VARIATIONS TO STATE ENVIRONMENT PROTECTION POLICY (AIR QUALITY MANAGEMENT) AND STATE ENVIRONMENT PROTECTION POLICY (AMBIENT AIR QUALITY)

Transcription

1 POLICY IMPACT ASSESSMENT VARIATIONS TO STATE ENVIRONMENT PROTECTION POLICY (AIR QUALITY MANAGEMENT) AND STATE ENVIRONMENT PROTECTION POLICY (AMBIENT AIR QUALITY)

2 POLICY IMPACT ASSESSMENT VARIATIONS TO STATE ENVIRONMENT PROTECTION POLICY (AIR QUALITY MANAGEMENT) AND STATE ENVIRONMENT PROTECTION POLICY (AMBIENT AIR QUALITY) EPA Victoria 40 City Road, Southbank Victoria 3006 AUSTRALIA January 2002 Publication 826 ISBN EPA Victoria

3 FOREWORD Clean air is fundamentally important to Victoria s social, economic and environment health our triple bottom line. We have seen real improvements in Victoria s air quality in the last 20 years, mainly due to reductions in emissions from industry, motor vehicles and domestic sources, such as backyard burning. Despite these improvements, recent scientific studies confirm that air pollution is still associated with impacts on the health and well being of people in Melbourne. In addition, the improvements that have been achieved in overall air quality are not necessarily reflected in the local air quality being experienced in parts of Victoria. Some people continue to be affected by local sources of offensive odour, and the cumulative impact of diffuse sources of emissions can be significant in some areas. In recent years global atmospheric issues, such as the enhanced greenhouse effect and depletion of the ozone layer, have become important too. There is no room for complacency. While we can count on technological development to contribute to reducing emissions, the pressure on Victoria s air quality is only likely to increase due to the growing population and economic activity in the State. Victoria s air quality needs to be managed in an integrated manner that takes into account the latest scientific information and trends in environmental management to ensure Victoria s triple bottom line is protected and enhanced. We also have a requirement to meet the national air quality goals, specified under the National Environment Protection Measure for ambient air quality, by The State environment protection policy (Air Quality Management) sets out the statutory policy framework for managing emissions into the air environment in Victoria. The framework has been developed to ensure that: the environmental quality objectives of the State environment protection policy (Ambient Air Quality) the nationally agreed ambient air quality goals and standards are met; our air quality continues to improve and we achieve the cleanest air possible, having regard to the social and economic development of Victoria; and Victorian and national measures to address the enhanced greenhouse effect and depletion of the ozone layer are supported. i

4 The policy has been extensively reviewed and updated to meet these aims. The review took into account the views of many interested stakeholders in the community, industry and government. This Policy Impact Assessment (PIA) provides an explanation of the provisions in the policy, the rationale behind the provisions, and the key impacts, both positive and negative, of adopting the new policy. BRIAN ROBINSON CHAIRMAN ii

5 EXECUTIVE SUMMARY Why is Air Quality Important? There are many reasons why air quality is an important issue for all of us. The air we breathe is fundamental to our health and well being. This is especially true for people who are susceptible to air pollution: the young, the elderly, asthmatics, and people with lung or heart-related illnesses. Offensive odours seriously affect the lives of many people. EPA receives more complaints about offensive odours than any other issue. Poor visibility due to air pollution detracts from our ability to appreciate the environment around us. As well as the health and well being of people, the quality of our air influences the health and well being of other forms of life too. Certain air pollutants can also affect materials, buildings and other structures. For all these reasons, poor air quality can significantly affect the liveability of an area and its attractiveness as a place to invest and live. What is Victoria s Air Quality Like? Generally speaking, Victoria s air quality is good and has improved in the last 20 years. EPA Victoria routinely monitors air quality in Melbourne, Geelong and the Latrobe Valley for a variety of pollutants. The results of this monitoring show general improvements in air quality in these regions over this time. The improvements have only come about as a result of the combined efforts of the community, industry and government. Emissions have been reduced from a variety of sources to bring about the improvement in air quality. The improvements have mainly resulted from tighter emission controls on motor vehicles and cleaner motor vehicles fuels, the adoption of cleaner production processes in industry, and controls on such activities as backyard burning. Despite the improvements we still have breaches of some of our air quality standards in these regions. Also, recent research conducted by EPA Victoria has found that at current air pollution levels in Melbourne, statistically significant associations exist between daily mortality and hospital admissions for respiratory and cardiovascular disease and ambient levels of particles, nitrogen dioxide, ozone and carbon monoxide. In addition, the air quality in some local areas in Victoria is not as good as it is in others due to the contribution of significant local sources of emissions. Communities are still clearly expressing the view that they want cleaner air in their neighbourhoods. iii

6 How is Victoria s Air Quality Protected? Victoria s approach to environment protection, and its environmental management systems and practices, are based on the provisions of the Environment Protection Act One of the most important instruments for environmental management under the Act is the State environment protection policy (SEPP). SEPPs establish a statutory policy framework for protecting the environment. SEPPs are statutory instruments which must be followed by EPA and other government agencies in developing and implementing their own strategies, plans and programs, and must be complied with by all individuals and organisations (whether public or private) in Victoria. The air environment in Victoria is currently protected by two SEPPs. These were created in February 1999 by dividing the State environment protection policy (The Air Environment) - the first SEPP for the air environment, made in 1981 and subsequently amended several times - into two policies: The State environment protection policy (Ambient Air Quality) or SEPP (AAQ) The State Environment Protection Policy (Air Quality Management) or SEPP (AQM) The SEPP (AAQ) contains the indicators, standards, goals, and monitoring and reporting protocol of the National Environment Protection Measure for Ambient Air Quality (or Ambient Air Quality NEPM ), which was made by the National Environment Protection Council in June When it was made in 1999, the SEPP (AAQ) also carried forward three ambient air quality objectives of the State environment protection policy (The Air Environment) that were not replaced by the provisions of the Ambient Air Quality NEPM, namely for visibility reducing particles and the two 8-hour ozone objectives. The SEPP (AQM) carried forward all of the remaining provisions of the State environment protection policy (The Air Environment) as it stood in February The remaining provisions were not amended when the two new policies were created. The SEPP (AQM) sets the framework for managing emissions to the air environment. These emissions are managed in such a way as to ensure that the air quality objectives of the SEPP (AAQ) are met. EPA has reviewed both SEPPs. All of the provisions of the SEPP (AQM) have been reviewed. For the SEPP (AAQ), only those ambient air quality objectives that were not replaced in adopting the Air NEPM were reviewed. Why have SEPP (Air Quality Management) and SEPP (Ambient Air Quality) been updated? It is critical that the SEPP (AAQ) and SEPP (AQM) reflect the latest developments in environmental management to ensure that the community s aspiration for the cleanest air possible, having regard to the State s social and economic development, is achieved. Emissions to the air environment must also be managed to ensure that the objectives of the SEPP (AAQ) are met. In June 1999 EPA determined that the SEPP (AQM) would be varied, and that all of its provisions would be reexamined in developing a draft of the varied policy. The following issues were considered central to the review: iv

7 recent developments in environmental management at State, national and international levels; significant developments in environmental management technologies and associated practices, in particular the move towards cleaner production in industry; recent progress in environmental research; new scientific information on the impacts of hazardous air pollutants that had become available since the last policy review; continuing developments in the modelling of air pollution; the provisions in the Act for the review of SEPPs; and changes to local government boundaries that affect the definition of Air Quality Control Regions. What changes have been made? Principles of Environment Protection With the introduction of a set of guiding principles into the Environment Protection Act 1970 early in 2001, the policy has been amended to reflect those principles. The incorporation of these principles in the policy reflects national agreements and important shifts and developments in environmental management in recent years. The principles include the integration of economic, social and environmental considerations; shared responsibility; product stewardship; wastes hierarchy; and integrated environmental management. Greater Emphasis on Non-Industrial Sources of Emissions When the first SEPP for the air environment was introduced in 1981, there was a strong focus on controlling emissions from industrial sources. Since then, significant advances have been made in reducing emissions from industry. Although industry remains an important source of emissions, and is still comprehensively addressed in the new SEPP (AQM), in recognition of the fact that there are many other significant sources of emissions there is much greater emphasis on other sources. Motor vehicles are still the major overall source of many air pollutants, especially in Melbourne. The SEPP (AQM) reinforces EPA s participation in national processes to set emissions standards for new vehicles and improve fuel quality, and also puts in place a range of new initiatives to improve the in-service performance of motor vehicles. Measures to reduce emissions by investigating and encouraging alternatives to using motor vehicles and new cleaner technologies are also provided. v

8 Solid fuel heating, such as wood heating or open fires, can be a major source of some pollutants in the cooler months. The SEPP (AQM) puts in place a range of measures to help reduce emissions from these domestic sources. A variety of burning practices in the open can also have impacts on air quality from the smoke they generate, and new tools for cooperatively addressing this with stakeholders have been introduced, and effective tools currently in place have been reinforced. More Hazardous Pollutants Managed to a Higher Level of Control The number of pollutants recognised as being the most hazardous the Class 3 indicators : those that are carcinogenic, mutagenic, teratogenic, highly toxic or highly persistent has been increased from eight to 26. This is in light of recent developments in the understanding of the health effects of these pollutants. The requirement under the SEPP (AQM) is that emissions of these pollutants be reduced to the maximum extent achievable. All the design criteria in the policy for emissions from new premises have been updated in light of recent information on the health effects of these pollutants. Some important pollutants that fall into less hazardous categories, but nevertheless are still important to manage, have also been incorporated into the policy for the first time, such as PM 10 and PM 2.5. Greater Flexibility in Managing Emissions As indicated above, emissions of Class 3 indicators must be reduced to the maximum extent achievable under the policy. This is a slight change from the previous SEPP (AQM), which required these pollutants to be reduced to the maximum extent achievable by technology. The reduced emphasis on expensive end-of-pipe technology means that industry will be encouraged to consider examining opportunities higher up the wastes hierarchy to reduce emissions, such as avoiding the creation of hazardous emissions in the first place. The benefits of applying this cleaner production approach to emissions management are well documented and can have benefits both in terms of reduced emissions and more cost-effective solutions. Risk Assessment An important environmental management tool the SEPP (AQM) formally incorporates for the first time is risk assessment. The ability to conduct a risk assessment will enable emissions generators to better assess the impact of their emissions on the surrounding environment. vi

9 This will have benefits for industry by enabling environmental management investment to be better targeted to where it is most needed, and for local communities by enabling a better appraisal of the impacts of industry in their area to be conducted. New Health-Based Local Air Quality Standards For the first time in the SEPP (AQM), health-based standards that can be used for monitoring local air quality have been introduced. These intervention levels are air quality standards that have been developed for a set of pollutants that have many sources. They are intended to be used in neighbourhoods where the cumulative impact of a variety of sources may be causing local air quality problems. Intervention levels will be one of the criteria used to assess whether a Neighbourhood Environment Improvement Plan (NEIP) needs to be developed to improve air quality in a neighbourhood. These intervention levels will not be used to assess the impacts of single sources of pollutants. The normal tools under the Environment Protection Act 1970, such as licences and pollution abatement notices, will continue to be used to control emissions from such sources. Better Management of Greenhouse Gas Emissions from Industry Consistent with the emerging trend of better integration of environmental management, the SEPP (AQM) now incorporates consideration of emissions of greenhouse gases with other emissions management. When companies apply to EPA for a works approval in future, they will be required to consider their emissions of greenhouse gases, and energy consumption that leads to the generation of greenhouse gases, as part of that works approval. This will lead to benefits for industry too as it is well recognised that investment in energy efficient processes and technology generally has very quick pay back periods, and thereafter results in significant savings. Protocols for Environmental Management Another new tool introduced into the policy is the Protocol for Environmental Management (PEM). PEMs will deal with the detail of air quality management and will be able to be readily updated to reflect the latest developments in environmental management practice and science. PEMs will be developed with stakeholders and provide an opportunity for public comment to ensure that a range of perspectives are taken into consideration in their development. State Environment Protection Policy (Ambient Air Quality) As indicated previously, three ambient air objectives of the 1981 State environment protection policy (The Air Environment) were not replaced by the provisions of the Air NEPM, and were included in the SEPP (AAQ) in February 1999 without review. These were the visibility objective and two 8-hour ozone objectives for protection vii

10 of vegetation. In June 1999, EPA determined that these objectives should be reviewed at the same time as the review of the SEPP (AQM). It has been decided to retain the visibility objectives as visibility remains one of the key indicators by which the community assesses air quality. It has been decided to remove the two 8-hour ozone objectives as they were based on information that is no longer considered to be relevant for the protection of vegetation in Victoria, and other objectives give an indication of this protection. What will the impacts be? The 1981 SEPP has helped to drive significant improvements in air quality in Victoria during the past 20 years. Despite these improvements, air pollution is still of concern to many Victorians and recent studies show that air pollution has an impact on people s health in Melbourne. The pressure on our air environment is only expected to increase as Victoria s economy and population base continues to grow, particularly in Melbourne and other major urban centres. In this context, the proposed variations to SEPP (Air Quality Management) retain the successful general approach of the 1981 SEPP and update it in a number of important ways to ensure continued improvements in air quality in Victoria. In particular, the proposed variations update the 1981 policy framework to ensure that air quality management in Victoria reflects the: improved scientific information that has become available during the past 20 years, including improved knowledge about the health impacts of various pollutants; changes in industry practices during the past 20 years; and emergence of important global air quality issues such as global warming and ozone depletion that were little understood in There are a variety of factors that affect the behaviour of people and organisations who generate air pollutants. For example, while in 1981 most companies may have been solely motivated by a desire to comply with air quality laws, many companies are now motivated by a variety of factors to reduce air emissions. The SEPP has been updated to recognise and capitalise on the multiple factors that can drive air quality improvements. Furthermore, the SEPP provides considerable flexibility to manage air emissions from a variety of sources on a case-by-case basis. In impact assessment terms, this means that it is not possible to cleanly attribute benefits and costs to the proposed SEPP. For example, EPA cannot argue that all the benefits from reduced industrial air emissions flows from the adoption of the SEPP. Similarly, it is not possible to specify that all the costs of industrial emission actions can be attributed to the SEPP. viii

11 Where possible, case studies and range estimates are provided in this PIA to illustrate the nature and scale of impacts. The impacts are summarised in Chapter 5. Overall, the SEPP will set the framework for continued improvements in air quality achieved through cost-effective means for industry and the broader community. ix

12 TABLE OF CONTENTS FOREWORD... I EXECUTIVE SUMMARY...III WHY IS AIR QUALITY IMPORTANT?...III WHAT IS VICTORIA S AIR QUALITY LIKE?...III HOW IS VICTORIA S AIR QUALITY PROTECTED?...IV WHY HAVE SEPP (AIR QUALITY MANAGEMENT) AND SEPP (AMBIENT AIR QUALITY) BEEN UPDATED?...IV WHAT CHANGES HAVE BEEN MADE?...V WHAT WILL THE IMPACTS BE?... VIII GLOSSARY 1 INTRODUCTION THE IMPORTANCE OF AIR QUALITY STATE ENVIRONMENT PROTECTION POLICY...1 What is a State environment protection policy?...1 Which SEPPs protect air quality? REASONS FOR THE POLICY REVIEW POLICY DEVELOPMENT PROCESS POLICY IMPACT ASSESSMENT AIR QUALITY IN VICTORIA AIR POLLUTANTS OF CONCERN IN VICTORIA... 8 Common Air Pollutants... 8 Air Toxics SOURCES OF AIR POLLUTANTS CURRENT AIR QUALITY...14 Regional Air Quality...14 Local Air Quality Global Air Quality FUTURE AIR QUALITY POLICY OPTIONS OPTION 1: DO NOTHING OPTION 2: MAINTAIN THE CURRENT POLICY STRUCTURE BUT REVISE THE SCHEDULES TO THE SEPP (AIR QUALITY MANAGEMENT)...19

13 3.3 OPTION 3: VARY THE POLICIES PREFERRED OPTION IMPACTS OF EACH OF THE ALTERNATIVE OPTIONS...21 Option 1: Do Nothing...21 Option 2: Maintain the current policy structure but revise the schedules to the SEPP (Air Quality Management) POLICY CHANGES AND ASSESSMENT OF POLICY IMPACTS STATE ENVIRONMENT PROTECTION POLICY (AIR QUALITY MANAGEMENT)...24 Structure of the SEPP (AQM)...24 Assessment of the Impacts of the Policy Clauses STATE ENVIRONMENT PROTECTION POLICY (AMBIENT AIR QUALITY)...87 Objective for visibility reducing particles...87 Objectives for photochemical oxidants...88 Assessment of the impacts of the policy variations SUMMARY OF IMPACTS...90

14 GLOSSARY AQIP BACT BAP BAU BPEM CFCs CO CO 2 EPA GEM MEA MEAT MVEC NEIP NEPC NEPM NGS NRTC NO 2 NO X O 3 PAH PEM PIA Air Quality Improvement Plan Best Available Control Technology Best Available Practices Business as Usual Best Practice Environmental Management Chlorofluorocarbons Carbon Monoxide Carbon Dioxide Environment Protection Authority Guideline for Environmental Management Maximum Extent Achievable Maximum Extent Achievable by Technology Motor Vehicle Environment Committee Neighbourhood Environment Improvement Plan National Environment Protection Council National Environment Protection Measure National Greenhouse Strategy National Road Transport Commission Nitrogen Dioxide Oxides of Nitrogen Ozone Polycyclic Aromatic Hydrocarbons Protocol for Environmental Management Policy Impact Assessment

15 PM 2.5 PM 10 SEPP SEPP (AAQ) SEPP (AQM) SO 2 UNFCCC VGS VOC Particulate Matter of an aerodynamic diameter less than 2.5 micrometres Particulate Matter of an aerodynamic diameter less than 10 micrometres State environment protection policy State Environment Protection Policy (Ambient Air Quality) State Environment Protection Policy (Air Quality Management) Sulphur Dioxide United Nations Framework Convention on Climate Change Victorian Greenhouse Strategy Volatile Organic Compounds

16 1 INTRODUCTION 1.1 The Importance of Air Quality The quality of the air that we breathe is important to all Victorians. Air pollution can have adverse impacts on our health, our enjoyment and appreciation of our surroundings, the health of the living environment, and the integrity and appearance of materials and the built environment. Air quality is also an important indicator of the liveability of a city, town or region and its potential to attract tourism and business investment. Air quality is consistently ranked as the main environmental concern within urban communities. Victorians place a high value on air quality and want the cleanest air possible that is consistent with achieving the State s economic and social development goals. This challenge needs to be viewed from two perspectives. On the one hand, many of the activities that generate emissions of air pollutants have important economic and social benefits (for example, the economic productivity of industry, and the high mobility afforded by motor vehicle usage). On the other hand, air pollution may have economic and social costs associated with health-related and other impacts. Recent research conducted by EPA Victoria (Melbourne Mortality Study, Ambient Air Pollution and Daily Hospital Admissions in Melbourne (publication 789)) has found that at current air pollution levels in Melbourne, statistically significant associations exist between daily mortality and hospital admissions for respiratory and cardiovascular disease and ambient levels of particles, nitrogen dioxide, ozone and carbon monoxide. Much of what we do on a daily basis has an impact on the air environment. Air quality is strongly influenced by emissions from those industries (both large and small) which make the products that we buy, from the motor vehicles that we drive, and from the fuels that we use to heat our homes. The impacts of these sources on air quality are particularly strong in cities such as Melbourne and in larger regional centres. Improving air quality requires action by all sectors of the community, including government, industry, communities and individuals. 1.2 State Environment Protection Policy What is a State environment protection policy? Victoria s approach to environment protection, and its environmental management systems and practices, are based on the provisions of the Environment Protection Act This Act established the Environment Protection Authority (EPA) and defines its powers, duties and functions. The Act s provisions include statutory powers, instruments and measures to: manage environmental quality; establish environmental standards and criteria; regulate emissions, discharges and wastes; and prevent and clean up pollution. Some of the most important instruments for environmental management include State environment protection policies (SEPPs), industrial waste management policies, regulations, works approvals, licences and pollution abatement notices. 1

17 SEPPs establish a statutory framework for protecting the environment. The Governor in Council declares SEPPs, on the recommendation of EPA. These policies: identify the beneficial uses of the environment (including particular segments such as the air environment, or a particular water body or catchment) that are to be protected; establish environmental indicators and associated environmental quality objectives to establish if the environment is being protected; and define programs for attainment of these objectives so that identified beneficial uses are adequately protected. Attainment programs usually specify a range of approaches, measures and instruments for policy implementation, and often require the compliance and cooperation of government agencies, industry and the community to manage sources of pollution, reduce environmental impacts and improve environmental quality. SEPPs are statutory instruments which must be followed by EPA and other government agencies in developing and implementing their own strategies, plans and programs, and must be complied with by all individuals and organisations (whether public or private) in Victoria. SEPPs are developed through a consultative process and when declared by Governor-in-Council, express in law the community s expectations for the protection of the environment. SEPPs provide the management approach and technical basis for the application of works approvals, licences and other statutory measures to manage the environment. The application of these instruments and measures must always be consistent with the requirements of SEPPs. Which SEPPs protect air quality? Two SEPPs currently protect Victoria s air environment. These were created in February 1999 by dividing the State Environment Protection Policy (The Air Environment) (made in 1981 and subsequently amended several times) into two policies: The State environment protection policy (Ambient Air Quality) or SEPP (AAQ), and The State Environment Protection Policy (Air Quality Management) or SEPP (AQM). The SEPP (AAQ) contains the indicators, standards, goals and monitoring and reporting protocol of the National Environment Protection Measure for Ambient Air Quality (or Ambient Air Quality NEPM ), which was made by the National Environment Protection Council in June When it was made in 1999, the SEPP (AAQ) also carried forward three ambient air objectives of the State Environment Protection Policy (The Air Environment) that were not replaced by the provisions of the Air NEPM, namely for visibility reducing particles and the two 8-hour ozone objectives. The SEPP (AQM) carried forward all of the remaining provisions of the State environment protection policy (The Air Environment) as it stood in February The remaining provisions were not amended when the two new policies were created. The SEPP (AQM) sets the framework for managing emissions to the air environment. These emissions are managed in 2

