Draft Amendment to Protection of the Environment Operations Regulation (Scheduled Activities) 2016: Questions and answers

The existing definition of dairy animal accommodation relates to the accommodation of dairy animals at the entire dairy premises, including milking sheds, yards and all pastures owned by the dairy. This definition potentially requires an unknown number of smaller dairies to obtain an Environment Protection Licence (EPL).

It is appropriate for the EPA’s regulatory effort to be largely focused on hard stand and milking areas in dairies where the concentration of effluent from dairy animals is high and represents the greatest potential for environmental impact.

By amending the definition, the EPA will ensure that only large dairies with the potential for significant environmental impacts are required to hold an EPL.

This amendment is mainly administrative. Refining and clarifying the definition to apply only to milking facilities and surrounds will have no effect on the number of EPLs or the EPA’s regulatory costs. As such there will be no additional costs or any increase in regulatory burden for dairy operators.

The amendment clarifies that landscaping supply yards which do not undertake any waste processing are excluded from the requirement to be licensed by the EPA for Waste Storage, Resource Recovery or Waste Processing (non-thermal treatment). Landscaping supply yards are facilities which supply materials for landscaping purposes.

However, this exemption will not include facilities which receive unsegregated building and demolition waste, or receive waste which does not meet the conditions of a Resource Recovery Order at the time it arrives at the facility.

Lower licensing thresholds for Waste Storage, Resource Recovery and Waste Processing (non-thermal treatment) were introduced on 1 August 2015. These lower thresholds provide the EPA with oversight of these facilities to reduce risks to the environment and human health, allow for a more level playing field across the waste industry, and relieve pressure on local government resources.

However, the lower licensing thresholds have the potential to require a number of medium to large landscape supply yards to hold an environment protection licence and become subject to the waste levy system. The EPA recognises that the environmental risk associated with landscape supply and storage yards do not generally represent a significant environmental risk if they:

This amendment will exempt these types of landscape supply yards from the requirement to hold an EPL for their activities.

This change will reduce red tape for legitimate landscaping supply yards which receive waste product processed to specification and undertake no processing of that material. However, the following facilities will continue to be required to be licensed under the POEO Act:

It is proposed that facilities which only store VENM received from off-site, and undertake no processing, be exempt from the requirement to hold an EPL for Waste Storage, Resource Recovery or Waste Processing (non-thermal treatment).

VENM is virgin natural material such as clay, gravel, sand, soil and rock fines which has been excavated or quarried from uncontaminated areas.

As noted above, lower licensing thresholds have been introduced for Waste Storage, Resource Recovery or Waste Processing (non-thermal treatment). However, the lowered licensing thresholds may result in some facilities or locations, which only store VENM, to hold an EPL and be subject to the waste levy system.

When it is correctly classified, VENM is generally considered a low-risk substance if it is not mixed, blended or processed, and is stored for a short period (e.g. VENM storage associated with a major road or rail corridor). Licensing these sites would result in unnecessary administrative burden for minimal environmental benefit.

This change reduces red tape for infrastructure bodies and other facilities which only receive and store VENM. However, if the facility does any of the following, and exceeds relevant licensing thresholds, the occupier will still require an EPL:

The current definition potentially captures activities that do not need to be managed by an EPL, such as earthmoving works on large subdivisions or building sites; and it creates unnecessary differences in the thresholds and definitions for land-based and water-based extractive activities.

Construction activities can have dust, water, noise and vibration impacts, but these impacts are short term and can be managed by the consent authority (e.g. council) through conditions on development consents and/or by prevention/clean up notices. The extracted material from these developments is typically moved around and reused onsite or elsewhere without being sold.

Combining the definitions of land-based and water-based extractive activities will:

Dredging for any purpose, for example for channel maintenance or the construction of a marina, would require a licence if the activity threshold is met.

These amendments are mainly administrative.They will:

With land-based and water-based extraction being merged into one activity (rather than two sub-activities), it is more efficient to have only one threshold to determine when a licence is required and to determine administrative fees. Tonnes is considered a more appropriate measure of the overall amount of materials extracted than cubic metres and is consistent with industry standards.

The amendments will provide greater clarity on what constitutes road construction and when an EPL is required. It will also address the fact that extractive activities and crushing, grinding and separating are inherent in road construction.

