank in 2017, and Santos will be before the Federal Court over its net-zero claims.

Tackling plastics and packaging:

The federal government will finalise an investigation into strategies to ensure all types of e-waste are recovered.

A national battery stewardship scheme will officially launch in January, and multiple new stewardship schemes are under consideration.

Environment ministers will review progress towards meeting the 2025 national packaging targets, and will be under pressure to take mandatory steps to better manage packaging waste, given the limited progress made through the voluntary APCO regime.

The federal government will also release the recommendations of its review of the used packaging National Environmental Protection Measure, and the APCO regime. The findings were supposed to be released in 2021.

Meanwhile, NSW will apply more pressure on companies to participate in APCO.

The federal government is backing efforts to launch negotiations for a global pact to tackle marine plastic, at UN talks in February, while a federal ban on exporting unprocessed single polymer plastic waste will take effect on July 1.

The ACCC will make its decision on Veolia's proposed acquisition of Suez early in the New Year.

NSW will finalise new rules on the use of recovered fines from general construction and demolition waste, and the EPA's resource recovery regulatory framework will be reviewed.

New NSW restrictions on fire-fighting foams containing PFAS will take effect in September.

A new Recycling Victoria agency, which will operate within the Department of Environment, Land, Water and Planning, will get underway on July 1.

Queensland's waste levies will start to increase, with the revenue supporting a new recycling and jobs fund, and the state government will also finalise its organic waste strategy.

Tasmania is attempting to steer through Parliament a Bill establishing a waste levy regime, and will also establish a container deposit scheme, while South Australia will complete a review of its long-running container deposit scheme.

Meanwhile, Queensland will also decide on the form of its proposed new EPA, and a split of Tasmania's EPA and its environment department will be formalised by legislation.

Valuing natural capital:

In Australia, the federal government is planning to play a large role in supporting the development of markets for biodiversity services, while the Accounting for Nature program is expecting major growth.

Banks have also foreshadowed they will be subjecting companies to increased scrutiny over their biodiversity impacts and disclosures.

At the global level, a nature-focused version of the Climate Action 100+ investor alliance is on the way, and work will start in earnest on a biodiversity version of the TCFD climate disclosure regime.

Key corporate trends:

Key company trends likely to come more strongly to the fore in 2022 include:

  • Sustainability-linked loans and bonds. In the last two months, five ASX companies have secured sustainability-linked loans, and many more are likely to do the same in 2022. Also in the last two months, two companies – Woolworths and Wesfarmers – have issued sustainability-linked bonds.

  • More disclosure and more scrutiny. Following on the heels of BHP, several companies will be holding shareholder advisory votes in 2022 on their climate disclosures, including AGL, Woodside, Rio Tinto, Origin Energy, and Santos. Pressure to align with the TCFD disclosure regime will continue to grow.

  • Even more collaboration. Companies will continue to partner on multiple fronts to tackle the challenges of climate change, assisted by governments and think tanks such as ClimateWorks. They will also continue to participate in bulk buys of clean energy, such as one being negotiated by Macquarie. More councils will jointly tender for waste and recycling services.

  • The rise of the green customer, and of certification schemes. A growing number of customers are either willing to pay a green premium for low-footprint products and commodities – or to penalise high-footprint equivalents. Certification is an important way to prove green claims and, over the coming year, work will advance on new hydrogen, biogas, and farm biodiversity certification schemes.

Footprint is taking a break for the Christmas and New Year holidays, and will resume publishing in mid-January.

We wish all readers a very happy Christmas, and a healthy, safe and successful New Year.

Our office will be staffed intermittently over the holidays and can be reached on (02) 9267 3800.

Thanks for your support, tips, news, and comments, which have been particularly important over the past year. We look forward to bringing you all the crucial climate change and sustainability news in 2022.

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