18 such a way as to ensure that the air quality objectives of the SEPP (AAQ) are met. Both of the current SEPPs identify the following beneficial uses of the air environment: health and well-being of humans; life, health and well-being of other forms of life, including animals and vegetation; visibility; useful life and aesthetic appearance of buildings, structures, property and materials; and aesthetic enjoyment and local amenity. Both SEPPs have been reviewed by EPA. All of the provisions of the SEPP (AQM) have been reviewed. However, for the SEPP (AAQ), only those ambient air quality objectives that were not replaced in adopting the Air NEPM were reviewed. 1.3 Reasons for the Policy Review It is critical that the SEPP (AAQ) and SEPP (AQM) reflect the latest developments in environmental management to ensure that the community s aspiration for the cleanest air possible is achieved. Emissions to the air environment must also be managed to ensure that the objectives of the SEPP (AAQ) are met. In June 1999, EPA determined that the SEPP (AQM) would be varied, and that all of its provisions would be re-examined in developing a draft of the varied policy. In reaching this determination, EPA drew upon its experience and involvement in environmental management at the local, State, national and international levels. The following issues were considered central to the review: recent developments in environmental management at State, national and international levels; significant developments in environmental management technologies and associated practices; recent progress in environmental research; new scientific information on the impacts of hazardous air pollutants that had become available since the last policy review; continuing developments in the modelling of air pollution; the provisions in the Act for the review of SEPPs; and changes to local government boundaries that affect the definition of Air Quality Control Regions. Some of these developments are elaborated on below. Approaches to environmental management practice in Victoria, Australia and overseas have shifted significantly towards: avoiding the creation of wastes through cleaner production and eco-efficiency, rather than controlling wastes at the end of a process; integrating environmental management across all environmental media; working in partnership with stakeholders, rather than managing by command and control ; 3

19 promoting non-regulatory approaches, such as best practice guidelines and environmental management systems, to support regulatory measures; and in the case of air quality, placing greater emphasis on managing mobile, domestic and other diffuse sources, as well as point sources. To achieve the best possible air quality in Victoria, a philosophy of continuous improvement needs to be adopted in all aspects of air quality management and by all Victorians. Also, it is now widely accepted that the responsibility for managing air quality should be shared by all levels of government, business and industry, as well as groups and individuals. Under the principle of product stewardship, producers and users of goods and services (and those who manage their wastes) should share responsibility for managing environmental impacts over the life cycle of those goods and services. Commonwealth, State and Territory Governments and the Australian Local Government Association made the Intergovernmental Agreement on the Environment in Under this agreement the development and implementation of environmental policies and programs in Australia is to be guided by an agreed set of policy principles, including ecologically sustainable development, the integration of economic and environmental considerations, and the use of economic measures in environmental management. The principle of eco-efficiency, which recognises that economic, social and environmental goals are interrelated, is now being pursued in environmental management in an integrated manner to maximise overall benefits to society. The use of the waste hierarchy for environmental management, with its preference for waste avoidance and minimisation over waste treatment and disposal, is also now widely practiced in Australia. Many of these principles were built into the Environment Protection Act 1970 early in 2001, and now guide everything done under the Act. Research into the health impacts associated with exposure to air pollution continues to produce findings of relevance to air quality management. These findings may be used to classify and prioritise these substances and to develop criteria for assessing and managing their potential impacts on public health and the environment. Risk assessment is beginning to play a more significant role in environmental management. The setting of management priorities, the establishment of environmental criteria and objectives, and the assessment of environmental and health impacts all involve the assessment of risk, even if this is not formally acknowledged in decision making. The establishment of the National Environment Protection Council (NEPC) and the Motor Vehicle Environment Committee (MVEC) represent a new direction for Environment Protection in Australia. In particular the development of NEPMs provides nationally consistent targets for protection of the environment. International and national commitments on greenhouse gas emissions and ozone-depleting substances (for example, as expressed through the National Greenhouse Strategy and the National Strategy for Ozone Protection) also provide new directions for the environmental protection in 4

20 Victoria. National and international commitments in relation to greenhouse gas emissions are being reflected and built on in Victoria through the development of the Victorian Greenhouse Strategy. Finally, approaches to local and regional air quality management have developed considerably over the last two decades, and it is now important to review and restate the preferred management approaches in policy terms to ensure that the community s aspirations for clean air are achieved. The above developments have been considered in this policy review, and are reflected in the provisions of the SEPP (AQM). As indicated in section 1.2.2, three ambient air objectives of the 1981 State environment protection policy (The Air Environment) were not replaced by the provisions of the Air NEPM, and were included in the SEPP (AAQ) in February 1999 without review. In June 1999 EPA determined that these objectives should be reviewed at the same time as the review of the SEPP (AQM). 1.4 Policy Development Process Following EPA s determination in June 1999, a detailed internal review of the SEPP (AQM) was conducted, and a preliminary draft of a varied SEPP (AQM) was prepared for public comment. The work of this review was primarily based on an assessment of policy development needs arising from the developments and issues identified in section 1.3 above. The preliminary draft was released, together with a draft Air Quality Improvement Plan (AQIP) for the Port Phillip Region and the Melbourne Mortality Study, in June Comments were invited from the public on the preliminary draft SEPP (AQM) and the draft AQIP. Twenty-nine submissions were received on the preliminary draft SEPP (AQM). These comments were considered in developing the formal draft SEPP (AQM) and draft PIA. In December 2000 the formal draft SEPP (AQM) and draft PIA were released for public comment. EPA conducted an extensive consultative process with more than 80 consultation sessions conducted in Melbourne and many regional centres. Ninety-three submissions were received on the draft Policy and draft PIA and comments contained in these submissions have been considered in the finalisation of the Policy. This PIA also addresses the outcome and implications of EPA s review of three ambient air quality objectives in the current SEPP (AAQ). Given the relative simplicity of the actions proposed by EPA as a result of this review, no draft policy document was prepared. However, it should be emphasised that comments were also invited on EPA s proposals for revising SEPP (AAQ). EPA considered a range of possible policy options for protecting Victoria s air environment before preparing the draft variation. These options were judged against their ability to achieve the desired outcome of a flexible and robust framework consisting of the principles, approaches and measures for managing air quality at the local, regional and State levels and addressing global environmental issues. Three possible approaches considered were: Option 1: do nothing and allow the SEPP (AQM) to continue in its current form; Option 2: maintain the current policy structure but revise the Schedules to the SEPP (AQM); and 5

21 Option 3: vary the policies to reflect developments over the course of the last decade. The assessment of these options is provided in Chapter 3. EPA considered each of these options and has varied the SEPP (AQM) to reflect developments over the course of the last decade, and the SEPP (AAQ) to update the relevance of the indicators for vegetation protection and visibility. This option provides a modern and flexible policy framework for the management of emissions to the air environment. In particular, this option provides a mechanism to drive continuous improvement in air quality and achieve the cleanest air possible consistent with the pursuit of Victoria s economic and social development goals. A series of background papers were released with the draft SEPP (AQM) and draft PIA to explain the background to some of the policy issues, and the reasoning behind the proposed variations. These papers dealt with: the classification of air quality indicators, and the development of design criteria (for assessing proposals involving new or expanded sources of emissions) and intervention levels (for assessing actual impacts on neighbourhood air quality) for these indicators; issues relating to, and possible approaches to, odour management; prescribed burning, waste burning and fire management; the management of emissions of greenhouse gases and energy use (for which a draft Guideline for Environmental Management was also prepared); modelling of emissions from point, line and area-based sources; and approaches to assessing the health risks associated with air pollutants. Comments were invited on the issues outlined in these background papers, and on the draft Guideline for Environmental Management Greenhouse and Energy. All public comments received were evaluated by EPA and considered in the finalisation of the policies. A summary of public comments and EPA s responses to those comments has been prepared and distributed to all individuals and organisations that submitted comments. 1.5 Policy Impact Assessment A Policy Impact Assessment (PIA) is required for each new SEPP or SEPP variation. PIAs are intended to provide information on the need to develop or vary statutory policy, the nature and meaning of policy proposals, and their practical impacts and implications. In particular, PIAs seek to explain the intended means of implementing a new or varied policy, and the likely environmental, social and economic impacts of implementation. The PIA is also the medium by which the process of policy development is clearly outlined for the Victorian community, including the seeking and review of public comments. The information in a draft PIA is provided to assist those who are interested in reviewing a draft policy to understand and evaluate the possible 6

22 implications of policy change and to provide informed comment on policy proposals (should they wish to do so). A final version of the PIA is produced when the formal policy proposal is recommended by EPA to the Governor in Council, after public comments have been evaluated and any changes considered necessary have been made to the draft policy. This PIA has been prepared to accompany the final SEPP (AQM) when recommended by EPA to Governor-in-Council for declaration. This PIA explains the policy changes and associated impacts and also highlights issues raised through the public consultation and changes made to the policy to address these issues. This PIA contains the following sections: information on levels and trends in emissions and air quality in Victoria (Chapter 2); a discussion of the policy and of the policy options considered (Chapter 3); a discussion of the policy variation and its impacts (Chapter 4); and a summary of the impacts of the policy proposals (Chapter 5). 7

23 2 AIR QUALITY IN VICTORIA 2.1 Air Pollutants of Concern in Victoria The air pollutants identified in the SEPP (AQM) fall into three categories: common widespread air pollutants that are emitted from numerous, widely-distributed sources or formed as secondary pollutants in the atmosphere; air toxics, which are present in low concentrations with characteristics such as toxicity or persistence so as to be a hazard to human, plant or animal life; and air pollutants (such as nuisance coarse dust and odour) that can be a nuisance and therefore affect people s amenity. In the SEPP (AQM) the common air pollutants are classified as Class 1 indicators, and the air toxics as Class 2 and 3 indicators. Class 3 indicators are those air toxics that are considered to be extremely hazardous because of their carcinogenic, mutagenic, teratogenic, highly toxic or highly persistent properties. In general, Class 1 indicators are of concern at a regional level due to the large number of sources of these pollutants. Class 2 and 3 indicators are mainly of concern for local air quality, although some Class 3 indicators, such as benzene, can also be of concern at a regional level due to a number of widespread sources, for example motor vehicles. While these distinctions are useful from an air quality management perspective, it should be recognised that they are not clear-cut. The Class 1 indicators may also have local impacts in the vicinity of sources of their emissions. Some common air pollutants are not actually emitted directly from sources, but formed in the atmosphere via chemical reactions between other pollutants. These pollutants are termed secondary pollutants. Ozone, the main constituent of photochemical smog, is an example of such a pollutant. Ozone has been defined as an environmental quality indicator in the SEPP (AAQ). The background paper released with the draft SEPP (AQM) PIA Indicators for Air Quality Management and Criteria Assessment (EPA Publication 743) provided details of the Class 1, 2 and 3 indicators that are defined under the SEPP (AQM). Common Air Pollutants The common pollutants identified in the SEPP (AAQ) include carbon monoxide (CO), photochemical oxidants (expressed as ozone or O 3 ), airborne particles (as PM 10 ), nitrogen dioxide (NO 2 ), sulfur dioxide (SO 2 ) and lead. Photochemical oxidants are formed from complex chemical reactions involving oxides of nitrogen (which are principally nitric oxide (NO) and nitrogen dioxide (NO 2 )) and volatile organic compounds (VOCs). These reactions take place in the atmosphere under stable atmospheric conditions and strong solar radiation. Airborne particles may have a diverse chemical composition and a range of particle sizes. 8

24 Ozone in our air and in the ozone layer Ozone is involved in two atmospheric processes. A layer of ozone occurs naturally in the stratosphere and is essential to human health as it filters out harmful ultraviolet rays. Action to protect the ozone layer from ozone-depleting substances has been under way for some time now, and the SEPP (AQM) explicitly supports this action for the first time. An Industrial Waste Management Policy has been developed to address ozone-depleting substances in Victoria. Ground level ozone occurs in the troposphere (that is, near the Earth s surface) and is the principal measure of photochemical smog. Ozone in the troposphere can be harmful to human health and other aspects of the environment. Each form of ozone is the same chemical (O 3 ), but the environmental impact varies depending on whether the ozone occurs in the stratosphere or in the troposphere. Air Toxics The SEPP (AQM) categorises air toxics into Class 2 and Class 3 air quality indicators. Class 2 indicators are those substances that are considered to pose a threat to beneficial uses of the air environment by virtue of their toxicity, bio-accumulation or odorous characteristics. Class 3 indicators are extremely hazardous substances that are known to be carcinogenic, mutagenic, teratogenic, highly toxic or highly persistent. Generally speaking, Class 2 and 3 indicators are emitted into the atmosphere within an airshed at much lower volumes than the common air pollutants, but most of them are considered to be hazardous at much lower concentrations. Class 2 and 3 indicators are not routinely monitored. Their management relies largely on minimisation of their emissions at source. EPA conducts campaign monitoring for air toxics, usually around potential hot-spots such as near industrial complexes or major roads. A significant amount of data has been collected in Melbourne and is summarised in the State of Knowledge Report on Air Toxics (Environment Australia 2001). The results of this monitoring are mainly for benzene, 1,3-butadiene, toluene, xylene, and formaldehyde and indicate that levels of these pollutants experienced in Melbourne are quite low by international standards. 2.2 Sources of Air Pollutants There are many sources of air pollution in Victoria. Motor vehicles remain the major source of the common air pollutants, especially NO 2 and CO. Domestic wood heating is a significant source of particles in cooler months. For the air toxics, both industry and motor vehicles are significant sources. Figure 1 illustrates the relative contributions of the main sources of some common air pollutants or their precursors (PM 10, PM 2.5, CO, NO X ) to total annual emissions in the Port Phillip Region in (Port Phillip Emissions Inventory, EPA Publication 632). It can be seen that motor vehicles are major contributors to total emissions of CO and NO X with 83 per cent and 63 per cent of emissions arising from this source respectively. Heavy vehicles (buses 9

25 and trucks) contribute 16per cent of CO and 22 per cent of NO X from all motor vehicles. The contribution of motor vehicles to NO 2 concentrations is clearly reflected in figure 2. This figure, which shows the results of regional modelling in Geelong, clearly illustrates the highest concentrations of NO 2 occur near major roads, reflecting traffic density. Motor vehicles are also a significant source of emissions of PM 10 and PM 2.5. Industry contributes 23 per cent of NO X and 36 per cent of PM 10 to the total emissions of these pollutants. Domestic wood heating contributes 38 per cent of PM 10, 45 per cent of PM 2.5 and 11 per cent of CO emissions. Figure 3 shows the relative source contributions for the air toxics benzene, formaldehyde, vinyl chloride, 1,3-butadiene, PAHs and cadmium and compounds. Motor vehicles are a major source of benzene, 1,3- butadiene, formaldehyde and PAHs with 80 per cent, 76 per cent, 64 per cent and 41 per cent of total emissions from this source respectively. Motor vehicles also contribute significantly to total VOCs, a Particles (PM10) precursor to ozone. Industrial sources contribute significantly to emissions of many air toxics including cadmium and compounds and vinyl chloride. Approximately 3 per cent of benzene emissions, 14 per cent of 1,3-butadiene and 4 per cent of formaldehyde emissions arise from industrial sources across the Port Phillip Control Region. Figure 4 shows the spacial distribution of 1,3-butadiene across the Melbourne metropolitan area. Although levels of 1,3-butadiene are widely distributed, the contribution from industry in the western suburbs is clearly seen. Domestic wood combustion is the major source of particle emissions and also contributes significantly to PAHs, formaldehyde and benzene. The charts showing contributions to PM 10 and PM 2.5 emissions exclude various sources of fugitive emissions, for example, from wind-blown dust, reentrained road dust, sea salt and the extractive industry. These sources are likely to be as significant as the anthropogenic sources shown. Particles (PM2.5) Motor vehicles 17% Other sources 9% Motor vehicles 25% Industry 15% Wood combustion 38% Industry 36% Other sources 15% Wood combustion 45% Carbon monoxide Oxides of nitrogen Motor vehicles 83% Other sources 5% Industry 1% Wood combustion 11% Motor vehicles 63% Other sources 13% Industry 23% Wood combustion 1% Figure 1: Percentage contributions to annual total emissions in the Port Phillip region,

26 Maximum Concentration ( ppb ) NO2 300PTH 321GEE 330GRO GEE Geelong South GRO Grovedale PTH Point Henry Figure 2: Modelled concentrations of nitrogen dioxide (1-hour maximum) in the Geelong region. 11

27 Benzene 1,3-butadiene Motor vehicles 80% Industry 3% Wood combustion 8% Other sources 9% Motor vehicles 76% Industry 14% Other sources 10% Formaldehyde Vinyl Chloride Industry 4% Wood combustion 24% Motor vehicles 64% Other sources 8% Industry 100% PAHs Cadmium and compounds Motor vehicles 41% Other sources 6% Industry <1% Wood combustion 53% Other sources 18% Wood combustion 5% Industry 77% Figure 3: Percentage contributions to annual total emissions in the Port Phillip region,

28 Average Concentration (BTD) (µg m -3 ) 210MTC 230PTC 091FOO 250PAI 040RMI 260BRI 027ALP 280BOX 035DAN ALP Alphington BOX - Box Hill BRI Brighton DAN Dandenong FOO Footscray MTC - Mount Cottrell PAI - Paisley PTC - Point Cook RMI - RMIT (City) Figure 4: Modelled concentrations of 1,3-butadiene (annual average) in the Melbourne region 13

29 2.3 Current Air Quality Regional Air Quality Air quality in Victoria is generally good and has improved significantly during the last 20 years. EPA has been working with industry, local government, the community and other government agencies to achieve this outcome. This effort has led to the significant improvements in air quality observed over that time. Air monitoring data has shown that although air quality in the region has improved significantly during this period there are still occasional breaches of air quality objectives for visibility (fine particles) and ozone. Figures 5 through to 11 illustrate the trends in peak and average concentrations of air pollutants in the Melbourne airshed during the last 20 years. The observed improvement in air quality is mainly due to the introduction of regulatory controls over a wide range of industrial emissions, cleaner motor vehicles and fuels, and controls on backyard burning. More recently, the progressive adoption of cleaner processes and technologies by industry has contributed significantly to these improvements. EPA monitors air pollution in the Port Phillip Region (incorporating Melbourne and Geelong) and the Latrobe Valley on a routine basis. As there are few significant industrial sources outside these areas, monitoring of air quality in Victoria has concentrated in these areas. As part of the obligations under the Ambient Air Quality NEPM, monitoring in other regional centres with populations greater than 25,000 (such as Ballarat and Bendigo) has been undertaken. Analysis of historical monitoring data has revealed that the number of days on which the SEPP (AAQ) air quality objectives have been exceeded has dropped markedly since the early 1980s. In 2000 there were no exceedences of the ozone, CO, NO 2, SO 2 and lead objectives in the Port Phillip Region. However, there were 26 exceedences of the SEPP (AAQ) visibility objective in this region in In addition to monitoring of the common air pollutants, EPA has also conducted monitoring for air toxics. These pollutants are not routinely monitored but monitoring has been conducted on a campaign basis usually in suspected hot spots (for example, near industrial complexes or at roadsides). In general the levels of air toxics in Melbourne are low and are well within international guidelines. Air quality in Geelong has been monitored since the 1970s and is generally good. However, with a large population and industry base it sometimes does not meet the standards expected by the community. In addition, Geelong is in the Port Phillip Region airshed and so can be influenced by Melbourne s air quality under certain meteorological conditions. Air quality in Geelong generally meets the objectives specified in the SEPP (AAQ) except for visibility. The ozone objectives have not been exceeded since

30 Figure 5: Maximum 1hr O3 concentration Port Phillip region Figure 6: Maximum 24-hour PM10 Port Phillip region (ppm) Figure 7: Maximum 1hr NO2 concentration Port Phillip region Figure 8: Maximum 8hr CO concentrations, Port Phillip regions (ppm) ppm

31 Figure 9: Maximum 1-hr and 24-hr SO2 Port Phillip region ppm Melbourne (1 Hour) Geelong (1 Hour) Melb and Geel (24-Hour) ug/m Figure 10: Annual Average lead concentations, Alphington and Collingwood (ppm) Figure 11: Maximum 1hr API value Port Phillip region Alphington Collingwood Max API value SEPP The other region in Victoria where air quality is monitored on a routine basis is the Latrobe Valley. Almost all of Victoria s power generating capacity is located in the Latrobe Valley (about 120km east of Melbourne). A number of other industries are also located in this region. Air quality in the Latrobe Valley, like the Port Phillip Region, has improved significantly during the last 20 years. In general, 16

32 pollution levels are much lower in the Latrobe Valley than in Melbourne. However, high levels of fine particles are experienced during the autumn/winter period due to stable weather conditions and the use of wood heaters for domestic heating, and also during late summer and early autumn due to bush fires and controlled burning conducted for bush fire prevention. Dust from unsealed roads also contributes to particle levels in the area. In 2000 there were 11 exceedences of the SEPP (AAQ) visibility objective. Local Air Quality The quality of air at a local level is determined by the combination of background levels of air pollution and the direct impacts of local emission sources (such as industrial facilities, major roads and domestic activities). Highly localised peaks in pollution may occur over a more gently varying background level of pollution (which may be very low at times when atmospheric conditions are not conducive to the formation or accumulation of regional pollution). The air quality objectives and monitoring protocol of the SEPP (AAQ) have been developed for the purpose of protecting beneficial uses and assessing ambient air quality at the regional level. They acknowledge the temporal and spatial patterns of air pollution that are likely to occur across an airshed or region, once the pollutants emitted from various sources mix, disperse and react in the atmosphere. It is impossible to characterise local air quality in Melbourne and other parts of Victoria with a simple statement or overall assessment, as there are likely to be major differences in the types and severity of impacts in particular localities. Each local area is different by virtue of the type, size and number of emission sources, and the physical features of the area (for example, its land use or topography). It is increasingly clear that communities are taking a much greater interest in the quality of the air in their local area. Now that significant improvements in regional air quality have been achieved in the Port Phillip Region, the focus is shifting towards the improvement of local air quality and the protection of beneficial uses at the local level. There is a need to establish methods for assessing and managing neighbourhood air quality, and to involve local government, communities, industries and other stakeholders cooperatively in this endeavour. Neighbourhood environment improvement plans provide such a mechanism. Global Air Quality Victoria must play its part in addressing issues of global air quality and in particular, in reducing emissions to the atmosphere of greenhouse gases and ozone depleting substances. Australia has one of the highest per capita rates of greenhouse gas emissions in the world. Tackling these emissions requires short, medium and long-term strategies that move Victoria towards a sustainable future. During the past 100 years, human activities particularly the burning of fossil fuels and land clearing have resulted in a steady rise in the level of greenhouse gas emissions. This has significantly increased the atmospheric concentration of these gases, resulting in an enhanced greenhouse effect, that is, more of the sun s heat is trapped, with consequential impacts on global climate systems. In late 1995, the Intergovernmental Panel on Climate 17