The definition for the scheduled activity road construction will be amended to:

The administrative fee thresholds for road construction currently in Schedule 1 of the POEO (General) Regulation only account for the length of road to be constructed. However, the extraction of material (e.g. earth, rock) is an integral part of most road construction projects.

This has resulted in extractive activities being regularly added as a permissible scheduled activity to EPA licences for road construction because:

The licensee pays the higher of the administrative fees for all activities on the licence, which is generally the fee for the extractive activities component of the project.

The amendments will include both the length of road to be constructed and the amount of material to be extracted when determining if a licence is required and the applicable administrative fees.

The fee will potentially increase for some large scale projects. However, the new administrative scale mirrors those already in place for extractive activities and road construction where the higher of the two fees is paid. The changes ensure that consistent fees are applied to these projects.

More road construction projects may need to be licenced as the triggers for road construction will now include tonnage of extracted materials. However, the EPA does not expect that there will be a significant increase in the number of new licences required. The approach ensures there is consistency in licensing across NSW and that the impacts of significant road construct projects and extractive activities are appropriately regulated under EPA’s licensing framework.

The current approach is not the most effective one for regulating the environmental impacts of the NSW operational rail sector, largely because rolling stock operators are not held directly accountable for their environmental performance. As a result, the current regulatory framework has not achieved the level of on-the-ground benefits for the environment and the community that were intended. It has also created a range of administrative inefficiencies and concerns regarding liability.

The EPA proposes amendments to Schedule 1 of the POEO Act so that both rolling stock operators and railway system operators are licensed for their respective activities.

The current approach includes rail construction under railway systems activities, yet rail construction and operation of the rail network are distinct activities that have different impacts on the environment and community. As part of the proposed amendment the EPA is creating a standalone scheduled activity for rail infrastructure construction.

The amendments have followed on from extensive stakeholder consultation on the EPA’s position paper Review of regulation of ‘railway systems activities’ under the Protection of the Environment Operations Act 1997 August 2014. Read more about the position paper.

The proposed changes will ensure the EPA’s regulatory activities can be directly targeted towards operators who have the greatest ability to manage the environmental impacts of the various stages and components of rail activities, including construction, operation of the network (e.g. track and associated infrastructure) and the rolling stock using the network.

This will enable the EPA to more effectively regulate impacts on the environment and work towards further improving the overall environmental performance of the rail sector.

A railway infrastructure operator will be responsible for holding an environment protection licence for the operation, on-site repair, on-site maintenance and on-site upgrading of their railway system when the railway infrastructure runs continuously for more than 30 kilometres.

Railway infrastructure operators will also be responsible for the environmental performance of any railway vehicles involved in the maintenance of their railway system.

There will be no changes to licence fees and the number of licensed railway infrastructure operators. However, railway infrastructure operators will no longer be responsible for the environmental performance of rolling stock that uses their network once new licences or licence variations are issued; e.g. pollution emitted from locomotives. Rolling stock operators will be directly responsible for achieving the environmental performance specified in their licences.

The EPA intends to vary existing railway systems activities licences to railway infrastructure operations licences 10 months after commencement of the Regulation.

This will include a transitional period of 6 months for rolling stock operators to submit a licence application (and for existing railway system operators to lodge an application for a licence variation) and an additional 4 months for the EPA to process the applications. The EPA intends to issue all new rolling stock operators with licences and vary existing railway system activities licences on the same date so the shift of licensing responsibility amongst infrastructure operators and rolling stock operators takes place simultaneously.

Note: During the transitional period, railway system operators will continue to be responsible for the operation of track and the rolling stock operating on their network until the new licences are issued.

Rolling stock operators need to be held directly accountable for their environmental performance. When rolling stock is operated on an EPA licensed railway system it will become a scheduled activity and therefore need to hold a licence. 

The current 17 rolling stock operators will need to hold an EPL and comply with conditions on the EPL, as will any new rolling stock operators commencing commercial operations on the NSW rail network.

The rolling stock operators will also need to pay an annual administrative fee. The fee is based on the nature and scale of the activity, and includes a partial recovery of the EPA’s expected regulatory costs.

A flat administrative fee of 50 administrative units will be set for each rolling stock operating licence, about $5,950 annually (based on 2014–15 administrative unit value).

Note: Operators of light railway vehicles (including trams), inclined railway vehicles, monorail vehicles or railway vehicles that are used solely for heritage purposes will not be required to hold an EPL.

