Western Australia’s environmental watchdog has delivered concern for the state’s LNG industry by declaring all new emissions-intensive projects should be carbon-neutral.

It follows the Environmental Protection Authority’s (EPA) releasing revised guidance on mitigating greenhouse gas emissions from significant new or expanding proposals in Western Australia.

The Independent EPA guidance is not binding on the State Government and is not a government policy, but sets out the approach and expectations of the EPA when considering greenhouse gas emissions related to a proposal.

“The revised guidance released today clarifies what is required from proponents of significant proposals in the State, to avoid, reduce and offset their impacts and includes a more stringent approach to offsets,” EPA Chair Dr Tom Hatton said.

“In the revised guidance the EPA has noted its intention to recommend offsets for proposals with direct emissions above 100,000 tonnes of carbon dioxide equivalent per annum.”

It recommends any new or expansion project in WA fully offsets those emissions.

The move comes just weeks after a landmark ruling by the New South Wales Land and Environment Court’s to knock back Gloucester Resources’ Rocky Hill coal project.

The decision labelled greenhouse gas emissions as a key factor in refusing approval, prompted by the EPA’s assessment that Australia will fall short of its Paris climate commitments under existing federal regulations – with WA being a major contributor.

“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,” Dr Hatton said.

Minister for Resources Matt Canavan told the Australian Financial Review the move was “an act of economic self-harm” for WA that would do nothing to protect the environment and could potentially cost thousands of jobs.

Environment Minister Stephen Dawson said projects needed long-term certainty and wanted a clear understanding of the social, economic and financial implications of the EPA’s guidance.

“The McGowan Government is fully supportive of our job-creating LNG industry and will listen to their views as part of our response to the EPA.

“We will consult widely as part of our consideration of the EPA’s guidance and respond in due course to provide certainty for the industry.”

Last year, the State Government announced that a new co-ordinated Climate Policy for the State would be developed by the end of 2019 to help WA play its part in meeting national emissions targets. It is the State Government’s view that emissions mitigation is best managed through a nationally consistent approach.

APPEA Chief Executive Dr Malcolm Roberts said the EPA’s proposal goes far beyond previous guidance.

“The EPA admits that it has not considered the social or economic impact of its guidelines,” Dr Roberts said.

“Its approach targets WA’s growth industries and will deter local investment, prompting projects to go interstate or overseas.

“WA relies heavily on its reputation as a stable investment destination – the EPA guidelines sends a worrying signal to prospective investors.

“As a general rule, APPEA does not support ad hoc state-based policies to tackle climate change – the industry sees a national, market-based approach as the sensible way to achieve our emissions targets at lowest possible cost.  Selective regulation distorts markets and investment without necessarily achieving lower emissions.

“As far as the LNG industry is concerned, our exports are contributing to a cleaner energy sector in north Asia.  According to recent federal government estimates, Australian LNG exports are reducing emissions by at least 130 million tonnes per year.

“APPEA urges the EPA and the WA government to put aside the guidelines while the state government completes its review of climate change policy.”

Woodside CEO Peter Coleman said the EPA has not consulted with industry proponents who might be directly affected, which amounts to policy on the run in a complex and important area.

“Australia has struggled to formulate stable climate policy for over a decade and the EPA has added to the uncertainty, which threatens already difficult investment decisions,” he said.

“The EPA’s proposal significantly oversteps Australia’s Paris emissions reduction targets and sets a standard that is beyond the current capacity of WA’s offset industry to safely and sustainably deliver.

“National action on climate change is essential, but this imposition of an immediate ‘net zero’ emissions target for WA projects comes 30 years ahead of the Climate Change Authority’s recommendation to achieve that outcome in 2050.

“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.