33 Change concluded that the balance of evidence suggests a discernible human influence on global climate. World leaders have endorsed this view and agreed that action to reduce greenhouse gas emissions is necessary. Effective management of these emissions is an important environmental priority for Australian Governments, the private sector and communities. The ozone layer forms a protective shield from the harmful effects of incoming ultraviolet radiation. Fluctuations in ozone levels occur as a result of natural processes, however, the release of large quantities of ozone-depleting substances, such as chlorofluorocarbons (CFCs) and halons, to the atmosphere has upset the natural processes that maintain the ozone layer. This has resulted in a general thinning of the ozone layer around the world, including a seasonal extreme over Antarctica each spring. Exposure to increased ultraviolet radiation through ozone-depletion poses a serious threat to human health and the environment. 2.4 Future Air Quality As part of the development of the Air Quality Improvement Plan (AQIP) for the Port Phillip Region, EPA has been undertaking work to project emissions of pollutants in the future and model these emissions to investigate their likely impact on air quality in the region. Projections have been made of the common air pollutants and various air toxics. The projected emissions take into account all significant sources, including motor vehicles, industry, wood heating, other transport sources (air, sea and rail transport), domestic sources (other than wood heating), and commercial sources (for example, service stations and dry cleaning). This work on projections and modelling of future air quality is still being reviewed as part of the finalisation of the AQIP for the Port Phillip Region. There are a number of trends working for and against better air quality in the Port Phillip Region. Victoria is active in the development of a number of national initiatives, such as the introduction of tighter emission controls on motor vehicles and new fuel standards, which will significantly reduce the emissions of pollutants from individual vehicles. The predicted growth in the number of vehicles on the road and increases in total vehicle kilometres travelled will work to offset these reductions. Similarly, significant improvements have been made in the emissions performance of a variety of industry sectors during the last few decades. This, combined with the contraction in some industry sectors, is working to reduce emissions overall from industry. Some industry sectors are growing in size and emissions in these areas may be increasing due to this growth. This is working to increase the overall level of emissions of some pollutants from industry and offset improvements seen in the performance of individual companies. This tension between improved emissions performance from a variety of sources, largely due to developments in technology and processes, and increasing emissions, largely due to greater economic activity and increasing population, is one of the main reasons why Victoria needs a modern, comprehensive and flexible statutory policy framework for managing emissions into the air environment. 18

34 3 POLICY OPTIONS EPA considered three possible policy options for protecting the air environment of Victoria. All three options were judged against their ability to meet the policy aims and are outlined in detail below. The three approaches considered were: Option 1: do nothing; Option 2: maintain the current policy structure but revise the schedules to the SEPP (Air Quality Management); or Option 3: vary the two policies. 3.1 Option 1: Do nothing This option would mean that the existing arrangements for protecting the air environment would continue with no changes being made to the statutory framework. The effect of the do nothing option is that the SEPP (Air Quality Management) and SEPP (Ambient Air Quality) would continue in their existing form with no variation. The do nothing option is not preferred as it fails to provide a mechanism to address the current environment protection needs of the air environment and the expectations of the community. Without an updated statutory framework for managing emissions from industrial and diffuse sources of pollution to the air environment, the environmental quality objectives of SEPP (Ambient Air Quality) are unlikely to be met. This would result in Victoria having great difficulty meeting its obligations under the National Environment Protection Measure for Ambient Air Quality. As this option relies on a status quo approach, it would not drive continuous improvement in air quality. Developments that have occurred over the past two decades in environmental management systems and practices would not be reflected. Current priorities and practices in air quality management, the latest scientific findings (particularly in relation to the health impacts of pollutants), technical capabilities and technological advances of relevance to air quality management could not be properly addressed or considered. This option would also fail to meet the community s aspiration for a statutory framework that aims to achieve the cleanest air possible in a manner that complements other social and economic aspirations. This option would also result in a policy framework that would be unable to respond to environmental issues of international or national importance. Without integrated consideration of greenhouse gases into general emissions management, Victorian and national measures to address the enhanced greenhouse effect would be undermined. 3.2 Option 2: Maintain the current policy structure but revise the schedules to the SEPP (Air Quality Management) Option 2 involves no variation to the SEPP (Ambient Air Quality) and minor changes being made to the SEPP (Air Quality Management) to reflect recent scientific and technical developments. Changes could include the incorporation of developments in air pollution modelling, new scientific information 19

35 on the impacts of air toxics and recent progress in environmental research. This option would bring the environmental framework up to date with technical and scientific advances. The key drawback of this option is that it does not take into consideration major developments in environmental management policy, principles and approaches during the past two decades, both in Australia and internationally. Firstly, revising the schedules to the policy would not enable environmental issues of international or national importance to be reflected. Without integrated consideration of greenhouse gases into general emissions management, Victorian and national measures to address the enhanced greenhouse effect would be undermined. This option would result in the schedules being updated in line with technical and scientific advances. However, as the overall framework for managing emissions contained in the body of the policy would not be updated, the benefits of just updating the schedules are limited. While this option could potentially provide a mechanism for driving continuous improvement for point source emissions from industry, the schedules do not deal with emissions from diffuse sources. Therefore, Victoria s obligations under the NEPM would still be difficult to achieve, as the revisions to the policy framework would only be aimed at industrial sources rather than a comprehensive framework dealing with emissions from all major sources of air pollution, including motor vehicles, domestic solid fuel heating and burning in the open. Without an updated framework addressing all sources of emissions, the community s aspirations for the cleanest air possible, having regard to the social and economic development of the State, could not be met. This option is not preferred as it could not reflect changes in environmental management practices and approaches, particularly with regard to the management of mobile, domestic and other diffuse sources, as well as point sources. 3.3 Option 3: Vary the policies preferred option Option 3 is the preferred option, and has been pursued in the development of the SEPP (Air Quality Management), SEPP (Ambient Air Quality) and PIA. This option allows for the development of a modern and flexible policy framework for the improvement of the air environment. It involves varying the SEPP (Air Quality Management) to incorporate recent developments in environmental management and scientific and technical developments. It also involves varying the vegetation protection indicators in the SEPP (Ambient Air Quality). Varying the policies is preferred as it would meet all the policy aims. In summary this option would: reflect changes in approaches to environmental management practice, including placing greater emphasis on managing mobile, dome stic and other diffuse sources, as well as point sources; enable the philosophy of continuous improvement to be adopted and fostered in all aspects of air quality management; include issues of global significance such as the management of greenhouse gas emissions and ozone-depleting substances; 20

36 incorporate new techniques to assess the impact of emissions such as the use of risk assessment; and respond to new technical and scientific information on air quality, and new approaches to the management of air pollutants reflecting increased knowledge of their potential impacts on the beneficial use of the environment identified in the policy. This option (including a discussion of impacts) is discussed in more detail in Chapters 4 and Impacts of each of the alternative options The benefits and costs of each of the alternatives have been assessed and are outlined below. The benefits and costs of the preferred approach are outlined in detail in Chapter 4. Option 1: Do Nothing As this option would retain the existing policies to protect the air environment of Victoria, a statutory framework would still be in place. There would be no change to the requirements for the management of emissions. The existing policy framework focuses on the management of industrial pollution and air quality at a regional level, with limited focus on diffuse sources. While industrial pollution still needs to be addressed, mobile and diffuse sources of pollution, such as motor vehicles and wood combustion for domestic heating, make a significant and increasing contribution to air pollution in Victoria particularly in the Port Phillip air shed. Without a revised policy, it is unlikely that air quality would continue to improve. Rather, without changes to the statutory framework, the increasing pressures on the air environment from a growing economy and population may lead to deterioration in Victoria s air quality. Localised air quality issues would continue to place human health and ecosystems at risk. While industry s environmental performance has improved since the 1981 SEPP (The Air Environment) framework was established, new scientific and technical information and management approaches mean that continual improvements in environmental management can be made by industry. Modern environmental management practices have shifted from end-of-pipe solutions to avoiding wastes generated in the first place by examining production processes and resource inputs for efficiency gains. The policy framework needs to be updated to reflect new information and encourage modern management practices in industry to achieve continuous improvement. Under the do nothing option emission control practices that rely on costly end-of-pipe technology would continue to be promoted, resulting in negative impacts for industry and the environment, such as more costly solutions to emission control, greater resource usage and greater waste generation. Some industries are already applying modern approaches to emissions management, such as the principles of product stewardship and shared responsibility, and achieving benefits for their triple bottom line (that is, their economic, social and environmental bottom line). Under this option, industries that are not currently employing best practices in the management of their emissions and other wastes may receive a short-term benefit, as there would be limited environmental improvements required and therefore minimal associated costs. 21

37 These benefits could give industries a short-term competitive edge against more sustainable industries that are currently involved in initiatives to improve their environmental performance. The short-term economic advantages, however, would be offset by long-term losses due to declining air quality and the associated adverse impacts to community health and amenity. A number of air pollutants require more stringent management than other air pollutants as they are recognised as carcinogens, mutagens, teratogens, highly toxic or highly persistent. Exposure to these pollutants may cause significant health effects. New scientific information regarding the pollutants that fit into this category has become available since the 1981 SEPP was developed. Under the do nothing option, it would not be possible to incorporate this new information and required ma nagement, resulting in a potentially significant cost to community health. Since the 1981 SEPP (The Air Environment) was put in place, there has been an increased need to address emissions with a global impact, such as greenhouse gases and ozone depleting substances. These substances are not managed by the existing policies. The threat of climate change and the depletion of the ozone layer are serious challenges facing the world community. As all countries and communities are vulnerable to climate change and the impacts of the depletion of the ozone layer, the Victorian community needs to play its part in reducing greenhouse emissions and the use of ozone-depleting substances. Under the do nothing option, there would be no opportunity to incorporate requirements for industry to manage these pollutants. Actions to reduce emissions of these greenhouse gases would not be integrated with action to reduce emissions of other pollutants. Predicted average savings in CO 2 emissions and other improvements (such as reductions of inputs) associated with improvements in energy efficiency would not eventuate. In addition, continuing to not require management of these pollutants could also have a negative impact on Victoria s reputation both nationally and internationally. Option 2: Maintain the current policy structure but revise the schedules to the SEPP (Air Quality Management) Incorporating new information on air pollutants and other technical information, such as approaches to modelling through a revision of the schedules to SEPP (Air Quality Management), would provide benefits by improving air quality and reducing the risk of exposure to the toxic air pollutants. This option would also provide some degree of protection of human health. This option, however, would mean that new approaches and principles of environmental management would not be reflected in the statutory framework. The policy would have current scientific information in an outdated framework, encouraging costly end-of-pipe emission control methods for more stringent requirements. There would also be no increased focus on the management of mobile and diffuse sources of air pollution and neighbourhood air quality. There would be significant negative impacts associated with this option, such as limited management of mobile and diffuse sources resulting in an ongoing decline in local and regional air quality, and greater use of resources as there 22

38 would be no encouragement to examine processes for efficiency improvements that decrease emissions. There would be limited benefits associated with this option, such as reduced risk of exposure to air toxics from some new sources. As with the first option, there would be no opportunity through a revision of the schedules to incorporate requirements for industry to address emissions with a global impact. This could lead to Victoria being viewed nationally and internationally as a State that is not prepared to play its part in addressing global issues. Actions to reduce emissions of these greenhouse gases would not be integrated with action to reduce emissions of other pollutants. Predicted average savings in CO 2 emissions and other improvements (such as reductions of inputs) associated with improvements in energy efficiency would not eventuate. Costs associated from the recognition of global issues would be avoided. However, these costs would be significantly outweighed by the costs associated with not introducing these provisions. For example, efficiency gains at the design stage may not be picked up leading to increased energy consumption and greenhouse emissions. 23

39 4 POLICY CHANGES AND ASSESSMENT OF POLICY IMPACTS The purpose of this chapter is to explain the clauses in the variations to SEPP (Air Quality Management) and SEPP (Ambient Air Quality) and provide an assessment of the impacts of those clauses. The clauses of the policy are listed in order and a discussion of each clause and its impacts are provided as part of that discussion. The exception to this is Clauses 18 to 23 of SEPP (Air Quality Management), which set out the general and specific emissions management requirements as they apply to industry. To provide a more comprehensive picture of how the policy will apply to industry and enable a more thorough appraisal of the overall impact, the discussion and assessment of these clauses has been drawn together and linked to other aspects of the policy variation to SEPP (Air Quality Management). a preamble which explains the foundations and purpose of the draft policy, and what it seeks to achieve; an introductory section which provides the policy s formal title, mechanisms for commencement and revocation of the previous policy and amendments, scope of application and list of contents; Part I which contains the aims, principles and intent of the policy, and the beneficial uses that are to be protected; Part II which defines the policy s environmental indicators and environmental quality objectives; Part III, the attainment program, which includes: (a) a description of policy responsibilities, implementation measures and accountability; (b) instruments and measures that are proposed for policy implementation; Summaries of the key issues associated with clauses that form part of the same general sections of the policy variation are also provided. 4.1 State Environment Protection Policy (Air Quality Management) Structure of the SEPP (AQM) Given the number and scope of changes, the SEPP (AQM) has been varied so that it replaces the existing policy in its entirety, rather than amending it in a large number of places. (c) (d) (e) requirements for the management and monitoring of emissions, including requirements for special circumstances; provisions for the monitoring of, and research into, air quality, and planning for air quality emergencies; and approaches to the management of local and regional air quality, global issues, vehicle emissions and open and solid fuel burning; The structure of the varied SEPP (AQM) is as follows: Part IV, which contains definitions of terms used in the draft policy; and explanatory notes for the policy 24

40 Assessment of the Impacts of the Policy Clauses INTRODUCTORY CLAUSES Clause 1: Title Clause 1 names the policy. Clause 2: Commencement Clause 2 provides the usual mechanism for its commencement by publication in the Government Gazette, following declaration by Governor in Council. Clause 4: Application of the Policy Clause 4 establishes the segment of the environment to which the policy applies, which is the outdoor air environment. The policy does not apply to the air inside buildings and other structures. The clause also broadens the application of the policy to include emissions of greenhouse gases and ozone-depleting substances. Clause 5: Contents of the Policy Clause 5 lists the contents of the policy. Clause 3: Revocation of Redundant State Environment Protection Policy Clause 3 revokes the previous State environment protection policy (Air Quality Management) and amendments. Key Points: Clauses 1 to 5 establish the fundamental provisions for creating the policy and provide a clear introduction. Clause 4 defines the segment of the environment to which the policy applies and limits action to manage emissions to the outdoor air environment. However, an important benefit arising from the policy is that action to improve outdoor air quality may also result in indoor air quality improving. The air outside buildings and structures invariably passes inside and as such determines indoor air quality to some extent. The impacts of policy provisions for managing emissions of greenhouse gases and ozone-depleting substances foreshadowed in Clause 4 are discussed in detail under the clauses specifically dealing with these issues - Clauses 33 and 34. PART I POLICY FRAMEWORK Clause 6: Policy Aims Clause 6 defines the aims of the policy. The first aim of the policy is to ensure that the environmental quality objectives of the State environment protection policy (Ambient Air Quality) are met. SEPP (Ambient Air Quality) contains the provisions of the National Environment Protection Measure for Ambient Air Quality (Air NEPM), which was made in June 1998 by the National Environment Protection Council. The Air NEPM is binding on Victoria and was formally adopted as part of Victoria s SEPP framework in February Victoria 25

41 must report annually on its performance against the provisions of the Air NEPM. SEPP (Air Quality Management) establishes the framework for managing emissions to the air environment in Victoria, and as such is a fundamental tool for ensuring Victoria meets is obligations under the Air NEPM. The second aim of the policy is to drive continuous improvement in air quality and achieve the cleanest air possible having regard to the social and economic development of Victoria. Air quality is consistently rated as an important (or even the most important) environmental issue by Australians. The policy establishes the framework for meeting the air quality aspirations of Victorians, while accommodating the other social and economic aspirations of Victorians. The third aim of the policy is to support Victorian and national measures to address the enhanced greenhouse effect and depletion of the ozone layer. The policy is an integral part of Victoria s Greenhouse Strategy (VGS), and will contribute significantly to addressing the enhanced greenhouse effect by integrating consideration of energy efficiency and the reduction of emissions of greenhouse gases into general emissions management through the EPA works approval process. Clause 7: Policy Principles Clause 7 sets out the principles on which policy development and implementation are to be based. These principles are the same as those in the Environment Protection Act 1970, which were introduced through the Environment Protection (Liveable Neighbourhoods) Act The incorporation of these principles in the policy reflects national agreements and important shifts and developments in environmental management in recent years. The principles guide everything done in accordance with the Act. These sustainability principles are drafted to be specific to environment protection aims. They reflect the community's expectation of a safe and healthy environment for Victoria. The principles are: integration of economic, social and environmental considerations; precautionary principle; intergenerational equity; conservation of biological diversity and ecological integrity; improved valuation, pricing and incentive mechanisms; shared responsibility; product stewardship; wastes hierarchy; integrated environmental management; accountability; and enforcement. A number of these principles evolved from international agreements, such as the 1992 Rio Declaration of Environment and Development. Additionally, these principles have been drawn from a number of influential sources, including the 1992 Inter-Governmental Agreement on the Environment, the National Strategy for Ecologically Sustainable 26

42 Development, the National Packaging Covenant, and Industrial Waste Strategy of The principle of integration of economic, social and environmental considerations is consistent with integrating the triple bottom line approach into decision making. The triple bottom line modifies traditional accounting measurement, by including financial, environment and social costs. The precautionary principle states that in cases where there is a serious or irreversible environmental threat, the lack of scientific certainty should not be used as a reason to postpone measures to prevent environmental damage. The second component of the principle provides practical guidance as to its application, and essentially requires that a risk management approach be applied in cases where there is risk of serious or irreversible damage. The principle of intergenerational equity reflects the view that we, as the present generation, have the duty to ensure that the environment is maintained and enhanced for our children, and our children's children. The principle of conservation of biological diversity and ecological integrity recognises that biodiversity conservation is fundamental to our survival, and as such, should be a fundamental consideration when EPA makes a decision under the Environment Protection Act and State environment protection policies. The principle of improved valuation, pricing and incentive mechanisms encompasses issues such as polluter-pays principles, pricing based on life-cycle assessments, and market mechanisms for environment protection. The principle of shared responsibility has been drawn from the National Packaging Covenant and recognises that everybody has a role in the protection of the environment. The responsibility for managing air quality is shared by all levels of government, business and industry, and groups and individuals. This principle also encourages the production of competitively priced goods and services to meet human needs while progressively reducing the environmental impact to ensure sustainability - an objective sometimes referred to as 'eco-efficiency'. Eco-efficiency requires that goods and services are produced in a manner that progressively reduces the resources consumed and waste generated throughout their life cycle and minimises the associated environmental and ecological impacts. This concept flows from the recognition that economic, social and environmental goals are interrelated and should be pursued in an integrated manner to maximise the overall benefits to society. It reflects the related principle that decision making should integrate economic and environmental factors. It also seeks to maximise efficiency in the production of goods and services to satisfy human needs and pursue ecologically sustainable development. The principle of product stewardship, also from the National Packaging Covenant, commits producers and users of goods and services (and those who manage their associated wastes) to work with Government to manage the environmental impact of those goods and services throughout their whole life cycle, including waste disposal. In other words, this 27

43 principle encompasses cradle to grave approaches to environment protection. The National Packaging Covenant has established a high standard of product stewardship in Australia for manufacturers of packaging and packaged products. The covenant requires full consideration of the waste generating potential of products throughout their life cycle, from product conception and design to their ultimate disposal. The life cycle assessment for a product should consider product design, production processes, resource and material inputs, the useful life of the product, and the management of wastes at each stage of the cycle. Opportunities to minimise environmental impacts may be lost if the focus of environmental management is restricted to the end use or ultimate fate of a product, at which stage avoidable impacts may have already occurred or may be more difficult to prevent. The principle of the wastes hierarchy has been drawn from two of Victoria's influential waste management strategies the 1986 'Industrial Waste Strategy' and the 1998 'Zeroing in on Waste Strategy'. This principle outlines the order in which wastes should be managed, with avoidance being the most preferred option and disposal the least preferred option. The use of the wastes hierarchy for environmental management, with its preference for waste avoidance and minimisation over waste treatment and disposal, is now widely practiced in Australia. It provides the fundamental philosophy and outlook which drives cleaner production programs and practices. The principle of integrated environmental management provides a clear statement of the acceptance of the general trend towards integration in environmental decision making. In other words, it prevents the transfer of problems from one environmental medium (for example, the air environment) to another environmental medium (for example, the water environment). The principle of accountability recognises that the community s aspirations for air quality are a significant force driving environmental policies and programs. For these aspirations, and the mechanisms that express them, to work effectively, governments have an ongoing role to provide ready public access to useful and reliable information, use open and transparent processes for policy and program development, and maintain good communications and a constructive dialogue with the community on air quality matters. The principle of enforcement reflects the wellestablished principles of criminal law. A key component of this principle is to ensure that there is adequate deterrence provisions to ensure that those who do not comply with environmental requirements do not obtain a competitive advantage over those who comply with these requirements. The enforcement principle is also in line with EPA's Enforcement Policy. It is appropriate to state these principles in the policy to reinforce their importance in decision making. Incorporating the principles in the policy also assists people to understand the provisions that make reference to the principles, in particular clause 18(3)(a), which states that generators of 28

44 emissions must manage their activities and emissions in accordance with these principles. Submissions supporting the usefulness of including the policy principles were received. One comment received was: Stating the guiding principles up front in the document is a good approach. the aims and principles of the policy on the one hand and the attainment program on the other. The policy intent assists in understanding and interpreting the overall intention of the policy. Clause 8: Policy Intent Clause 8 explains the intentions of the policy. It provides, in a short series of statements, an overview of Victoria s policy with respect to air quality management. It also provides a link between Key Points: The aims of the policy (Clause 6) will be pursued through the attainment program. Implementation of the policy will be fundamental to meeting Victoria s goals and objectives under the State environment protection policy (Ambient Air Quality), which is one of the policy aims. Implementation of the policy will also meet the other policy aims of providing the clean air Victorians seek, having regard to the community s other social and economic aspirations, and assisting Victoria, as part of the Victorian Greenhouse Strategy, to play its part in addressing the enhanced greenhouse effect. Implementation of the attainment program will invoke application of the principles built into the Environment Protection Act 1970 and the impacts of this are discussed below in relation to various clauses. Listing the policy principles in the policy will assist generators of emissions to implement the policy. The policy intent (Clause 8) will assist users of the policy to understand and interpret the overall intention of the policy. Clause 9: Beneficial Uses Clause 9 lists the beneficial uses that the policy seeks to protect. The beneficial uses specified in the SEPP (AQM) reflect those in the SEPP (AAQ) and in the former SEPP (AQM) with two exceptions. The beneficial uses have been expanded to reflect the policy principles, including integrated environmental management, and the management of global issues in the SEPP (AQM). The two additions are: Clause 9(1)(f) defines an additional beneficial use for the SEPP (AQM), which is the maintenance of climate systems that are consistent with human development and wellbeing and the protection of ecosystems and biodiversity; and 29