The licence will cover the operation of rolling stock and may include conditions requiring the licensee to minimise emissions of air pollutants, noise, water pollution and waste.

The new licensing proposal will ensure operators are directly held responsible for the environmental performance of their rolling stock. All licence holders will need to adhere to conditions on their EPL.

The EPA will be able to use the licensing framework and its associated tools to ensure that these operators minimise and manage environmental impacts.

The EPA considers that the entity responsible for the loading/unloading of freight should be the entity that is regulated for that activity. The rolling stock operators and railway systems operators only transport the freight and it is therefore not appropriate that they are regulated for this activity.

Impacts from the loading and unloading of freight are managed via:

There will be a transitional period of 6 months for rolling stock operators to submit a licence application and an additional 4 months for the EPA to process the applications and issue new licences. The EPA will issue all new rolling stock operators with licences and vary existing railway system activities licences on the same date so the shift of licensing responsibility amongst infrastructure operators and rolling stock operators takes place simultaneously.

Note: During the transitional period, the environmental impacts of rolling stock will continue to be managed via the railway system operators licences (via their contractual arrangements with rolling stock operators) until the varied and new licences are simultaneously issued to railway system operators and rolling stock operators respectively.

New rolling stock operators starting up after the Regulation commences will not have the benefit of any savings and transitional provisions. They will need a railway activities-rolling stock operations licence before they can commence operations. Parties that find themselves in this situation should contact the EPA directly. The savings and transitional provisions will only apply to existing operators who find that, because of the amendments, they need a licence even though they did not need one previously. 

‘Railway infrastructure construction’ and ‘operation of the rail network’ are distinct activities that have different impacts on the environment and community. Therefore as part of the proposed amendments, railway infrastructure construction will be separated from other railway system activities.

There will be changes to the administrative fee regime for railway infrastructure construction to take into account both the track length to be constructed and tonnage of material extracted. This approach recognises the additional regulatory effort required when significant extractive activities are carried out and is consistent with the framework for licensed road construction activities.

The amendments will:

There will be a transition period of 3 months after commencement of the Regulation for a person carrying out railway infrastructure construction to apply for a licence variation, or a licence if one is now required.

Under the POEO Act, licensing of railway infrastructure construction works below the threshold may still be required if the works result in railways systems occurring outside existing premises. The EPA generally intends to have these types of works covered by the railway activities-railway infrastructure operations licences, but occasions may arise when an entity needs to apply for a separate, scheduled development works EPL.

It is unclear whether the existing definition of contaminated soil treatment includes the treatment of contaminated sediments. Clarifying the definition will remove this uncertainty and ensure that projects involving the remediation of contaminated sediments will continue to be licensed under the contaminated soil treatment scheduled activity.

Clarifying this definition will not result in any change to the current practice of licensing projects involving the remediation of contaminated sediments as contaminated soil treatment projects.

If the definition is not clarified, the current level of confusion will continue as to whether future sediment remediation projects need to be licensed for contaminated soil treatment or for waste processing. Contaminated sediment, like contaminated soil, is a result of past activity at a site and the treatment approaches for contaminated sediments are generally different from waste processing activities.

The existing definition of petroleum products and fuel production excludes the blending of ethanol or biodiesel at fuel storage terminals. However, some operators are wanting to blend small quantities of other substances with fuel at locations such as service stations and this is likely to increase. The storage and handling of fuel and fuel additives at service stations is already governed by existing legislation including the Dangerous Goods (Road and Rail Transport) Act 2008, the Protection of the Environment Operations (Underground Petroleum Storage Systems) Regulation 2014, and the Protection of the Environment Operations (Clean Air) Regulation 2010. The EPA considers that blending of fuel additives with fuel at service stations will not result in any appreciable change in the impacts to public health or the environment, that are already present and regulated at fuel service stations.

Service stations will not be required to hold EPLs to blend small quantities of fuel additives with fuel once the definition is amended. It is expected that more service stations are likely to sell fuel blended with additives in the future. Service stations will continue to operate under current regulatory arrangements.

The EPA is currently aware of only one service station in the metropolitan area that proposes to sell fuels blended with fuel additives to the public. Depending on the commercial success of this and similar ventures, more service stations are expected to blend fuels with fuel additives in the future.