45 Clause 9(2) recognises that some air pollutants impact on other segments of the environment. Clause 9(1)(f) recognises the importance of managing greenhouse gas emissions so that the earth s climate systems are protected. This beneficial use provides the policy foundation for proposals specified in the SEPP (AQM) and incorporated PEM. Clause 9(2) recognises potential impacts of air pollution on other segments of the environment, for example, absorption of oxides of nitrogen by surface waters which may threaten the beneficial uses of water bodies, as identified in other SEPPs. Reductions in emissions of these compounds can therefore reduce nutrient levels in Port Phillip Bay and Western Port, which will assist in meeting the environmental quality objectives for these significant bodies of water. This phenomenon has been modelled for Port Phillip Bay. If and when action in relation to air emissions is required, it will be expressed through regional air quality management provisions of the policy, such as Port Phillip Region Air Quality Improvement Plan. Feedback from consultation on the draft SEPP (AQM) showed support for the specified beneficial uses. In particular, there was support for inclusion of Clause 9(1)(f). The key set of benefits that will flow from the SEPP in relation to the beneficial uses are health benefits. The SEPP plays a strong role in driving improvements in air quality, but other factors contribute as well (for examples see the section on industry practices). Similarly, poor air quality is only one factor that contributes to the incidence of various diseases. Air pollution is known to have adverse effects on human health. Epidemiological studies world wide have shown that exposure to the common air pollutants is associated with increases in premature deaths, hospital admissions and emergency room visits for respiratory and cardiovascular disease, exacerbation of asthma and increases in respiratory symptoms such as cough and wheeze. For some of the Class 3 indicators in the Policy, such as benzene, exposure may also be related to increases in cancer. The health effects associated with the common pollutants are observed at air pollution levels currently experienced in Melbourne and some regional centres in Victoria. In addition to the direct health costs associated with these health effects, there are also costs associated with lost productivity, not only for the person affected but in many circumstances also for that affected person s carer. This is especially true in the case of children who form a susceptible group for the effects of air pollution. There are groups within the population that are more sensitive to the effects of air pollution. These groups include the elderly, people with existing disease (respiratory and cardiovascular), asthmatics and children. Legislation has been passed in the United States that acknowledges children as a susceptible group to the effects of air pollution. This legislation ensures that air quality standards are maintained to protect children s health. In Australia we experience the second highest asthma rates in the world with approximately 12 per cent of the population suffering from this disease. In children less than five years of age this figure increases to approximately 25 to 30 per cent. 30

46 According to ABS data, approximately 44 per cent of non-accidental deaths are due to cardiovascular causes and 80 per cent occur in people greater than 65 years of age. Data from the Department of Human Services indicates that there are approximately 7,000 admissions per year to Melbourne hospitals for asthma, 60 per cent of which are for children less than 14 years. There are 31,000 admissions per year for cardiovascular disease, 66 per cent of those occur in the elderly. For respiratory disease there are 24,000 admissions per year 30 per cent occur in children less than 14 years of age and 36 per cent occur in the elderly. Although air pollution does not cause these diseases, exposure to air pollution can aggravate these diseases and significantly impact on the quality of life experienced by these groups. In some cases, exposure to air pollution may result in premature deaths in these sensitive groups. EPA has recently conducted, in collaboration with Griffith University and the University of Queensland, two studies investigating the health effects of air pollution in Melbourne. The Melbourne Mortality Study found that at current air pollution levels there are approximately 300 premature deaths a year attributable to common air pollutants. A more recent study investigating the effects of air pollution on hospital admissions for cardiovascular and respiratory disease found that approximately 1,000 admissions per year to Melbourne hospitals can be attributed to air pollution. Recent work from the World Health Organisation (WHO) indicates that these types of studies underestimate the potential number of adverse health outcomes. Data provided by the Department of Human Services indicates that these admissions alone cost Victorians and the health system in the order of $6 million per year. The costs associated with lost productivity are likely to be much greater. This estimate does not include ongoing medical costs such as medication costs and visits to general practitioners. A recent WHO study has found that air pollution in Austria, Switzerland and France cost those countries approximately 50 million Euro per year, approximately AUD $100 million. Of this total cost approximately 22 per cent is due to restricted activity days and productivity loss. Reductions in air pollution are required to offset the health costs incurred as a result of air pollution. Since the implementation of the 1981 SEPP (The Air Environment) there has been a significant improvement in Melbourne s air quality. The revised SEPP (AQM) provides a modern and flexible framework to ensure that such improvements continue to occur and that health impacts of air pollution and associated costs decrease. There are no direct impacts from inclusion of these beneficial uses in the SEPP (AQM). Impacts arising from specific provisions in the policy designed to protect the beneficial uses are discussed in relation to those specific provisions below. 31

47 Key Points: The key set of benefits that will flow from the SEPP in relation to the beneficial uses are health benefits. The SEPP plays a strong role in driving improvements in air quality, but other factors contribute as well. Similarly, poor air quality is only one factor that contributes to the incidence of various diseases. Improvements in air quality will have a range of benefits related to improved health in the community. Clause 9(1) recognises the importance of managing greenhouse gas emissions so that the earth s climate systems are protected. This beneficial use provides the policy foundation for proposals in the attainment program to manage greenhouse gas emissions. The potential impacts of these proposals are discussed in relation to the relevant clauses below. Clause 9(2) recognises the potential impacts air pollutants may have on other segments of the environment. PART II ENVIRONMENTAL INDICATORS & ENVIRONMENTAL QUALITY OBJECTIVES Clause 10: Air Quality Indicators Classification of Air Quality Indicators Management and protection of the air environment requires identification of pollutants that are to be controlled to ensure that the beneficial uses of the policy are protected. Clause 10 provides for the classification of air pollutants of concern in Victoria as Class 1, 2 or 3 air quality indicators. It also provides for the establishment of design criteria (previously called design ground level concentrations ) to assess proposals for new or expanded sources of emissions to the air environment and for intervention levels to assess local and neighbourhood air quality. This clause also defines an unclassified group of indicators that impact on amenity and aesthetic enjoyment of the air environment. There is no substantive change to these provisions from those in the previous SEPP (AQM), apart from recognising indicators of amenity impacts and the establishment of intervention levels. As discussed in Chapter 2 a wide range of pollutants are emitted into the air environment in Victoria. The pollutants vary widely in terms of their toxicity and therefore their potentia l to impact on the beneficial uses of the air environment. To ensure that appropriate management approaches are implemented to account for these differences it is important to classify pollutants into specific categories. The SEPP (AQM) classifies the indicators identified into Class 1, 2 and 3 indicators. A background paper ( Indicators for Air Quality Management and Criteria for Assessment (publication 743)), was released with the draft SEPP (AQM) and PIA. The background paper outlined a number of changes to the existing list of Class 1, 2 and 3 indicators that were made based on the current understanding into the health impacts of these pollutants. The most significant change centred on the Class 3 indicators. Based on the classification of carcinogens by the IARC (International Agency for Research into Cancer)and 32

48 USEPA and the identification of new pollutants of concern in Victoria, the number of Class 3 indicators increased from 8 in the former SEPP (AQM) to 26. This change has a potential impact on industry in Victoria as Class 3 indicators require a higher level of emissions management due to the hazardous nature of these substances. Emissions of Class 3 indicators require control to the Maximum Extent Achievable (MEA) and the implications of this for industry is discussed in relation to Clause 20. Throughout consultation there was general support for the approach taken to classify the indicators and for the proposed list of substances, with one notable exception formaldehyde. Companies associated with the production of formaldehyde, formaldehyde-based resins and the wood panel industry have indicated that formaldehyde should not be reclassified from a Class 2 to Class 3 indicator. Specifically, the companies believe that recent evidence suggests that formaldehyde only has irritant properties at levels experienced in ambient air and that the carcinogenic properties only occur at much higher levels and as a consequence of irritation of the nasal mucosa. The companies tendered information in reports that they believed supported their contention. EPA has reviewed the information provided by the companies, the information on which it based its original re-classification and additional information from international environment protection agencies. The National Industrial Chemicals Notification and Assessment Scheme (NICNAS) has recently initiated a review of formaldehyde. In addition, the USEPA National Centre for Environmental Assessment is also conducting a review of formaldehyde. EPA has decided to retain formaldehyde as a Class 2 indicator in the policy and will reassess its classification once the NICNAS and USEPA reviews are completed. The wood panel industry and its resin suppliers are working towards further minimisation of emissions in response to market demand for low formaldehyde content in finished product, such as medium density fibreboard and particleboard. This approach is a clear application of the wastes hierarchy. The amount of formaldehyde used in wood panel products has been reduced significantly during the last decade. Many of the Class 2 indicators are highly odorous. Emissions of these pollutants impact on people s amenity at concentrations lower than that for which their toxicity is of concern. In the previous SEPP (AQM), no distinction was made between these pollutants and the Class 2 indicators based on toxicity. During consultation on the draft SEPP (AQM) there was significant support to separate the odorous Class 2 indicators from the toxicity based indicators. The final SEPP (AQM) has been amended to reflect this distinction and odorous Class 2 indicators are now referred to as Class 2 odorous indicators. The toxicity-based Class 2 indicators are referred to as Class 2 toxicity indicators. This change to the classification of odorous substances will not impact on industry. 33

49 Development of Design Criteria and Intervention Levels Design Criteria In the 1981 SEPP (The Air Environment) the design ground level concentrations (dglc) used for assessment of new or expanded sources of emissions to the environment, were derived by dividing the Occupational Health and Safety Time Weighted Average (TWA) by a safety factor of 30. This procedure resulted in a 3-min dglc that was used with EPA s regulatory dispersion model in the assessment of Works Approval applications. This approach provided a convenient method for deriving the dglc s and resulted in a conservative tool for the assessment of emissions from individual sites. Dglc s have, however, been misapplied over the years. As well as being used as a modelling tool they have been used as defacto air quality objectives for the assessment of monitoring data a use that is inappropriate. In the development of the SEPP (AQM) the term dglc was renamed design criteria to better reflect its purpose. The approach to the development of the design criteria, namely the use of the TWA divided by a safety factor, has been retained. This approach has been generally well received through consultation. In the draft SEPP (AQM) it was proposed to change the averaging time of the design criteria to 1-hour. Concern was raised by some industries about doing this. In discussions with PACIA it was agreed that the 3-minute averaging time would be retained in the final Policy. The design criteria have been derived from the current Worksafe Australia 8-hour TWA values. Intervention Levels The SEPP (AQM) also defines intervention levels for a selected group of air quality indicators. Intervention levels have been developed specifically for the purpose of assessing monitoring data on local air quality in relation to the protection of beneficial uses of the environment. These intervention levels are set out in Schedule B. Intervention levels are numerically greater than design criteria, as they take into account all sources of a pollutant in a given area, and are based on the protection of human health. Intervention levels differ from design criteria in their nature and application. Intervention levels will be used to assess actual measurements of local air quality. On the other hand, design criteria are intended only for use in modelling the dispersion of emissions from specific sources and should not be used separately from the modelling process, with its in-built limitations, assumptions and safety factors. Measurements of local air quality should not be compared with the results of dispersion modelling, or vice versa. The design approach for emission sources is a predictive procedure, and is meant to provide assurance that the actual impacts of particular sources will be comfortably within acceptable levels. Intervention levels have been developed for a selected group of air quality indicators with a variety of sources that could be an issue at a local level. The development of these proposed intervention levels has taken the health risks associated with these indicators into account. On the other hand, intervention criteria for amenity would usually be specifically tailored to the task of assessing 34

50 nuisance or aesthetic impacts in particular neighbourhood situations. It is important to emphasise that intervention levels should be used in situations where the cumulative impact of a variety of sources of a pollutant is being investigated. They should not be used to assess the emissions arising from a single source, such as emissions of a specific air pollutant from an industrial premises, or dust from individual farms. The approaches used to derive the intervention levels were outlined in the background paper on indicators released with the draft SEPP (AQM). There was general support through consultation for the approaches outlined and no changes have been made in the final SEPP (AQM). design criteria or intervention levels as soon as practicable. EPA will review the information on which the design criteria and intervention levels are based on a minimum of a five-year cycle. Clause 11: Ambient Air Quality Objectives Clause 11 identifies the environmental quality objectives for the protection of ambient air quality. This clause was not included in the draft SEPP (AQM) but was added to ensure, in accordance with section 18(1)(d) of the Environment Protection Act 1970, that the environmental quality objectives of the policy are clear. Addition of this clause will not have any impacts beyond those associated with implementation of the SEPP (Ambient Air Quality). New Design Criteria or Intervention Levels If a pollutant is identified that is not classified, design criteria and intervention levels (if relevant) will be developed on a case by case basis. EPA may also need to develop criteria on a case by case basis for other reasons. For example, if it is decided that monitoring is required to supplement the emissions management requirements in a licence for a premises over which there is concern about the impact of emissions off-site, relevant criteria for the assessment of such data will need to be derived. In such situations the criteria will be developed in consultation with relevant stakeholders, including the premises in question, the community and the public health authority. The information on which design criteria and intervention levels are based, including the occupational health and safety TWA values, may change from time to time. When significant changes in this information takes place, EPA will revise the 35

51 Key Points: Clauses 10 establishes the mechanism for classifying pollutants. Clause 11 establishes the environmental quality objectives for the policy, which are the objectives of SEPP (Ambient Air Quality). No direct impacts arise from the provisions in Clauses 10 and 11 to classify air quality indicators and establish design criteria, intervention criteria (including intervention levels) and environmental quality objectives. These provisions are essentially the same as those in the previous SEPP (AQM). The impacts of proposed changes to the actual classifications and design criteria for specific air pollutants are discussed below in relation to the attainment program, and its requirements for emissions and air quality management. PART III ATTAINMENT PROGRAM Policy Responsibilities Clauses 12 to 14 address the policy responsibilities and commitments of EPA, and describe the current mechanisms and arrangements that determine or influence the development of policy for air quality management in Victoria. Clause 12: Development of National Measures Clause 12 acknowledges the recent establishment of improved arrangements for developing national policies and approaches to environmental management in Australia, and the need to consult with the community and other stakeholders about the development and implementation of national measures, policies and strategies. The clause requires EPA to engage in these national processes and consult widely on the initiatives that arise as a result of them. In the context of air quality management, two national arrangements stand out as significant: National Environment Protection Council The National Environment Protection Council (NEPC) was established to set national environmental goals and standards for Australia, through National Environment Protection Measures (NEPMs). The objectives of the NEPC are to ensure that: the people of Australia enjoy the benefits of equivalent protection from air, water or soil pollution and from noise, wherever they live; and decisions of the business community are not distorted, and markets not fragmented, by variations between governments in relation to the adoption or implementation of major environment protection measures. NEPMs are broad framework-setting statutory instruments, defined in the National Environment Protection Council Act 1994, which outline agreed national objectives for protecting or managing particular aspects of the environment. They are, to all intents and purposes, the national equivalent of State environment protection policies, and may consist of any combination of goals, standards, 36

52 protocols and guidelines. In relation to air quality the NEPC Act prescribes that NEPMs may relate to ambient air quality or motor vehicle emissions. The NEPM for the National Pollutant Inventory is also relevant to air quality management. Once made by the NEPC, a NEPM becomes law in each participating jurisdiction (State or Territory), unless it is disallowed by either House of the Commonwealth Parliament. Implementation of NEPMs is the responsibility of individual jurisdictions. The Ambient Air Quality NEPM adopted in June 1998 established ambient air quality objectives for six common air pollutants: carbon monoxide, nitrogen dioxide, photochemical oxidants (as ozone), sulfur dioxide, lead and particles as PM 10 (less than 10 micrometres in aerodynamic diameter). The standards were developed with the intention of protecting the health of all Australians. The Ambient Air Quality NEPM is binding in Victoria, and was formally adopted as part of Victoria s SEPP framework through the SEPP (Ambient Air Quality) development in February Clause 12 acknowledges the importance of the cooperative development of national measures and strategies for environment protection, and the guidance that they provide for Victorian strategies, plans and programs. Motor Vehicle Environment Committee The Motor Vehicle Environment Committee (MVEC) was established by the NEPC and National Road Transport Commission (NRTC) to coordinate and implement a joint work program on vehicle-related environmental issues, including the development of new vehicle emission and noise standards. The objectives of MVEC are to minimise the impact of motor vehicles on the environment by: ensuring continual improvement in motor vehicle technologies; optimising the environmental performance of the existing fleet; and promoting appropriate measures to manage transport demand. The MVEC work program involves: providing policy advice to the NEPC, NRTC, and other bodies on motor vehicle emissions and related matters; overseeing relevant projects being undertaken by transport and environmental agencies, and monitoring the work of other bodies that is relevant to the MVEC work program; overseeing programs to enhance the capability to effectively evaluate new technology and standards, measure new pollutants and undertake research for future policy-making; and monitoring and evaluating emissions inventories and projections developed by agencies. The significance of the work done by MVEC to air quality management is specifically reflected in Clause 35 of the SEPP (Air Quality Management), which commits Victoria to support the implementation of vehicle emission standards and fuel quality requirements introduced by the Commonwealth Government, and to cooperate with the NEPC and NTRC in the assessment of new motor vehicle fuels and emission technologies. 37

53 Clause 13: Implementation Clause 13 requires EPA and other agencies with environmental responsibilities in Victoria to apply the principles and intent of the policy and any relevant national measures, policies or strategies in making decisions and formulating plans and programs that may affect air quality. This Clause also lists the various instruments and measures that are available for policy implementation in Victoria. Clause 14: Accountability Clause 14 requires EPA to communicate effectively and constructively with the community on air quality matters, and to make its decisions and actions as open and transparent as possible. It also commits EPA to a range of actions aimed at ensuring that the community is reliably informed, its expectations and priorities are reflected in policies and programs, and it understands what it can and should do to improve air quality. Environmental management priorities are usually established by taking into account a range of inputs and other factors, including scientific knowledge and understanding of the issues, an assessment of the associated environmental and health risks, and an evaluation of the feasibility and costeffectiveness of management options, as well as the needs and expectations of the community. The policy s commitments to informing and constructively engaging with the community, consulting it on its expectations and priorities, and involving it in policy development, are intended to ensure that air quality policies and programs are driven as much as possible by the community s aspirations, and that these aspirations are based on reliable information and advice. Key Points Clauses 12 to 14 focus policy and program development on the areas of highest interest and priority to the community, ensuring that all stakeholders and the community in general have a voice in the development process and there is a clear indication of the means by which the policy will be implemented. Environmental Management Instruments Clauses 15 to 17 provide for a number of instruments and tools to facilitate environmental management in accordance with the Policy. Clause 15: Protocols for Environmental Management Clause 15 provides for the development of Protocols for Environmental Management as incorporated documents under the policy. The SEPP is intended to be an overarching framework for protection of the air environment. It cannot spell out in detail how this should best be done, as this often changes. It should provide the framework under which more detailed guidance can be given that can quickly reflect the current state of knowledge and contemporary circumstances. For example, in the late 1970s and early 1980s compliance with environmental law was the overriding motivating factor for industry efforts to reduce emissions. Therefore the schedules relating to particular industries were highly prescriptive. Environmental management in industry is now driven by a range of factors in addition to compliance with environmental law. In a 1996 survey of EPA licensees, companies reported that other factors that now drive environmental management include: 38

54 corporate commitment to environmental management; desire to maintain and develop good relationships with the local community; and cleaner production and eco-efficiency savings. It is no longer appropriate to set specific and prescriptive requirements that cannot be easily updated to reflect new developments in environmental management practices and provide industries with the necessary degree of flexibility to manage their emissions. For example, the information Schedule F (Minimum Control Requirements for Stationary Sources) by its nature, changes and evolves. It can be made redundant by such things as the development of new technology and practices, and may need to be updated. In future, matters of air quality management detail will be made via Protocols for Environmental Management (PEMs), which are incorporated documents under the SEPP. This approach will provide the flexibility to reflect regularly and quickly any developments in air quality management that are necessary to produce continuous improvement in air quality. These PEMs will be developed in close consultation with stakeholders. This will be critical as often it will be the stakeholder groups (for example, industry) which will have important information on new developments. EPA expects that the demand for PEMs dealing with emissions management requirements in many industry sectors will be initiated by those industry sectors themselves, and that those sectors will lead the development of the PEM. During consultation on the draft policy a number of industry representatives have discussed the possibility of developing a PEM. For example, the mining and extractive industries, and petroleum industry are two industry sectors that have already expressed keen interest to develop a PEM for their sectors. Of the schedules in the previous policy, only Schedule F (Minimum Control Requirements for Stationary Sources) is being converted into a PEM, as it deals with industry specific requirements. The current schedule has been rolled over and left unchanged for the time being. The requirements for each industry will be reviewed in conjunction with the industries concerned to update the components of the new PEM. Before initiating development of a PEM, EPA will work with relevant stakeholders to analyse the nature and significance of the issue being addressed to establish whether a PEM is the most appropriate approach, or if other alternatives are more appropriate. If a PEM is deemed to be appropriate, EPA will once again work with stakeholders to develop a plan for development of the PEM. Where a PEM is to be developed, a draft PEM will be released for public comment. The period of public comment on the draft PEM will be at least equivalent to the statutory requirement for draft SEPPs and draft PIAs, or as agreed with stakeholders. EPA will consider stakeholder input throughout the development process. Consultation will begin early in the process and continue throughout. Once a PEM has been made, a range of actions to explain and promote the PEM will supplement the consultation process. Once consultation on the draft PEM has concluded and comments taken into account, a final PEM will 39

55 be recommended to the Authority for approval. Once the Authority has approved a PEM as an incorporated document, copies will be tabled in both Houses of Parliament in accordance with the Interpretation of Legislation Act EPA will maintain a public register of current PEMs to ensure that access to all the information applicable under the policy is readily available to anyone who wants it. Industry and the broader community will benefit from this approach by having the latest information relating to air quality management reflected in PEMs. Clause 16: Risk Assessment Clause 16 makes provisions in relation to the use of risk assessment in air quality management. The SEPP (AQM) identifies a more formal role for risk assessment in air quality management in Victoria. Assessment of any emissions remaining after appropriate control and waste minimisation is applied may be assessed using formal risk assessment approaches as an alternative to applying the design criteria. It is proposed that the Authority may take into account the results of such a risk assessment in considering application for works approval and licence. Applicants for works approvals and licences are required to show that any predicted emissions remaining after the application of appropriate control practices would meet the design criteria specified in the SEPP (AQM). If these criteria cannot be met, or if meeting these requirements poses unreasonable practical or financial burden on a company, it is proposed that a risk assessment may be undertaken by the applicant and submitted to EPA for consideration as part of the works approval process. Risk assessment is not to be considered as a substitute for good environmental management, but should be seen as an additional tool for the assessment of residual emissions. For Class 3 indicators, industry must demonstrate to EPA that the control practices applied to emissions reflect world s best practice for that specific industry and therefore the risk posed by residual emissions has been minimised to levels benchmarked by such practices worldwide. In conducting a risk assessment, an evaluation must be made of the potential hazard posed by the emissions (for example, identification of potential health effects), the population exposed (including identification of sensitive subgroups) and the level and duration of the exposure (for example, does exposure occur daily or only intermittently). In assessing the hazard posed by any residual emissions it may be necessary to examine a range of health effects depending on the composition of the exposed population. For example, for emissions of benzene both carcinogenic effects and developmental effects in children should be considered. Assessment of the exposure of the population would be obtained by modelling the distribution of the emissions using an EPA approved model. During consultation and in written submissions there was generally strong support for this approach and the introduction of risk assessment into air quality management was welcomed. A background paper on health risk assessment was released to promote discussion and comment on this important issue. Feedback on the inclusion of risk assessment 40

56 in the SEPP (AQM) was overall positive, for example: We wish to congratulate the Authority for the inclusion, in Clause 22, of risk assessment as a method to assess air quality emissions. It is the first time in Australian that an authority has formally endorsed risk assessment for air quality purposes (Submission No. 26). However some individual industries were concerned about the potential costs involved in conducting full quantitative risk assessments. It is not EPA s intent to require quantitative risk assessment in all cases. In fact, in most cases a qualitative assessment would provide the information necessary to evaluate the risk to the local community. In some cases, however, a quantitative assessment of the risk may also be required (that is, number of people affected). EPA will be developing a PEM on risk assessment that will provide guidelines to companies as to how to conduct both a qualitative and quantitative risk assessments. The ability to use risk assessment tools should be of benefit to industry as risk assessment provides greater flexibility in meeting the requirements of the policy and may avoid the application of expensive technology to reduce emissions to meet the design criteria. The application of risk assessment to emissions management under Clause 16 is expected to provide environmental benefits through improved management of emissions, economic benefits to emission generators through increased flexibility and reduced risks associated with plant operations and emissions management. Health and social benefits will also be achieved through better management of the environmental risks that are of concern to local communities. Many stakeholders indicated that they wished to be further involved in the development of the draft PEM for Application of Risk Assessment. A draft PEM for Application of Risk Assessment to Air Quality Management will be developed and released for public comment during Clause 17: Separation Distances Clause 17 provides for the development of a PEM for separation distances. Separation distances are a useful tool for decision making related to land use planning and the siting of industrial and commercial premises, and support good environmental management at such premises. They provide a buffer between industry and sensitive land uses in the event of plant upsets and unexpected episodes. The impacts of pollutants during normal operations are managed through the application of best practice and rigorous design requirements. EPA Victoria developed an information bulletin for Recommended Buffer Distances for Industrial Residual Air Emissions in 1986 with a subsequent revision in 1990 (publication AQ 2/86). Under the previous SEPP (Air Quality Management), EPA applies these guidelines through the works approval and licensing system, and encourages their application by responsible authorities for land use planning. The information bulletin is under review and will be replaced by a Protocol for Environmental Management for separation distances. The review includes the development of a new framework and methodology for application of separation distances, and will be linked to planning processes to ensure that appropriate separation distances are applied and maintained. Incorporation of the PEM 41

57 under SEPP (Air Quality Management) will link separation distances more directly to the overall approach for managing air quality. The draft PEM for separation distances will be available for public comment before finalisation. There are no changes proposed to the current practice of applying separation distances, so there are no new impacts. Any changes in actual separation distances will be available for public comment during a period of consultation on the draft PEM. Key Points: Clause 15 provides for the creation of Protocols for Environmental Management to be incorporated documents to the policy. This will simplify the way in which new developments in technology, practices and other new information can be incorporated into the policy, without reducing the opportunity for stakeholder input, to provide the best air quality management. It will simplify processes for EPA and expedite the incorporation of new advances and information in air quality management. This in turn will enable action to improve air quality to evolve shamelessly in light of the latest information and avoid the need to make significant leaps in requirements after the policy is reviewed every 10 years. Clause 16 provides for the use of risk assessment. It will provide generators of emissions with more flexibility in assessing the impact of their emissions, and communities with more certainty about impacts. It may also save expenditure by focusing control effort on the areas of greatest risk, rather than the less efficient approach of requiring all areas to be treated with equal rigour. Quantitative risk assessment is more costly than qualitative risk assessment, but qualitative risk assessment will be adequate in many occasions. Clause 17 makes no changes from existing policy or practice, so there are no new impacts. Management of Emissions Clauses 18 to 23 set out the general requirements for managing emissions, particularly as they relate to industry. An explanation of the clauses is provided below, after which follows a discussion of the background to, and evolution of, the approach to management of air emissions in industry. A description of how the policy will be implemented for industry is provided to set the scene for what the impacts will be. This is followed by an assessment of the impacts of the policy variations to industry. The discussion draws on provisions in the policy, other than those in Clauses 18 to 23, to give a more comprehensive picture of how air emissions will be managed in industry, which in turn will enable a more thorough and accurate assessment of the impacts to be made. This section concludes with a brief assessment of how the general provisions apply to non-industrial sources. Clause 18: General Requirements Clause 18 proposes a range of new policy requirements for the management of emissions. 42

58 Clause 18 (1) defines the meaning of management of emissions in the policy. The definition states that emissions should be minimised in accordance with the principle of the wastes hierarchy, for which the first priority in emissions management is to avoid emissions altogether, before considering other options for minimising them as far as possible. In light of the fact that an effective emissions management regime does not consist simply of avoidance or minimisation, the definition also includes the assessment, monitoring, control, reduction or prohibition of emissions to ensure that all important aspects of the ability to manage emissions are available under the policy. Defining the management of emissions in this way will ensure that all appropriate and necessary steps can be taken to meet the policy aims. Clause 18(2) provides a definition of generators of emissions for the purposes of the policy. The definition addresses the activities of those who directly generate emissions but also reflects the importance of managing the environmental impacts of goods and services throughout their life cycles, so that wastes and emissions can be avoided or minimised at various stages including their design, production, marketing, use and ultimate disposal. The definition is qualified by inclusion of where the context allows to accommodate circumstances where emissions management and other requirements in the policy applied to generators of emissions do not make sense. or indirectly, can (where the context allows) be managed. Clauses 18(3) requires emission generators: to manage their emissions in accordance with the aims, principles and intent of the policy; pursue continuous improvement in their environmental management practices and environmental performance; and apply best practice to the management of their emissions, or if they emit Class 3 indicators, reduce those emissions to the maximum extent achievable. Clause 19: Management of New Sources of Emissions Clause 19 requires the use of best practice for all new or substantially modified sources of emissions, including greenhouse gases and ozone-de pleting substances. Clause 20: Management of Class 3 Indicators Clause 20 requires generators of emissions of Class 3 indicators to reduce those emissions to the maximum extent achievable (MEA), and allows EPA to prohibit such emissions if they are a significant threat to public health. It also provides a mechanism for the phased implementation of changes to licence fee requirements associated with the re-classification of indicators from Class 2 to Class 3, or the classification of brand new Class 3 indicators. The definition will ensure that all activities that result in the generation of emissions, either directly 43

59 Clause 21: Monitoring of Emissions Clause 21 allows EPA to require emission generators to measure and report their emissions and the local impacts of these emissions. These provisions do not differ substantively from those in the previous policy, and reflect current practice. Clause 22: Management of Emissions from Stationary Sources Clause 22 allows for special circumstances in relation to emissions management for particular industries to be taken into account. Schedule F of the previous SEPP (Air Quality Management) is being rolled over in its entirety into the PEM (Minimum Control Requirements for Stationary Sources) until such time as the special circumstances for each industry group addressed in Schedules F are reviewed. Schedules G and H from the previous policy are being rolled over unchanged into new schedules in the policy. This provision does not differ from the current policy therefore there are no new impacts. The clause also accommodates the circumstances previously reflected in clause 8(3) in the former SEPP (Air Quality Management) relating to protection of the beneficial use of aesthetic enjoyment and local amenity in areas affected by the discharge of odorous compounds from wood pulp mills employing the Kraft process and complying with the requirements of Schedule F-3 in the former SEPP. The updated clause reflects the continuous improvement demonstrated by existing licensed premises in this category that has also been committed to in the future through the development of an environment improvement plan. Clause 23: Commissioning, Startup and Shutdown of Equipment Clause 23 accommodates the special circumstances that occur during the commissioning, startup and shutdown of equipment. These provisions do not differ substantively from those in the current policy therefore there are no new impacts. Background The impacts of clauses 18 to 23 on industry are best understood by considering how air quality management in industry has evolved since the introduction of the first SEPP for the air environment in 1981, and considering the provisions of the new policy in light of this. To that end, it is also important to consider other aspects of the policy relating to industry, such as the new tools introduced to support emissions management by industry. SEPP (The Air Environment) was introduced in Since that time significant reductions in emissions from industry have been achieved without compromising the development of industry within Victoria. On the contrary, improved emissions management in industry has enabled industrial development to take place by preventing significant deterioration in air quality. The general approach taken under the 1981 policy to managing emissions from industrial sources was the application of good control practice to emissions (except for emissions of class 3 indicators, for which reduction to the maximum extent achievable by technology applied), and the specification of emission limits for various pollutants and minimum control requirements for particular industrial sectors. 44

60 New sources of emissions were required to design their premises to meet design ground level concentrations. A range of provisions enabled special circumstances to be accommodated in assessing a premises compliance with the policy during operation (for example, if compliance would create waste disposal problems for other segments of the environment, or during the commissioning, startup and shutdown of equipment). Equally, restrictions or additional requirements on emissions of pollutants could be imposed under certain circumstances. As indicated above, this general approach has proved to be effective at reducing emissions from industry while still accommodating industrial development. However, with the passing of time, new tools for, and better approaches to, environmental management have emerged that can augment this general approach to produce better outcomes for the environment and for the economy. As such, the new policy continues the general approach that has proved so effective at reducing industrial emissions while supporting industrial development, and introduces a range of new approaches and tools that will enable more effective and efficient management of emissions in industry. Continuity of Approach In several respects the approach to be taken under the new policy mirrors that taken under the previous policy, but is just updated to accommodate recent developments in environmental management practices and tools, and new information about air pollutants and their impacts. The general approach to emissions management still applies, although it has been updated from the application of good control practice to the application of best practice management in accordance with the policy s aims, principles and intent, and the pursuit of continuous improvement. Applicants for works approval will be required to demonstrate to EPA that their development proposals incorporate best practice, as well as applying the general policy principles and considering the management of greenhouse gases and energy efficiency (under Clause 33). They will still have to demonstrate that their new premises meet the design criteria (the new term for design ground level concentrations ) for any pollutants they emit. Provisions to accommodate special circumstances in industry and apply additional controls still exist. New Aspects Best Practice (incorporating eco-efficiency), Continuous Improvement and Policy Principles Best practice is defined in the policy as: The best combination of eco-efficient techniques, methods, processes or technology used in an industry sector or activity that demonstrably minimises the environmental impact of a generator of emissions in that industry sector or activity. Generators of emissions should be seeking to employ what is regarded as the best approach in their industry sector or activity to the minimisation of emissions. It is important to note that what is commonly regarded as the best across an industry sector will vary for different industry sectors. It does not imply that what is appropriate for one industry sector will be appropriate for any other. 45

61 The definition also explicitly encompasses the notion of eco-efficiency. Eco-efficiency is defined in the policy as: Producing more goods and services with less energy and fewer natural resources, resulting in less waste and pollution. This definition is drawn from the World Business Council for Sustainable Development. Eco-efficiency involves the minimisation of wastes (including emissions to air) and resource consumption (including energy use) at each stage of the life cycle of a product or service. It is closely related to cleaner production, with its emphasis on waste avoidance and minimisation, and its potential for increased efficiency and reduced costs from energy savings. The potential benefits for enterprises from introducing best practice that reflects modern approaches such as cleaner production and ecoefficiency arise in a number of ways, including reduced emissions and consumption of materials and energy. Cleaner production approaches can also result in reduced business costs and reduced process-related emissions. This has been demonstrated in numerous cases by businesses working with EPA and other agencies through cleaner production programs. New business opportunities, waste disposal savings, and short pay-back periods for capital expenditure are just some of the benefits that have been accrued to these businesses from the application of a cleaner production approach. A cleaner production case study illustrating how improved air quality outcomes can be achieved is provided below. Cleaner Production Case Study A company stripping paint from cars managed to save $100,000 per annum by changing its process. By using a plastic media to strip the paint back the company avoided the need for caustic chemicals and organic strippers, decreased time needed to strip back the cars, and eliminated gaseous and liquid waste associated with the old process. The payback period was two to three years on their original investment. This overall approach contrasts with end-of-pipe technological approaches which are often more costly and were commonly used in the 1980s. Continuous improvement acknowledges that what is achievable in environmental management varies with the passage of time through the development of more effective and efficient practices, technologies and capabilities. It means that generators of emissions should be regularly evaluating and, wherever practicable, adopting measures to reduce emissions and improve air quality. As this requirement will be implemented in the context of policy principles requiring cost-efficiency and integration of economic, social and environmental considerations it will not oblige generators of emissions to implement measures that are not practicable. The management approach for industrial sources of emissions is also now based on the principles contained in the Environment Protection Act 1970 (which include shared responsibility, product 46

62 stewardship, the wastes hierarchy and integrated environmental management). The management of emissions should focus primarily on avoidance, and if this is not possible, minimisation, and then subsequently assess the need for further reduction, dispersion or monitoring of emissions to protect and manage local or regional air quality. Options for the avoidance and minimisation of emissions should be evaluated for: the premises where emissions are generated, including consideration of product formulation, the selection and management of production processes, the selection of material inputs to production, the marketing, handling and useful life of products, and the management and disposal of wastes and by-products; and the design, production, marketing and handling of goods, materials, resources and services that may be used as production inputs by the premises, and the management of wastes that may arise from these activities. These provisions confirm approaches to environmental management that have become more widely adopted in Victoria during the last decade (for example, application of the wastes hierarchy and cleaner production), and are now recognised by industry leaders as the new direction for future environmental management practice (for example, eco-efficiency). These integrated approaches are increasingly being applied to air quality management and, with the new emphasis on managing greenhouse gases and energy efficiency, eco-efficiency is becoming the integrated environmental management package of the future. Maximum Extent Achievable Class 3 indicators are pollutants that, because of their recognised carcinogenic, mutagenic, teratogenic, highly toxic or highly persistent nature, should be subject to particularly stringent emission control - more stringent than for Class 1 or Class 2 indicators. The former policy requirement to reduce emissions of Class 3 indicators was to the maximum extent achievable by technology (MEAT). This has meant that much of the focus has been on reducing emissions solely with control equipment (that is, tackling emissions after they have been generated), rather than examining the processes that generate emissions to see if they can be avoided through alternative production processes, or minimised through reuse, recycling or other measures. MEAT effectively required the application of world s best technology for avoiding or minimising emissions. For the emissions that remained after MEAT was applied, dispersion modelling of emissions was undertaken to ensure that the design ground level concentrations were met (as with other air quality indicators). If predicted levels exceeded design ground level concentrations, even after MEAT has been achieved, approval for a new development would not normally have been granted by EPA. Because of the extremely hazardous nature of Class 3 indicators, the policy requirement to reduce emissions to the maximum extent achievable has been retained, although the implication that this should or would be achieved solely through the application of technology has been removed. The removal of the reference to technology is consistent with the cleaner production approach 47

63 being emphasised for management of emissions for industry through the policy. As with the management of other classes of air quality indicators, the new requirement for emission generators to pursue continuous improvement and apply the policy principles will further increase the emphasis away from emission control and towards waste avoidance, reuse and recycling, and less reliance on costly technology-based emissions control. This will require a greater focus on achieving environmental gains through tackling the processes and activities that generate wastes and emissions, rather than controlling emissions solely through end-of-pipe solutions such as emission control technology. Issues of practicability will still be taken into account for controlling emissions of Class 3 indicators. However, given the serious potential health impacts of Class 3 indicators, careful analyses will be expected of the options for reducing these emissions. How do you assess what is practicable? Decisions with respect to practicability will have regard to technical, logistical and financial considerations. Technical and logistical considerations include a wide range of issues that will influence the practical feasibility of an option for example, whether a particular technology is compatible with an enterprise s production processes. Financial considerations relate to the financial viability of an option. It is not expected that reductions in emissions be pursued at any cost. Nor does it mean that the preferred option will always be the lowest cost option. It is important that the preferred option is cost-effective. The costs need to be affordable in the context of the relevant industry sector within which the enterprise operates. This will need to be considered on a case-by-case basis through discussions with EPA. The relevant financial cost to be considered is net cost for example, investments may involve an up-front cost but also provide a pay back through reduced resource and energy inputs. The above explanation of practicability is the same as used in the recently made industrial waste management policy (prescribed industrial waste). The very high degree of emissions reduction inherent in MEA means it may require the application of new, original or innovative practices to a particular source. In addition, the particular circumstances of the premises emitting Class 3 indicators will be taken into account in assessing what constitutes MEA for that premises to maximise emissions reduction on a case by case basis. MEA is defined in the policy as: A degree of reduction in the emission of wastes from a particular source that uses the most effective, practicable means to minimise the risk to human health from those emissions and is at least equivalent to or greater than that which can be achieved through the application of best practice. 48

64 There are three features of this definition that distinguish it from the expectation for management of emissions of Class 1 or 2 indicators. The first is it focuses on what can be achieved at a particular source, rather than across an industry sector or activity (as is the case for best practice). This is because the higher expectation for management of emissions of Class 3 indicators suggests that greater effort should be put into investigating the particular circumstances and opportunities presented in each case rather than simply considering what applies across the industry. The second is that it identifies what MEA is by reference to best practice. In some cases, best practice in an industry sector may represent MEA for a particular premises. What is regarded as best practice for the general management of emissions for some industries or activities may not be sufficient for the management of the more hazardous Class 3 indicators. MEA suggests that it is necessary to look beyond what is commonly applied in an industry to see if other initiatives (especially those employing higher elements of the wastes hierarchy) are practicable in the context of the individual premises in question. It also means that simple compliance with design criteria for new proposals is not sufficient and that opportunities to go beyond this should be investigated and exploited where practicable. The third is that the focus is on protection of human health, rather than other beneficial uses of the environment. Such is the hazardous nature of Class 3 indicators that greater emphasis may be placed on their reduction, which could result in outcomes that may not be as desirable for Class 1 or 2 indicators (for example, increased energy consumption through the application of more energy intense emissions reduction techniques). These issues have been discussed with stakeholders during the development of the policy, especially industry representatives. The definition of MEA in the policy has been modified to provide greater clarity about its intent and application. Risk Assessment The policy formally introduces the ability to undertake a risk assessment as part of a works approval application for the first time. Risk assessment will also be available to existing generators of emissions to use in assessing their performance. Risk assessment may be used to assess the potential risk arising from exposure to any emissions remaining after MEA (in the case of Class 3 indicators) or best practice (in the case of Class 1 and 2 indicators) has been applied. A risk assessment could be conducted to evaluate the potential risk to nearby communities of emissions from an industrial premises and aid in the assessment of a works approval. This may lead to more confidence in the assessment of potential impacts, and a more realistic outcome in terms of management requirements for the emission generator. It may also reveal that there is minimal environmental impact from the proposal and that scarce resources should not be wasted for no environmental gain. 49

65 Greenhouse Gas Emissions and Energy Efficiency The policy also formally introduces the integration of greenhouse gas emissions and energy efficiency considerations as part of the works approval process for the first time. With the move towards a more integrated approach to environmental management in industry, it is appropriate, and more efficient, to consider all emissions to the air environment (that is, air pollutants and greenhouse gases) when developing proposals for new facilities. To this end it also makes sense to consider energy efficiency at this stage, not just direct emissions of greenhouse gases. Attention to energy efficiency at the design stage of new premises is now widely accepted as being part of best practice in industry. into Cancer, USEPA and Worksafe. As a result of this revision, some Class 2 indicators have been reclassified as Class 3 indicators, and some new Class 3 indicators have been introduced. The design criteria for these indicators have also been revised in light of the latest occupational health and safety levels from which they have been derived. The net effect of the revision is that the number of Class 3 indicators has increased from eight to 26. New and Revised Design Criteria Apart from the new Class 3 indicators highlighted above, a few new Class 1 and 2 indicators have been introduced into the policy and new design criteria developed for these. In addition, the existing toxicity-based design criteria for the Class 1 and 2 indicators have been reviewed in light of the latest occupational health and safety levels, or other levels, from which they are derived. Protocols for Environmental Management Protocols for Environmental Management will be a key tool for setting out matters of air quality management detail. For example, greater clarity as to what represents MEA for certain industries could be set out in a PEM. As discussed previously, two key industry sectors with which EPA has already discussed developing PEMs as an early priority are the petroleum industry and the mining and extractive industry. Classification of Indicators The list of Class 3 air quality indicators has been revised to reflect the substances listed in the most recent classifications of carcinogenic or highly toxic materials by the International Agency for Research Implementation in Industry This section summarises the differences in implementation of the policy between new industrial sources and existing industrial sources. The policy applies to all generators of emissions. For industrial sources of emissions the approach to implementation and compliance will depend on whether the source is a new proposal or an existing premises, and for existing premises whether it is licensed or not licensed. New proposals (and substantial modifications to existing premises) will be expected to take account of all relevant provisions of the policy in applications for works approval. Applicants for works approval and licensing will be required to demonstrate that the proposal satisfies 50

66 requirements for the application of the policy principles and best practice (or reduction of emissions to the maximum extent achievable for Class 3 indicators), and considered greenhouse gas emissions and energy efficiency in their proposal. A risk assessment may also be conducted as part of the application for works approval. This will be particularly important if a proposal for a new premises is unable to meet the design criteria even after applying the appropriate level of emissions management (for example, for class 3 indicators MEA). A risk assessment may be used to supplement the evaluation by EPA as to whether the beneficial uses of the environment will be protected. Existing licensed premises will be required to comply with the policy. Policy implementation will occur broadly, but focus initially on premises emitting Class 3 indicators. Priority will be given to the most significant sources (taking into account factors such as the potential impact of emissions and sensitivity of the receiving environment). For existing licensed premises to demonstrate compliance with the policy, EPA expects these premises will, as part of their normal environmental management: review all processes in light of the new SEPP; develop an action plan to comply with the SEPP; and implement the action plan. Action plans will be developed in liaison with EPA, in accordance with the company s business cycle and environmental improvement program, and in line with the general requirement for continuous improvement. EPA will expect companies to give particular regard to the wastes hierarchy, ecoefficiency and best practice or, for class 3 indicators, reduction to the maximum extent achievable. The timeframe for compliance will vary depending on the indicator in question and the circumstances of particular industries and companies. For Class 1 indicators a maximum of five years will apply given the imperative of the SEPP (Ambient Air Quality) goals for For Class 2 and 3 indicators the timeframe will be negotiable, however it cannot be greater than 10 years, which is the life of the policy. Factors such as the investment cycles for industry sectors will be considered in determining these timeframes. PEM for specific industry sectors may address details such as period of compliance or the meaning of best practice or MEA for a particular industry sector. For individual companies with specific issues, the company s environment improvement plan will be the most appropriate mechanism for addressing these issues. In assessing compliance with all aspects of the policy, EPA will take into account the practicability of options for improving performance, including technical, logistical and financial considerations. It is not expected that reductions in emissions be pursued at any cost. It is important that the preferred options be cost-effective. Changes in emissions may be estimated, modelled and assessed against design criteria to give an indication of the effectiveness of any proposed changes. The new design criteria will not be used as a basis for regulatory enforcement for existing premises during the implementation phase. Risk assessment will be an option that existing licensed premises will be able to use to 51

67 demonstrate that emissions from their premises do not compromise protection of the beneficial uses of the environment. EPA client managers will work with companies to facilitate an understanding of the new policy and ensure that continuous improvement is integrated into business cycles and incorporated into company EIPs. Premises with community-based EIPs may work with their community committees as well as EPA to develop appropriate action plans and timelines for improvement. One issue that emerged through consultation that was of particular interest to industry was in relation to the changes to licence fees that would occur as a result of the re-classification of some Class 2 indicators to Class 3, and the introduction of new Class 3 indicators. With the higher fee rate for Class 3 indicators, these new classifications would have resulted in significant increases in fees paid by some companies. In recognition of the fact that companies need time to plan for upgrading their performance to MEA and then implement their plans it was decided that it was appropriate to specify a period of time during which the fee rate for newly classified Class 3 indicators would not apply. This was done by amending the Environment Protection (Fees) Regulations to indicate that premises emitting a newly classified Class 3 indicator would not incur the new Class 3 fee rate for 24 months after the classification of the indicator. This was complemented by the introduction of a clause in the policy indicating that existing licensees will have 24 months after the classification of a Class 3 indicator that was not previously classified as such to develop an environment improvement plan, or revise their existing environment improvement plan, to demonstrate how they will comply with the requirement for MEA. Such a plan must outline the measures they will put in place and the time frame in which they intend to implement those measures. Upon completion of an agreed plan, companies will be able to apply to EPA to enter into a fee-reduction agreement during the time that they are implementing their plan. Existing licensed premises will also have to consider their greenhouse gas emissions and energy efficiency. This is discussed in more detail in relation to Clause 33. For non-licensed premises, EPA will work with the relevant industry groups to develop guidelines for environmental management that provide guidance on how to achieve the aims of the policy and comply with its requirements. Impacts Associated with Clauses 18 to 23 General Impacts The policy has been designed, and will be implemented, to minimise costs to industry and to help industry identify cost savings. EPA will liaise with the approximately 300 premises currently licensed for emissions to air to ensure that compliance with the policy occurs as soon as is practicable. Any costs to applicants for works approvals associated with meeting these requirements will be offset by the benefits of reduced energy consumption and waste disposal costs, and the potential for gains in production efficiency. 52

68 For those smaller premises which do not require works approval or licensing, the encouragement of continuous improvement and best practice and the promotion of guidelines for cleaner production and energy efficiency will ultimately have positive impacts, as emission generators will choose to make changes when it is most advantageous for them to do so (for example, in conjunction with plant upgrading or expansion). Where an existing premises is shown to be causing an environmental problem, EPA may take the opportunity of a significant modification to production processes or operating arrangements to require best practice to be introduced. These situations would be assessed on a case-by-case basis, so it is difficult to estimate either the individual or overall impacts of this approach. Integrating the management of wastes, emissions, energy and resources, and the assessment of potential impacts on air quality or water quality and waste management, will enhance the efficiency and effectiveness of solutions, and hence minimise costs. Also, the costs of avoidance and prevention are often less than the costs of remediation, so the emphasis on avoidance and prevention is likely to minimise adverse impacts in many cases. This approach will produce significant gains in environmental performance and resource efficiency. However, there may be costs for some premises, such as those that are causing environmental problems and have made little progress towards cleaner production or best practice in recent years. It is recognised that some businesses have been relatively slow in adopting cleaner production and best practice due to real or imagined barriers to implementation, such as a lack of financial and human resources, limited access to information on new technologies and practices (and their potential benefits), and management scepticism and inertia. For some businesses the initial costs associated with shifting to different practices or technologies may be quite significant, although in many cases these same practices and technologies offer the prospect of efficiency gains and cost reductions if carefully selected and properly implemented. On the larger scale, the minimisation of wastes, emissions and resource consumption across industry sectors and other activities, coupled with continuous improvement in environmental performance, will provide more opportunity for development within a variety of industry sectors and activities, with the consequent broad benefits this brings. (A scenario in which Victoria s regional air quality goals and objectives were regularly being breached would be something of a barrier to the entry of new players in certain industries, who would be contributing emissions to the environment that was already receiving them in excess of what Victoria was committed to achieving). General Impacts Associated with Class 3 Indicators Applying MEA to licensed industrial premises will require extensive discussion with each premises on its future plans for upgrading or expanding facilities, investment cycles, industry trends, likely new technologies and practices, and a range of other parameters. The necessity of working in such depth with a company to assess accurately what MEA means to that company makes it very difficult to be 53

69 precise about the likely impact of implementing the MEA requirements of the policy. As with existing licensing practice, thresholds for emissions need to be established to separate those sources that are required to be licensed from those that are not. These thresholds would be chosen to capture all of the significant stationary sources of Class 3 indicators that are amenable to effective management through works approval and licensing. The thresholds for licensing and works approval are established through the Environment Protection (Scheduled Premises and Exemptions) Regulations Currently these regulations specify a threshold for each of the previous list of Class 3 indicators, rather than Class 3 indicators as a category. As such, some emitters of the new Class 3 indicators at the designated threshold will not be licensable (those who currently have a licence for another indicator can be). EPA s assessment is that this situation applies to approximately 10 companies. Emissions from any premises in this category will be controlled by use of a Pollution Abatement Notice (see later in this section). When the regulations are remade in 2006, the provisions for licensing Class 3 indicators will be clarified. There are three main features of the new policy approach to managing emissions of Class 3 indicators that should be considered when evaluating potential impacts. Firstly, the requirement to reduce emissions to the MEA, rather than the maximum extent achievable by technology, allows a broader assessment of the options and potential outcomes for the avoidance and minimisation of emissions. Options that are not solely based on technology can be included in the assessment, which may lead to better environmental outcomes. Also, MEA requires the pursuit of the best outcome for emissions reduction at each stage of the product life cycle, each stage of the production process, and each level of the wastes hierarchy. On the one hand, this approach may lead to more rigorous requirements (in pursuit of the lowest possible emissions) than the current policy approach. On the other hand, it offers a wider range of options than purely technological solutions, and hence the possibility of increased efficiencies and other benefits. Secondly, risk assessment techniques are now explicitly available in the policy for the first time and these may be very useful in assessing and managing potential emissions of Class 3 indicators. For example, a quantitative risk assessment usually provides greater understanding and confidence in environmental performance and hence in potential exposure and impact levels. This more rigorous approach provides greater confidence in outcomes and allows more flexibility in managing and monitoring performance, with potential benefits at the same level of protection for the environment and local communities. Thirdly, anything less than the most rigorous requirements would not be acceptable for these extremely hazardous substances. The avoidance of emissions must have a very strong priority in managing these substances. Impacts for New Licensed Premises Associated with Class 3 Indicators The number of Class 3 indicators has been increased (from 8 to 26), with new design criteria for the re-classified Class 2 and new Class 3 indicators, 54

70 and new design criteria for existing Class 3 indicators. Proponents for new works requiring a works approval will be expected to apply MEA in their proposals. They will be expected to make a rigorous examination of opportunities for avoiding the creation of wastes and opportunities for other waste minimisation in accordance with the wastes hierarchy. Proponents will need to liaise closely with EPA to agree what constitutes MEA in their particular situation. The greater rigour expected in the examination of options for managing emissions of Class 3 indicators compared with Class 1 or Class 2 indicators means that more effort is required up front as part of the application for works approval, especially in terms of researching and reviewing options. This is no different to the situation under the previous policy, where greater effort was necessary under the policy requirement for MEAT. The difference now is that proponents have more options explicitly available to them to consider, including process and input changes that are unrelated to technology. This may take some increased effort, but provides more flexibility to proponents and may also provide all sorts of dividends in terms of reduced waste creation, management and disposal costs, increases in production efficiency and reduced energy consumption. The cleaner production philosophy espoused by the MEA approach - that is, avoiding the creation of wastes in the first place makes both good environmental and economic sense - has been shown to have positive impacts in a variety of case studies conducted by EPA in a variety of contexts. In addition to the greater flexibility provided to proponents by the policy requirement for MEA compared with MEAT, proponents will also have available to them for the first time under the policy the option of conducting a risk assessment, which EPA may use in making an assessment of the works approval. If after applying MEA a proponent models the emissions remaining and finds that they do not meet the new design criteria, the proponent may undertake a risk assessment of the remaining emissions to see what impact they have on the beneficial uses of the environment. If the risk assessment shows that the impact is acceptable the works may be approved. A PEM on risk assessment setting out the criteria for a risk assessment under the policy will be developed as a priority after the SEPP is made. This option provides much greater flexibility for proponents to demonstrate that their proposal complies with the policy requirement to protect the beneficial uses of the environment than the previous policy did. Impacts for Existing Licensed Premises Associated with Class 3 Indicators The approach to managing emissions of Class 3 indicators for existing licensed premises will be highly case-specific, which makes providing a detailed overall assessment of the impact impossible, without making gross generalisations that may well distort the real impact. The only way of making an accurate assessment of the impacts would be to place highly prescriptive and inflexible 55

71 requirements on industry. However, this would impose high cost actions from industry. Instead, an assessment has been made of the likely extent of the implications of implementing the policy for existing licensed and un-licensed premises, and the associated implications in terms of licence fees, and examples of the kinds of steps premises will take have been provided to illustrate the practicable and cost-effective approach to implementation of the policy that will be taken with existing licensed premises. The assessment of existing licensees has identified those licensees that EPA believes, or has grounds for believing, currently emit substances on the list of Class 3 indicators. This work also includes an assessment of whether the current practices and performance of these licensees would satisfy the MEA requirement (including an assessment of how they perform against the new design criteria, as a guide). From an examination of information in the Port Phillip Region emissions inventory, National Pollutant Inventory, EPA s licence data base and drawing on the experience of EPA s client managers, EPA estimates that there are approximately 110 significant stationary sources of the revised list of Class 3 indicators, including those licensed to emit the seven pollutants that were previously on the list (and still are) as well as the 19 additions to the list. This does not include fuel storage facilities that emit benzene, which are discussed below and in the section on PEMs. A nominal threshold of 0.1g/min (or 50 kg/year) has been used in this assessment for determining whether a source is significant. This threshold is drawn from Table B(1)(a)(vi) of the Environment Protection (Scheduled Premises and Exemptions) Regulations 1996 which provides the exemption from works approval for emissions of total organic compounds listed in category 12(a)(iii) of Table A in the same regulations. EPA currently administers about 300 licences for emissions to the air environment. EPA believes that about 45 of these specifically licence for emissions of the revised list of Class 3 indicators. These include about 20 licences for emissions of previous Class 3 indicators and 25 licences for emissions of new Class 3 indicators, including re-classified Class 2 indicators and new Class 3 indicators that were previously licensed while not classified as an indicator under the SEPP. (If a substance was known to be harmful but was not classified as an indicator under the SEPP and it came to EPA s attention it was previously classified by default as a Class 2 indicators). About another 65 sources are known or believed to be emitting these substances, but are either not specifically licensed for the emission of these substances or not licensed at all. This includes approximately 25 licensees with emissions of some Class 3 indicators contained in licensed emissions of generic groupings of Volatile Organic Compounds or Total Organic Compounds. EPA will ask these licensees to identify any Class 3 indicators that are contained in these generic groupings and, if present, to quantify them and assess their impacts. Of the remaining 40, approximately 20 are licensed but not for one of the new list of Class 3 s or TOC/VOC and are strongly believed to be emitting a Class 3 substance. A further 10 are licensed but not 56

72 for the new Class 3 s or TOC/VOC and for which there is some suspicion of emission of Class 3 substance but no emission information on which to base any assessment. The remaining 10 are not licensed at all but which are strongly believed to be emitting Class 3 substances. In early-2001, EPA conducted a questionnaire survey of licensed premises considered as possible emitters of substances on the new list of Class 3 indicators. The purpose of the survey was to establish whether these premises were able to comply with the requirement for application of MEA (and how they compared to the design criteria as a guide) and the impacts of any measures to achieve compliance. The survey sent to companies also contained an explanation of what MEA entailed. Questionnaire responses were received from half of the licensed premises. These revealed that about 50 per cent of licensees believed that they complied with the requirement for MEA, 25 per cent were unsure of their compliance and the remaining 25 per cent felt they did not comply. The question of what steps they believe will be necessary to apply MEA and the anticipated impact of those steps produced a range of responses. However, there was a common theme in some responses, which was that the compliance steps would be to apply some form of emission control technology. This end-of-pipe approach is not consistent with the policy principle of the wastes hierarchy, which seeks to emphasise ways of avoiding emissions in the first instance (for example, by reformulating products or redesigning processes). In implementing the policy, EPA will be emphasising waste avoidance in the application of MEA. This emphasis is fundamental in making progress towards more sustainable practices. The extent to which options at the top end of the wastes hierarchy, such as avoidance, actually exist is something that will require in-depth assessment on a case by case basis. This precludes any attempt to accurately aggregate the impact of applying MEA in this way to affected companies. Aggregating the impact necessitates making assumptions that may not hold in reality. The impact is best understood by understanding the approach EPA will be taking to the application of the policy requirement for management of emissions of Class 3 indicators to MEA. This is: MEA will be discussed in-depth with each licensed premises on a case by case basis, taking all the environmental, technical, logistical and financial circumstances of that premises into account; premises will be asked to develop a plan illustrating how they will apply MEA and the time frame over which their proposals will be introduced. The nominal target for compliance with the policy in relation to MEA will be five years from the time the policy is made, however this will be flexible and take into account the circumstances of individual premises, including such things as investment cycles and planned upgrades; provision has been made under the Environment Protection (Fees) Regulations 2001 for fee relief following gazettal of the policy. A transitional provision has been included in the 57

73 regulations, which states that where a classification of a class 3 indicator occurs, no fee increases will occur for a period of 24 months. This period provides premises with time to develop their plan without incurring fee impacts; premises will be able to conduct a risk assessment to supplement their plan of how MEA is to be applied in their circumstances; and premises will be prioritised for attention according to the impact of their emissions on the environment. Those posing the greatest environmental risk will be subject to the earliest attention. volition. There has also been policy support towards this move, for example, through the Industrial Waste Management Policy (Waste Minimisation). The extent to which emissions reduction opportunities that are not end-of-pipe exist for the premises in question, and the extent to which any that are available are practicable, is something that will have to be worked through in detail with each premises. It is also important to emphasise the significance of risk assessment in assisting to make decisions about what level of investment in emission control practices is appropriate. A variety of licensees were interviewed by consultants for the purpose of developing case studies illustrating the impact of the policy for licensed premises identified as being sources of the new Class 3 indicators. The case studies provided below are from this work. EPA s comments on these case studies are also provided to elaborate on this assessment of how the policy impacts on these premises. EPA s comments illustrate how important assessment on a case by case basis will be to ensure that all the tools at the premises disposal are utilised to optimise the steps taken to comply with the policy. The case studies reveal an end-of-pipe mind set still exists in industry for the control of emissions of Class 3 indicators. This is hardly surprising as the former policy requirement for MEAT emphasised technological solutions. Although, since the policy requirement for MEAT was introduced in 1981, sections of industry - recognising the benefits - have moved towards cleaner production of their own 58

74 Case Study 1: Formaldehyde A company in Victoria uses formaldehyde as a component of various fabric finishing chemicals to give the desired fabric characteristics such as 'feel'. Ground Level Concentration modelling a year ago shows that the proposed Design Criteria (DC) for formaldehyde would be exceeded by a factor of several times. Efforts have been made since then to substantially reduce formaldehyde usage, but it is not clear if this has been sufficient to achieve the proposed DC. Formaldehyde emissions are controlled by routing some equipment exhaust gases though a water scrubber. If further reduction were required to achieve the proposed DC or the best practice requirement of the policy, effort would first aim at process and product optimisation to reduce formaldehyde usage. Still further reduction would require additional scrubber facilities on other equipment at a cost of several hundred thousand dollars. However, the company strongly feels that such expenditure would probably be better directed to address other environmental issues at the site. EPA comment on case study 1: It is important to remember that modelling against the new design criteria would only be used as a guide to the premises performance, not as a measure for determining compliance with the policy. If any modelling done showed that the design criteria were being exceeded after all practicable measures for reducing emissions had been applied, a risk assessment could be used to help assess if the beneficial uses of the environment were being protected. The company s intention to first consider process and product optimisation to reduce formaldehyde usage is consistent with the policy principle of the wastes hierarchy (that is, seeking to avoid the creation of emissions in the first instance). The need to invest in additional equipment, such as a scrubber, would depend on the outcome of the other process changes, and the result of the risk assessment. If a risk assessment showed that the additional control achieved very little by way of additional protection of the beneficial uses of the environment it is unlikely that it would be required. The company s argument that such expenditure could be better directed to other environmental issues on site would be considered by EPA under the principle of integrated environmental management. Case Study 2: Dioxins, Furans, Arsenic, Beryllium, Cadmium, Chromium A company generates electricity from brown coal using two large steam plants fitted with electrostatic dust precipitators. The combustion process and trace materials in the brown coal result in small emissions of polychlorinated dioxins and furans as well as the Class 3 chemicals arsenic, beryllium, cadmium and chromium. These chemicals have been found to be uniformly distributed in the coal, so that their emissions are expected to be reasonably consistent. 59

75 No controls specific to these emissions exist and none are known to exist for this process. No tests have been conducted on the electrostatic precipitators to determine if they retain these materials, or if operation under varying conditions results in different retention rates. The total of all detectable isomers of dioxins and furans has been measured at 55 grams per year. This measurement is the toxic equivalent of no more than one fifth of a gram per year of the isomer TCDD specified in the proposed SEPP. Of the other Class 3 chemical emissions, beryllium would have the greatest potential to exceed the proposed design criteria, based on expected emissions and the design criteria. Expected emissions are based on coal content. A preliminary assessment indicates beryllium emissions meet the proposed DC. Further, on this basis, the concentrations of dioxins and furans measured in the stack would be expected to result in emissions several orders of magnitude below the proposed DC. EPA comment on case study 2: Once again, it is important to emphasise that any modelling against the new design criteria would only be used as a guide to compliance with the policy, and as one of a suite of tools, and not for assessing compliance per se. The case study illustrates how important it will be for some premises to undertake a deeper analysis of their emissions to assess the extent to which they may be emitting these hazardous pollutants. Case Study 3: Acrylonitrile and 1,3-butadiene A company manufactures a range of dispersions and chemicals for modifying viscosity and to assist processing and finishing in the carpet, paper, adhesives, textiles and leather industries. Raw materials include the proposed SEPP Class 3 chemicals acrylonitrile and 1,3-butadiene. Since 1994, gaseous emissions from the processes and associated scrubbers have been collected and ducted to an oxidiser for combustion. Scrubber washings are tested for contaminant levels prior to batch discharge as trade waste. A leak detection and repair program is in place. Liquid products are increasingly sold in bulk, reducing emissions from drumming operations. Initial modelling indicates the proposed design criteria are met. The proposal would require the company to measure, model and report on Class 3 chemical emissions at an estimated cost of $4,000. Additional ongoing monitoring costs of up to $4,000 per annum may also be incurred. MEA is met by equipment design except that current industry standard leak control hardware (valves and pumps) would need to be replaced, at a cost of $90,000, for a small and not significant reduction in routine emissions. The proposed SEPP would require the company to consider ways to achieve more complete reaction of Class 3 chemicals before processes are opened to atmosphere and to demonstrate that the use of these chemicals cannot be reduced with, for example, the use of less hazardous alternatives. EPA comment on case study 3: Once again, it is important to emphasise that any modelling against the new design criteria would only be used as a guide to compliance with the policy, and as one of a suite of tools, and not for assessing compliance per se. 60

76 Whether or not the new investment in leak control hardware is warranted would depend on such things as an assessment of the practicability of implementing it, the emissions reductions achieved, the outcome of a risk assessment and what additional protection of human health it would achieve. In general, as part of its approach to MEA, the company would be expected to assess the current leak control hardware and the availability of improved equipment, and phase in improved equipment as part of normal replacement cycles if warranted. The company s proposal to consider ways to achieve more complete reaction of Class 3 chemicals is consistent with the wastes hierarchy policy principle. Case Study 4: Toluene Diisocyanate, Diphenylmethane Diisocyanate, Methylene Chloride A company manufactures polyurethane foam by mixing feedstocks in mixing heads and blowing and curing over time. The foam blocks produced are either sold for further processing or fabricated in the adjacent company plant. The Class 3 material toluene diisocyanate (TDI) is a necessary feedstock for slabstock foam production. This material is imported from overseas in ISO containers and is fully contained from delivery until the formation of foam. At this point vapours including very small quantities of TDI are drawn off and neutralised in a scrubber at an efficiency of 90 to 98 per cent. The remaining vapour is drawn through the stack for dispersion in the atmosphere. The current GLC is comfortably met but the proposed DC may not be met. To meet the proposed DC, some combination of increased scrubbing capacity (cost as much as $100,000) and increased stack height and other changes including increased velocity, combined with possible slower foam throughput rates (with corresponding increased running time to maintain production rates), may be required. The concept of MEA is only limited by the funds available for increased scrubbing in this type of system. Another Class 3 material, diphenylmethane diisocyanate (MDI), is used for moulded foams. This material is contained up until foam formation and then scrubbed and dispersed via the stack in the same way as TDI. However the very much lower rate of use of this material compared with TDI, means the proposed DC would already be met. The Class 2 material, methylene chloride, is used to blow the foam during formation prior to being discharged via the stack. The material takes no part in the reactions. Modifications to the stack have ensured the current GLC is met but emitted concentrations would need to be reduced to meet the proposed DC. Improvement could be achieved by stack modification (which would also assist TDI above) and by installing different foam making machinery, which for some grades, would result in making foam more slowly. Such changes may permit compliance for the grades involved. Some foam plants overseas have converted to liquid CO 2 for blowing, but this technology is not suitable for all grades. It represents MEA where it can be applied. Investment of around $2 million would be required to install CO 2 blowing. During the last three years the company has changed from solvent to water based adhesives, eliminating emissions of toluene and small quantities of acetone and hexane. 61

77 EPA comment on case study 4: Once again, it is important to emphasise that any modelling against the new design criteria would only be used as a guide to compliance with the policy, and as one of a suite of tools, and not for assessing compliance per se. The case study again illustrates the value in undertaking a risk assessment to evaluate whether additional - potentially significant - expenditure on control is warranted. Companies are expected to keep abreast of what developments take place in their industry with respect to new processes and approaches to emissions management, and implement them where it is warranted, which must be assessed on a case by case basis. Impacts for Petroleum Storage Depots Associated with Class 3 Indicators A large proportion (perhaps 25 per cent) of emissions of the Class 3 indicator benzene from stationary sources in the Port Phillip Region arise from storage of petroleum products (for example, petrol). With the previous exemption from licensing for benzene in petrol these emissions have not previously been licensed, although emission control equipment such as floating roof tanks was required by regulations made in the mid-1980s. These regulations, which only applied to larger storages in the Port Phillip region, no longer exist. Based on NPI data, there are about 40 fuel storage depots that emit at least 50 kilograms per year (kg/yr) of benzene. The NPI database suggests that there are about eight large to very large storage facilities (including those associated with the two refineries in Victoria), about 15 medium-sized storages and 40 smaller facilities, many in rural and regional Victoria. While the environmental impacts of the larger facilities have been of interest to EPA and the relevant companies for some time, there is little detailed information about the possible impacts and health risks associated with benzene emissions from many of the smaller facilities and hence no reliable basis for determining what additional forms of control, if any, these facilities may require to comply. These impacts and risks are often site specific and influenced by facility size, product throughput, the nature of storage and transfer equipment, facility operations, site location and, very importantly, the surrounding environment. Further work will be undertaken with the industry to establish: the likelihood of problems with ambient levels of benzene in the vicinity of various storage facilities; a threshold above which action would be taken to ensure compliance with the MEA requirement for benzene (this threshold could be based on emission levels, storage capacity or product throughput); the controls and measures required to conform with MEA for both existing and new sources, and design criteria for new sources; and the tools that would be used to ensure compliance. Issues such as these are most easily worked through in an industry-specific PEM that enables 62

78 EPA, the industry and other relevant stakeholders to determine the most appropriate course of action. PEMs can be amended readily to reflect new developments in environmental management in the industry, which is preferable to specifying complex detail in the policy itself. Environmental improvement works for some of the larger facilities are already planned, committed or under discussion with EPA at the present time. The policy revision has not been a principal driver of these outcomes and deliberations. For small to medium-sized facilities, individual facilities will have to be assessed on a case-by-case basis, and identified emission reduction measures will be in proportion to the reduction in risk that would be achieved. Impacts for Licence Fees Associated with Class 3 Indicators The Environment Protection (Fees) Regulations 2001 set the fees that are payable under the Act, including for licensed premises. As Class 1, 2 and 3 indicators are used in determining load based licensing fees for discharges to the atmosphere, any changes to the indicators under the policy have potential fee impacts for industry. Fees for emitting Class 3 indicators are a factor of 100 times greater than fees for emitting Class 2 indicators. Under the draft policy, those premises emitting substance that have been re-classified from Class 2 to Class 3 indicator would have incurred an immediate increase in fees payable. Those premises emitting a new Class 3 indicator would also have incurred fee impacts once they were licensed to emit the substance. Total predicated fee increases arising from the reclassification of Class 2 indicators to Class 3 indicators was in the order of $1.4 million. These impacts would have been shared across approximately 25 premises that are currently permitted under licence to discharge these substances to the atmosphere. The magnitude of these impacts would have varied from premises to premises with the greatest increase for an individual premises predicted to be in the range of $400,000, and the lowest increase less than $100. In addition, there are approximately 28 current licensees who emit more than 50kg/yr of at least one of the new classified Class 3 indicators as a component of their present Total Organic Carbon (TOC) or Volatile Organic Compound (VOC) emissions (Appendix 2). Data derived from the National Pollutant Inventory (NPI) and Port Phillip Region Inventory (PPRI) indicate that the total cost to these licensees would have been approximately $347,000. There are approximately 18 licensed premises that are not presently licensed to emit one or more of the new Class 3 indicators. Data derived from the NPI and PPRI indicate that the total cost to these licensees would have been approximately $50,000. Data derived from the NPI and PPRI show that there are approximately nine unlicensed premises operating within Victoria, which presently emit one or more of the new class three indicators. Assuming the data in the NPI and PPRI is accurate these premises will be required to be licensed. Predicted costs arising from this include costs involved in applying for and obtaining a licence, including any changes required to ensure the premises complies 63

79 with all licence conditions. In addition, licence fee costs of $128,000 for each premises were predicted. In summary, the annual fee costs due to the proposed reclassification of class 3 indicators that would have been incurred by industry under the draft policy were $1,917,000. During consultation on the draft policy, and the fees regulations review being undertaken at the same time, both PACIA and AiG raised concerns about the implications of this, and queried if there could be recognition of the need to plan and prepare for changes under the policy. During discussions it was agreed to amend the proposals and as a result the fee impacts outlined above will not be incurred immediately, and may not be incurred at all, by licensees. The Environment Protection (Fees) Regulations 2001 includes provision for a two-year period of fee relief from the time the policy is made. This period will provide premises with the opportunity to develop a plan and investigate ways to reduce emissions, thereby potentially reducing their eventual fee impacts. In addition, the Regulations include provision for licensees emitting the new Class 3 indicators to enter into a fee reduction agreement with the Authority, thereby further reducing potential fee impacts to their premises. It is anticipated that in coming to such an agreement, a licensee would be expected to meet its emission reduction plans. EPA will be preparing an information bulletin that will outline in more detail the requirements that will be expected before a fee reduction agreement can be finalised. EPA has committed to working with PACIA and AiG on the development of this information bulletin. The provisions in the fees regulations providing fee relief have been complemented by provisions in the policy indicating that premises must prepare a plan outlining what they intend to do to comply with the policy upon classification of a substance as a Class 3 indicator for the first time. In essence, the fee relief provided under the regulations coupled with the potential for licensees to enter into fee reduction agreements with EPA means that there is every likelihood that only a small proportion of this fee impact will actually occur, say $250,000. Existing licensees thought to be emitting new Class 3 indicators currently as a component of a TOC or VOC emission will incur costs resulting from 12 months sampling and monitoring of VOC s and or TOC s to determine exact emission levels of Class 3 indicators, so that licences can be amended appropriately. A statutory declaration verifying these results will also be required. For premises believed to be emitting a new Class 3 indicator for which they are not currently licensed in any capacity, may incur costs relating to monitoring of appropriate stacks under normal operating conditions so that appropriate emission levels for the new Class 3 indicators can be added to the licence. At about $1000 per test analysis, the total cost to industry will be about $30,000. Impacts Associated with Key Class 1 Indicators Existing licensed premises that are major sources of the Class 1 indicators carbon monoxide (CO), nitrogen dioxide (NO 2 ) and total suspended particles (TSP) have been assessed by EPA to identify whether emissions from their current operations are likely to present any significant problems. 64

80 CO is usually emitted with oxides of nitrogen from combustion sources at emission rates of the same order of magnitude. NO 2 emissions are typically only about 10 per cent of total oxides of nitrogen emissions, whereas the design criterion for CO is over 100 times that for NO 2. Therefore for combustion sources, NO 2 is invariably going to be the criterion of greater interest (if it is being managed effectively, then CO should be). Combustion sources are by far the largest sources of NO 2 (and CO). There are about 70 licensed sources of oxides of nitrogen in Victoria with emission limits of 50g/min or more. These larger sources are dominated by the power stations, but there are significant emissions from refineries and the chemical, glass and steel industries. Discussions held with the power stations indicate that they do not believe that they will have any significant problems in complying with the policy. Assessment of significant sources in the chemical, glass and steel industries indicates these plants would not have difficulty complying with the policy either. Similarly, the two refineries in Victoria are expected to comply with the policy, based on licensing and monitoring information currently available. Further emissions testing and modelling by some or many of these premises would be desirable to assess their performance in more detail. Total Suspended Particles, PM 10, and PM 2.5 About 60 sources are licensed to emit 10g/min or more of total suspended particles (TSP). The largest of these sources are the power stations, but they also include refineries, and chemical, aluminium, glass, cement and dairy product plants. EPA has made an assessment of the likely impacts of the policy for these premises, based on emissions and licensing data, and recent testing and modelling and believes that there is likely to be no significant problems with management of emissions of TSP, PM 10 and PM 2.5. Impacts Associated with Key Class 2 Indicators Only four new Class 2 indicators are introduced into the policy (antimony, manganese and compounds, methyl bromide, and wood dust has been divided into hardwood and softwood), excluding PM 2.5 (which is discussed above). EPA has investigated whether there are major sources of either the new indicators or 12 existing indicators with more stringent design criteria, as a guide to assessing whether there are likely to be any premises that will be causing environmental problems that make complying with the policy difficult. Most of the organic substances in this group of 16 indicators do not have industrial uses or applications with significant emissions in Victoria. EPA recognises that some of these substances may be hidden behind licensed emissions of total organic compounds (TOC) or volatile organic compounds (VOC), as these often contain a mixture of unknown organic substances. Further emissions testing by selected licensees may help to understand the components of their emissions in more detail, and to help assess if there is any need for further management of the emissions. There is very little detailed information about sources of respirable (that is, less than 2.5 micron in aerodynamic diameter) wood dust. It is believed that processes or activities that involve sawing, cutting, shaping, sanding or other mechanical or 65

81 abrasive actions will generate at least some quantities of very fine wood dust. No data is currently available on the amounts of such emissions from relevant industries in Victoria (significant sources probably include sawmills, joineries, and furniture, building and timber product manufacturers). It is also thought that management of emissions of respirable wood dust is likely to be principally an occupational health and safety issue, not an external air environment issue. Techniques for managing wood dust emissions are very simple and readily available and affordable. Non-Industrial Sources Although the above discussion only relates to industrial sources of emissions the principles that govern the proposed approaches to emissions management are applicable to other types of sources. Continuous improvement and best practice should be promoted in all areas of air quality management, including the activities of public and private sector organisations, the planning of our cities and towns, the provision of infrastructure, the behaviour of households, and the actions of individuals. For example, in addition to industrial sources of emissions, these principles can and should be applied to: the design and production of a wide range of goods and services, including motor vehicles and other mobile sources of emissions, equipment and appliances, and fuels, solvents and other products which may produce emissions; the activities of the financial, commercial and retail sectors in developing, investing in, marketing and selling goods and services which may generate wastes and emissions; land use, transportation and energy policy and planning; and domestic activities such as home heating, personal transport, and the purchase and use of goods and services. As with the management of emissions from industrial sources, the focus of these applications should be to: avoid and then minimise wastes and emissions wherever practicable; achieve continuous improvement in environmental performance; and increase energy efficiency. The various features of this approach are reflected in the SEPP (Air Quality Management). Not all sources of Class 3 indicators are managed through EPA s licensing and works approval system, nor would it be efficient or cost-effective to deal with all sources in this way. Benzene emissions, for example, are emitted from motor vehicles and service stations (as well as industry) as benzene is a component of vehicle fuels. Licensing of large numbers of these types of sources is obviously not the most cost-effective approach. In many cases, emissions of Class 3 indicators have been managed, either directly or indirectly, through other instruments such as regulations, best practice environmental management guidelines or national standards. This wide range of approaches is 66

82 expected to be appropriate for managing emissions of non-stationary sources of Class 3 indicators into the future as well. For example, benzene emissions from motor vehicles are a product of the benzene content of the fuel. While an Australian Standard is currently the mechanism by which benzene is limited in fuel (at a level of 5 per cent), new national standards will be introduced from 2006 limiting benzene to 1 per cent. In the meantime, individual jurisdictions will have the responsibility to set interim standards that help protect air quality and help facilitate the transition to the lower limits. Also, national vehicle emission standards specified in Commonwealth legislation limit the exhaust and evaporative emissions of hydrocarbons (which include benzene), and indirectly reduce vehicular emissions of other Class 3 indicators such as 1,3-butadiene. New testing requirements for evaporative emissions will be phased in, with new emission standards, during the next five years. The modified tests are expected to be up to 80 per cent more stringent than the current evaporative tests. The former SEPP specifically excluded petrol and liquid mixtures containing 1 per cent or less of benzene from classification as a Class 3 indicator. As such, emissions from a variety of potentially important sources in certain areas, such as fuel storage tanks, may not have been licensed or controlled to the appropriate level. Key Points: Clauses 18 to 23 set out the general requirements for managing emissions, particularly as they relate to industry. These provisions will have significant environmental benefits through the avoidance and minimisation of emissions, including greenhouse gases, and result in improvements in air quality. Benefits may also accrue from the potential for increased production efficiency, and reduced costs for waste disposal, emissions management, energy use and resource consumption. Emissions minimisation and air quality improvement will provide greater opportunities for industrial development, and associated economic and social benefits. In implementing these provisions EPA will work with existing premises to assess what, if any, work is required to be done to upgrade performance, and develop a plan for staged compliance over a period of five years (which will be negotiable depending on the pollutant in question). This will temper any costs associated with premises upgrading to improve their environmental performance, as they will be able to build improvements into their business investment cycles. Implementation of the stringent emissions management requirements for the increased number of Class 3 indicators, will result in substantial benefits by minimising the health risks associated with exposure to these extremely hazardous pollutants. The requirement to reduce emissions of Class 3 indicators to the maximum extent achievable will have additional benefits in comparison with the current requirement of maximum extent achievable by technology, by emphasising a wider variety of techniques and practices for the management of these indicators, rather than just expensive end-of-pipe solutions. 67

83 The potential for costs being incurred to comply with this requirement may be reduced by the emphasis in the policy on a wider range of management options than just technology, such as using risk assessment to evaluate potential emissions and their impacts, and application of other management tools for implementation (for example, the development of PEMs for the emissions management requirements in particular industries). Some premises could incur costs, especially those that are currently causing environmental problems and are not applying the appropriate level of emissions management. There will also be impacts for a small number of currently licensed facilities, which will be required to upgrade their performance as they will be emitting substances that have been classified as Class 3 indicators for the first time. However, the implications in terms of increased fees for these premises will be deferred for a minimum of two years while they develop a plan to implement the new requirement, and possibly longer if they enter into a fee reduction agreement with EPA. Cost incurred to meet the requirements for emissions reduction to the maximum extent achievable will be heavily dependent on the particular circumstances of the premises in question, and it is therefore not possible to generalise about the impact. Case studies done for EPA indicate that technological measures to reduce emissions may be required for some premises. However, these measures may be avoidable if cleaner production processes (which the policy emphasises) are investigated and risk assessments are conducted to evaluate the real risk to human health. Management priorities, programs and measures for tackling the recognised new sources of Class 3 indicators will be chosen to maximise effectiveness and efficiency, and to ensure that any adverse impacts are fairly distributed. General Management of Air Quality Clause 24: Monitoring of Air Quality Clause 24 commits EPA to monitor regional air quality in accordance with the SEPP (AAQ) and for other purposes, and allows EPA to initiate or undertake research or other investigations into regional air pollution. This clause reflects current policy, as expressed in both the SEPP (AQM) and SEPP (AAQ), and existing practice, and no additional impacts are created by these provisions. Clause 25: Air Quality Research Clause 25 commits EPA to encourage, coordinate and monitor research into air pollution and its impacts, in conjunction with others as appropriate. This continues existing practices and no additional impacts are created by the provisions. Clause 26: Emergency Abatement Plan Clause 26 essentially restates the emergency abatement provisions of Clause 41 of the former SEPP (Air Quality Management). It requires EPA to develop, in conjunction with stakeholders, a plan to be implemented in the event of an air quality emergency. An air quality emergency is triggered by the exceedence of alert levels for a few selected air quality indicators. These alert levels were previously specified in Schedule I to the policy and will be specified in a schedule to the new policy in the future as well. The current alert levels are being carried forward without change. This provision will establish a clear plan for the action to be taken in the event of an air quality emergency. 68

84 Key Points: Clauses 24 to 26 set out the requirements relating to activity that generally supports air quality management, including the monitoring of air quality, research into air quality and planning for air quality emergencies. These provisions will enable better management of air quality to take place through the generation of better information and planning. These provisions make no substantive changes to current policy or practice. Management of Local Air Quality Clauses 27 and 28 describe the proposed policy approach to managing local air quality. Clause 27: Local Air Quality Management Clause 27 requires the application by EPA and planning authorities of protocols for environmental management on best practice environmental management, separation distances (where appropriate) and dispersion modelling in assessing new development proposals, and provides for the protection of local amenity from offensive odours and other emissions. These provisions are consistent with current policy and practice, although the existing EPA guidelines on separation distances are currently under review. Clause 27(2) will ensure that planning authorities will give consideration to the PEM for separation distances once it is finalised when assessing proposed development locations such that encroachment of sensitive uses within appropriate separation distances of industry will be prevented. Clause 27(4) indicates that the EPA will work with stakeholders to ensure that the amenity of local communities is protected from emissions of offensive odours, dust and other pollutants. Odour management The management of offensive odours is a major issue for premises that generate emissions that may cause offence, and the people in communities that are affected by those emissions. This was confirmed during consultation and through submissions on the draft SEPP. In the past, EPA has managed issues relating to offensive odour by the application of stringent design criteria for new sources of odorous emissions, and by working with odorous industries and local communities to resolve odour problems from existing sites. This will not change, however there have been some changes in the policy to clarify EPA s position and to bring more confidence that odour problems will be minimised. A number of Class 2 air quality indicators are classified according to their odorous properties. Each of these chemical substances has its own odour characteristics and known odour threshold. The design criteria for class 2 indicators in the former SEPP (Air Quality Management) are based on these odour detection thresholds, where they are more stringent than the toxicity threshold. It is proposed to roll over these design criteria from the former SEPP (Air Quality Management) for an interim period as no odour detection threshold data based on a single odour measurement method is available in the literature. EPA Victoria proposes to derive new odour detection thresholds for these indicators using the Australian Standard method for odour measurement (AS4323.3) and incorporate these in the policy within two to three years. 69

85 In the new policy, Class 2 indicators have been divided into Class 2 toxicity and Class 2 odour indicators for purposes of clarity, where Class 2 odour indicators have design criteria based on the odour thresholds of each individual substance. Odorous emissions may also arise from the presence of a mixture of unidentified substances (such as those from sewage treatment farms and intensive animal industries) in the emissions. These emissions of general odour are not usually hazardous and are defined in the SEPP (Air Quality Management) as unclassified air quality indicators of local amenity and aesthetic enjoyment of the air environment. A design criterion of the odour detection threshold (one odour unit) has been retained for general odours based on protection of amenity. EPA recognises the importance of flexibility in managing issues relating to odour, as there are many factors involved that may vary significantly from one situation to another. The new policy spells out more clearly the use of risk assessment where design criteria cannot be met to allow special circumstances to be considered on a case by case basis. An example of such a risk assessment approach that has led to a different set of criteria for odour from broiler farms is given in the Victorian Code for Broiler Farms published in September The code includes a number of risk minimisation and mitigation strategies that will ensure that the beneficial uses of the environment will be protected. For industries involving intensive animal husbandry, an integrated set of criteria may be applied to ensure the beneficial uses of the environment are protected. The provisions for the design of new intensive animal farming premises set out in the Victorian Code for Broiler Farms have been written into Schedule A of the policy. The Australian Standard method for odour measurement was published in September This method includes good quality control, and trials have shown a significant increase in the reproduction of results. The new method is somewhat more sensitive than the B2 method that has been used by EPA Victoria for a number of years, but comparisons between the two methods indicate that the upper confidence limit of both methods is the same. EPA has adopted the new method, although there will be an interim period where both methods are acceptable to facilitate the changeover. As noted above, EPA is taking this opportunity to derive a set of odour threshold based on one measurement method. This work is expected to be complete within two years, at which time Schedule A will be revised to amend the design criteria. Measurements of odour levels in ambient air still have a high level of uncertainty, therefore EPA will continue to use complaints of offensive odour as a guide to sources of odour. Clauses 27 (5) and 27 (6) reflect the new approach for the assessment and improvement of neighbourhood environmental quality recently introduced into the Environment Protection Act Neighbourhood Environment Improvement Plans. The implementation of this approach, including the initiation of air quality measurements that will be assessed against intervention levels, is currently being worked through in a series of pilot NEIPs. 70

86 These proposals are an extension of EPA s current philosophy and approach to the cooperative management and resolution of local air quality issues and problems, and recognise the importance of involving all stakeholders in these endeavours. The actions and measures required to resolve local air quality problems should be more effectively harnessed with this approach, and there will be considerable benefits in more directly involving affected communities in the development and implementation of NEIPs. Under these proposals, protection agencies may be required to play a greater role in coordinating the development of NEIPs, and implementing them through agreements with other stakeholders and through their own powers and instruments. work with premises with environmental problems on a case by case basis. Clause 28: Modelling of Emissions Clause 28 allows EPA Victoria to require a generator of emissions to air to model those emissions. Modelling of emissions is used during the design phase of a new source to estimate the potential impact of the proposal for assessment against design criteria. EPA Victoria may require modelling of emissions from existing sources to assist with risk assessments associated with site activities, and as an aid in determining the most effective means of reducing emissions. This clause reflects current policy and practice for modelling emissions to air. NEIPs will not be used to target individual premises, such as a factory emitting a specific substance or a farm generating dust. EPA Victoria will continue to Key Points: Clause 27 reflects the NEIP provisions now in the Environment Protection Act 1970 and will provide benefits in the form of the more direct involvement of local communities and other stakeholders in local air quality improvement, and a more formal, efficient and structured approach to the resolution of neighbourhood air quality problems. EPA will continue to apply stringent design criteria to new sources of emissions to protect all residential communities and sensitive land uses from offensive odours, both in country and metropolitan areas, and to help avoid costly retrofitting or even relocation of premises that are not designed to adequately manage emissions. EPA will also continue to manage problems from existing premises by responding to complaints and working with the premises to negotiate a solution acceptable to all stakeholders. The new policy gives greater clarity to odour issues, in particular by specifying the use of risk assessment where design criteria are not met. Clause 28 reflects current practice for the modelling of emissions. 71

87 Management of Air Quality in Control Regions Clauses 29 to 32 present the policy approach to management of air quality in air quality control regions. Clause 29: Establishment of Air Quality Control Regions Clause 29 indicates a new process for establishing Air Quality Control Regions. It is proposed that EPA establish or amend these control regions by publication in the Government Gazette. In the original SEPP (The Air Environment) 1981, two control regions were defined in a schedule to the policy: the Port Phillip Control Region and the Latrobe Valley Control Region. EPA will continue to monitor and amend the boundaries of these regions to ensure that all relevant sources of emissions are included in the respective emissions inventories and subsequent airshed modelling. The boundary of the Port Phillip region has been amended, as part of the current review process, to reflect changes to municipal boundaries and the expansion of urban development, as well as improved knowledge of the atmospheric processes characterising the Port Phillip airshed. In particular, advice from airshed modelling experts from within EPA and from CSIRO indicated that the region needed to be enlarged to take into account the dispersion of emissions from more distant sources, including biogenic emissions from vegetation and soils. The revised Port Phillip region reflects the boundary chosen for the Port Phillip region air emissions inventory (EPA 1998). The same region was adopted as part of the Ambient Air NEPM Monitoring Plan for Victoria, formally approved by NEPC in February The expansion of the Port Phillip Control Region could result in new stationary sources that would previously have been established outside the old control region now being within the new region. Schedule H in the former policy, which has been carried through unamended, specifies emission limits for new stationary sources in control regions that will apply to any new sources in this area for the first time. In practice however, it is considered that any implications for industry would be minimal because: the SEPP (Air Quality Management) now requires best practice across Victoria; the IWMP (Waste Minimisation) 1990 has required the production of wastes to be minimised since being introduced; and the provisions of Schedule H are old and new technology and processes are now used as a general guide when EPA sets licence requirements. During the next few years, the provisions of the former Schedule H will be reviewed and updated as appropriate. The distinction between control regions and other parts of the State will most likely become less relevant from the point of view of setting licence limits. EPA does not envisage the establishment of any additional control regions at this stage. There are no other implications or impacts of this Clause. Clause 30: Air Quality Management in Control Regions Clause 30 allows EPA to require further reductions in emissions (over and above those which may be required by Clauses 18 and 19) for regional air 72

88 quality management purposes, and these requirements may be defined in an Air Quality Improvement Plan or a Protocol for Environmental Management. Clause 20 is not mentioned because no further reductions should be possible for Class 3 indicators that are subject to the MEA requirement. The provision for emission reductions is very similar to Clause 27 of the former SEPP (Air Quality Management), except that the former clause related to reductions greater than the emission limits in Schedule G of the former SEPP (Air Quality Management), rather than the continuous improvement and best practice requirements of the new policy. The outcome of using either of these provisions would, however, effectively be the same, as it is the size and scope of any emission reductions that would determine the actual impacts. There are no new impacts arising from these provisions when compared with the previous equivalent provisions in the former policy. The clause enables action to be taken to improve or maintain regional air quality in the event that there are serious threats to it. Clause 30 allows EPA to seek emissions offsets before approving the development of large new sources in control regions, a provision that was also in the former policy. To accompany this, the clause requires EPA to develop a Protocol for Environmental Management for emissions offsets and emissions trading to address situations where an air quality indicator exceeds or is projected to exceed a regional air quality objective for that indicator. This PEM will clarify the circumstances when such offsets and trading apply and the parameters within which it may occur. One requirement on the Authority is that in considering any proposal for offsets or trading it must be satisfied that the generator of emissions is complying with the policy and the proposal will result in the best overall environmental outcome, not a trade off of emissions from one segment of the environment to another. These provisions will provide clarity in requirements under the policy for, and ensure the best overall environmental outcome arising from, any emissions offsets or trading. Clause 31: Air Quality Improvement Plans for Control Regions Clause 31 provides for the development of Air Quality Improvement Plans for control regions, for which an equivalent provision exists in Clause 18 of the former SEPP (AQM) in the form of management programs for control regions. Although greater detail of the purpose and means of implementation of the improvement plans are provided in the policy, which should improve co-ordination of strategies for improving air quality, there is no substantive difference between the former and new policies in the potential impacts of these provisions. Clause 32: Air Quality Forecasting and Reporting Clause 32 builds on the provisions of Clauses 48 and 49 of the former SEPP (AQM). It requires EPA to make and issue forecasts of regional air quality, whereas the former SEPP (AQM) merely requires the investigation of predictive methods. This clause also commits EPA to provide information and issue reports on air quality to the general public (as in the current policy), and to advise the community on ways in which they can minimise their impacts on air quality. As this clause is consistent with the 73

89 existing policy and conforms with EPA s current activities and practices, no new impacts will arise. Key Points: Clauses 29 to 32 establish the framework for managing air quality on a regional basis, through the establishment of air quality control regions, the development of air quality improvement plans, provisions for managing emissions on a regional basis, and through the forecasting and reporting of air quality. These provisions will have no additional impacts when compared with current policy and practice. Management of Global Issues Clauses 33 and 34 address the need to manage emissions that may have global environmental impacts. Clause 33: Management of Greenhouse Gases Clause 33 provides for the development of a comprehensive strategy to manage emissions of greenhouse gases, and requires generators of these emissions to manage them in accordance with the policy principles and Clauses 15 and 16. This will require applicants for works approvals to demonstrate that they have considered both emissions management and energy efficiency in developing their proposals and preparing their applications. They will also be encouraged to consider the greenhouse implications of their resource inputs and production processes, and the downstream impacts of their products, under the product stewardship principle. Existing licence holders will also be required to examine their processes for opportunities to improve energy efficiency and reduce their greenhouse gas emissions. EPA has developed a Protocol for Environmental Management (Greenhouse Gas Emissions and Energy Efficiency in Industry) to assist in implementing these provisions through statutory approvals and the assessment of development proposals generally. The PEM provides guidance for businesses to achieve compliance with the SEPP (AQM), by giving practical application to its policy principles and requirements as they relate to the management of greenhouse gas emissions and energy consumption. Existing licence holders whose energy consumption results in greater than 100 tonnes of CO 2 equivalent emissions per annum will be required to conduct an energy audit and implement energy efficiency improvements identified by the audit that have a financial payback period of up to three years. Energy efficiency and greenhouse gas abatement will also be a key consideration in the assessment of applications for new works approvals with an estimated energy consumption greater than 100 tonnes of CO 2 equivalent emissions per annum. Further detail regarding actions to be taken by applicants and existing licence holders is detailed in the PEM. The inclusion of the management of greenhouse gas emissions in the SEPP (AQM) for the first time has occurred in response to growing international concerns about the potential impacts of global warming. The Third Assessment Report of the Intergovernmental Panel on Climate Change, released early in 2001, stated there is new evidence that most of the warming that has occurred during the last 50 years is attributable to human activities. 74

90 In November 1998 the Commonwealth and all State and Territory Governments endorsed a new National Greenhouse Strategy (NGS). This strategy is the primary mechanism for meeting Australia s international commitments on this matter. To build on commitments under the NGS, the Victorian Government is currently developing a comprehensive greenhouse strategy. This strategy will review actions already under way, strengthen implementation of NGS commitments and identify opportunities for further action to achieve emission reductions across all activities and sectors and of the community. The Victorian Greenhouse Strategy (VGS) Discussion Paper (released in August 2000) set out the Government s commitment to introduce a requirement for greenhouse and energy issues to be considered as part of applications for EPA works approvals and licences, noting that this would be implemented as part of the revision of the SEPP (AQM). The inclusion of the management of greenhouse gas emissions into the SEPP (AQM) is one of the key actions under the proposed VGS to address greenhouse gas emissions from industry. This initiative has been closely integrated with other measures currently being considered as part of the development of the VGS. There are potential benefits for businesses that introduce technologies and improved production processes to improve their energy efficiency and reduce greenhouse gas emissions, while achieving benefits for the environment. A reduction in emissions will contribute to Victoria s and Australia s efforts towards greenhouse gas abatement. Work commissioned through the development of the VGS estimated that this policy proposal would result in an average saving of between 788 kilo-tonnes and 3283 kilo-tonnes of CO 2 emissions per year, during the period The range reflects a low and high scenario calculated based on different assumptions for energy consumption and energy savings achieved being between 5 and 20 per cent. Other environmental benefits may be associated with this proposal and improvement in energy efficiency may often result in reductions of inputs and other wastes and emissions generated. Much of the emissions savings predicted will be as a result of improvements in energy efficiency and a reduction of energy consumption. It is therefore evident that financial savings will also result from this policy proposal, despite the costs associated with undertaking work required to comply with the policy. Work commissioned by EPA found that the benefits to applicants and existing licensees of considering their energy efficiency and greenhouse gas emissions significantly outweigh the costs. The impacts for applicants and existing licence holders are set out below. New Applicants For new applicants, the analysis estimated the cost of documenting the information required per significant works approval at $3,500 and $2000 for smaller works. This equates to a total direct cost to industry of $185,000 per year, based on the average number of works approvals processed per year. The analysis did not include costs for reviewing or changing designs to improve energy efficiency or for making other changes in accordance with the waste hierarchy, during project development. 75

91 Attention to energy efficiency in the design stage for new or modified facilities is the most cost-effective time to incorporate technologies and practices to minimise energy consumption and greenhouse emissions. Expenditure on this activity will generally pay for itself many times over in a short period. Estimates from Sustainable Solutions suggest that efficiency gains of up to 60 per cent can be obtained with reasonable payback periods. Existing licence holders The impacts vary for existing licence holders, depending on the level of action already taken, the type of activity, and the level of energy usage. The analysis categorised the 1117 current EPA licence holders into 4 categories: Group A: licence holders already meeting requirements; Group B: general industry including waste storage (of which Group A is a subset); Group C: landfill operators; and Group D: sewage, sludge effluent, sludge disposal and livestock saleyards. The analysis estimated that 140 licence holders were already undertaking significant measures that would meet the requirements of the SEPP (AQM) to improve energy efficiency and reduce greenhouse gas emissions through commitments made under the Commonwealth s Greenhouse Challenge program or the Sustainable Energy Authority s Energy Smart Business programs. It is therefore likely that Group A would experience no additional cost but would achieve ongoing savings as a result of the policy proposal. Group B includes all manufacturing processing works but not landfills, sewage, sludge disposal or livestock yards. This amounted to 524 licences of which 140 are considered to already meet the requirements (Group A). Costs estimated for this group are based on business undertaking an energy audit, estimating greenhouse gas emissions, developing an action plan to reduce emissions and reporting requirements. Costs are estimated at $10,000 for the audit, plan and report per licence, equating to $3.8 million for Victorian industry. The analysis commissioned by EPA indicated that as a result of acting on plans developed, licence holders in Group B will easily recoup these costs in energy savings, generally in much less than a year, and often in several months. A report 1 of opportunities for energy savings with paybacks of less than three years in the plastics and chemicals industries in Australia in 1999/2000, involving 23 mid to small sizes operations, identified opportunities to save 13 per cent overall on energy costs, amounting to $3 million per year. The associated greenhouse reductions were 13 per cent, equivalent to 65,000 tonnes per year of CO 2. The savings concentrated on better utilisation of existing services, such as steam, air, water, heating and cooling, and lighting, on service upgrades and on replacing or modifying inefficient equipment such as pumps, fans and electric motors rather than process improvements. Any process improvements available would generally represent additional 1 Greenhouse Gas Reduction and Energy Efficiency in the Australian Plastics and Chemicals Industries, Lindsay Rex for Plastics and Chemicals Industries Association, CASANZ Clean Air and Environment Conference, Sydney, November

92 energy efficiency opportunities. Subsequent studies at more than 20 additional chemicals and plastics manufacturing sites in 2000/2001 have produced similar results. The analysis commissioned by EPA assumed that around half of the opportunities identified above, for example 6 per cent, will be achieved in one to three years for the 381 Group B licence holders. Individual licence holder s annual energy savings might range from 3 per cent to 20 per cent during three years of ongoing effort, which is equivalent to the assumptions made under the VGS analysis. Table 1 sets out energy cost savings likely to be available to Group B sites, with paybacks of less than three years. Many of the opportunities identified would in fact have paybacks of less than one year. For smaller sites, shorter-term annual savings of 7 per cent per year and medium term of 12 per cent are assumed. For medium size and larger sites, lesser figures are assumed as larger operations do not generally have the same potential in percentage terms as smaller sites. Table 1: Energy Cost Savings Achievable by Group B Sites * Site Size Small Medium Larger Annual Energy Cost $100,000 $500,000 $3,000,000 Cost SEPP Proposal (once off) $5,000 $10,000 $18,000 Period (years) Annual Energy Cost Savings 7% 12% 6% 11% 5% 10% Annual Energy Cost Savings $7,000 $12,000 $30,000 $55,000 $150,000 $300,000 * Cost savings shown are expected to be available with a three-year maximum payback. As Group C premises are low or almost zero energy users, opportunities for energy efficiency improvements are limited. However significant levels of methane, a powerful greenhouse gas, are produced by landfills. Estimation of methane emissions from landfills is usually done by a desktop study combined with surface flux testing through to methane testing from bores distributed around a site. There are a total of 122 licence holders in this group. Of these an estimated 30 sites have already estimated greenhouse emissions and some of these have energy recovery systems operating. This leaves an estimated 90 sites. Costs are estimated at approximately $10,000 per site for methane emissions. Individual site costs will vary greatly depending on the certainty and type of information available on the landfills and thus the estimating methods employed. There is potential to generate energy from methane captured, and therefore generate a financial return from methane recovery systems. However, the 77

93 analysis commissioned by EPA did not estimate costs for developing plans to reduce these emissions or of the possible returns from such plans. If methane is recovered and simply burnt, greenhouse emissions would be reduced but there would be no financial return. Group D includes large sewage treatment works to small septic systems and the sludge disposal. Except for a small number of larger sewage treatment works, energy consumption by this group is negligible and thus overall there is not a significant opportunity for energy and greenhouse gas reduction. Many of these sites are likely to fall below the energy threshold requiring action. Some opportunities may exist for reduced greenhouse emissions through energy recovery by burning methane. There are a total of 502 licensees in this group. Energy Management Case Study Inghams Enterprises processes many products including frozen chicken and turkey, fresh and frozen duck and oven ready snacks. From humble beginnings in the 1920s, Inghams is now a multi-million dollar organisation. The Somerville plant of Inghams Enterprises Pty Ltd has installed an innovative refrigeration control system, which has led to significant energy and financial savings. This new system monitors and fine tunes refrigeration, matching the amount of energy required to the load by optimising refrigeration temperatures and pressures. Inghams has also developed an Energy Management System. Installation of this new refrigeration control system and energy management system has led to significant energy savings of 966 MWh/annum, 1340 tonnes of CO 2 /annum, and financial savings of $38,000/annum. Total project cost was $61,800, with a payback period of 1.6 years. Greenhouse Best Practice Case Study For most enterprises, the key to greenhouse best practice will be energy efficiency. Australian Vinyls Corporation won the 2001 Energy Smart Best Manufacturer Award for introducing best practice energy efficiency measures at its Laverton and Altona sites. Measures such as optimising compressed air operations, upgrading heat recovery equipment and improving boiler efficiency have resulted in Australian Vinyls saving more than 14,000 tonnes of carbon dioxide and $540,000 each year. Clause 34: Management of Ozone-Depleting Substances Clause 34 incorporates the current Victorian approach to the management of ozone-depleting substances, including the development of national approaches and the establishment of controls in Victoria over the supply, handling, sale and use of these substances. The inclusion of this clause in the 78

94 policy, which simply recognises the current approach and practice, generates no new impacts. Measures have been under way, both internationally and at the State and Commonwealth level, for a number of years to address ozone-depleting substances (ODSs). This clause requires compliance with policies already in place and any developed in the future. At the international level, the 1985 Vienna Convention for the Protection of the Ozone Layer was established after a decade of comprehensive and intensive scientific research into the causes and effects of ozone layer depletion. The 1987 Montreal Protocol on Substances that Deplete the Ozone Layer provided a detailed framework to implement commitments under the Convention. The Protocol currently covers halons, chlorofluorocarbons (CFCs), carbon tetrachloride, methyl chloroform, hydrobromofluorocarbons, hydrochlorofluorocarbons and methyl bromide. In 1989 a National Strategy for Ozone Protection was endorsed by Australian Governments and the Government of New Zealand. The strategy provides a framework to enable Australia to meet its international obligations under the Montreal Protocol. Under the framework, the Commonwealth Government is primarily responsible for the supply and consumption of ODSs through import, export and manufacture controls. The State and Territory governments are responsible for measures to reduce consumption and emissions of ODSs through controls on the sale and use of these substances. are avoided by improved management practices and the adoption of alternatives. Implementation of the National Strategy in Victoria has been achieved through: the Environment Protection (Control of Ozonedepleting Substances) Regulations 1989; the Environment Protection (Purchase and Sale of Products containing Ozone-depleting Substances) Regulations 1990; and the Industrial Waste Management Policy (Control of Ozone-depleting Substances) There is no direct impact associated with Clause 34 as it requires compliance with any policies or other requirements for ODSs made under the Environment Protection Act All policies developed under the Environment Protection Act 1970 for the management of ODSs have undergone or will undergo a similar assessment of policy impacts where the environmental, social and financial benefits and costs to society are assessed. In order to minimise the risks of ODSs, specific management requirements are necessary to ensure that release of these substances to the atmosphere 79

95 Key Points: Clauses 33 and 34 introduce provisions for the management of greenhouse gases and ozone-depleting substances into the statutory framework for managing emissions to the air environment for the first time. The benefits of the new policy approach to the management of greenhouse gases and energy efficiency are expected to be significant. A reduction in CO 2 emissions between 788 and 3283 kilo-tonnes per annum has been predicted as a result of the new policy provisions. This is a significant benefit to the environment, contributing to Victoria s efforts to address climate change. Benefits are also expected to arise for many developers of new industrial facilities by focusing on energy efficient solutions, with efficiency gains of up 60 per cent possible when designing new facilities. The approach of the policy implementation for existing facilities will be to promote the benefits of cost-effective actions that improve energy efficiency and respond in ways that strengthen their long-term business sustainability. It is expected that only beneficial impacts will occur. No new adverse impacts will arise from the implementation of Clause 33 or 34. Management of Diffuse Sources of Emissions Clause 35: Management of Motor Vehicles and Fuels Clause 35 addresses a number of issues relating to emissions from motor vehicles. A comprehensive approach to the control of emissions from motor vehicles requires action in three general areas: the emissions performance of new motor vehicles how the design and development of new motor vehicles, particularly with respect to their propulsion, emission control and fuel technology, can reduce emissions; the in-service emissions performance of motor vehicles how motor vehicle owners and operators, and the industry that services them, can reduce emissions through better driving, maintenance and repair of motor vehicles; and the overall level of motor vehicle use how the demand for travel by motor vehicle, and hence level of emissions from motor vehicles, can be influenced by such things as integrated transport and land use planning, the development of alternative modes of travel, demand management tools and the implementation of new technologies that facilitate more effective travel (for example, intelligent transport systems) or reduce the need to travel (for example, telecommuting). The various parts of Clause 35 specifically address elements of each of these points. Clause 35(1) reinforces Victoria s commitment to national emission standards and design requirements for new motor vehicles. Clause 35(2) also reinforces commitments to national requirements with respect to fuel 80

96 composition and quality, but also provides for agreement to be reached between the Authority and producers and marketers of fuels to additional initiatives in Victoria, such as reductions in fuel vapour pressure in summer to reduce evaporative emissions. Clause 35(3) simply extends the motor vehicles emissions assessment approach in the existing policy to reflect the current approach to environmental assessment, which is to consider it over whole-of-life. It also explicitly includes emissions of greenhouse gases through the reference to energy efficiency. Clause 35(4) provides for action in a number of areas relating to the use and in-service performance of motor vehicles. Parts (a), (b) and (c) cover the development of information campaigns and courses that provide information to, and develop the skills of, motorists and those in the motor vehicle maintenance and repair industry to enable them to drive, service and repair motor vehicles in a way that reduces emissions. Part (d) commits EPA to developing programs for monitoring emissions from motor vehicles and enforcing statutory requirements for those emissions. This includes the investigation of new technologies for detecting emissions from motor vehicles while in use on the road. Part (f) commits EPA to assessing the viability of inspection and maintenance programs for motor vehicles. Clause 35(5) provides for coordinated planning and action within the Government of Victoria, and in conjunction with other stakeholders, to ensure that options to influence the level of motor vehicle use, and hence emissions, are explored and, where appropriate, implemented. Part (c) commits EPA to promoting alternatives to the motor vehicle, such as public transport, cycling, walking and telecommuting. Clause 35(6) commits EPA to a role in facilitating the uptake of new fuels and transport technologies that have environmental and energy efficiency benefits. This includes new motor vehicle propulsion systems, new fuels and new transport technologies such as intelligent transport systems. The previous SEPP (Air Quality Management) contained a suite of policy clauses relating to motor vehicle emissions that were outdated in their content, focus and approach. There have been significant changes in the national mechanisms and arrangements for developing and introducing new vehicle emissions standards, and new national bodies (such as NEPC, NRTC and MVEC) with key responsibilities in this area have been formed. A new program has been established by the Commonwealth Government for the adoption of European motor vehicle emission standards leading up to This will bring Australia into line with Europe and North America. There have also been some significant developments in the types of issues relating to motor vehicle emissions. For example, due to the introduction of unleaded petrol and reductions in the amount of lead in leaded petrol, lead emissions have been drastically reduced and hence, this is no longer a key issue. Sales of leaded fuels actually ceased in Victoria in While the core issues of new vehicle emissions performance and the composition and quality of fuels and in-service emissions performance of motor vehicles remain as important as ever, the focus of efforts to manage 81

97 emissions from motor vehicles has expanded towards areas such as travel demand management and driver behaviour. The issue of greenhouse gas emissions has also risen to prominence, hence the need to consider greenhouse gases as well as emissions of traditional air pollutants. With the introduction of European motor vehicle emission control standards now a firm commitment over the next decade, a key focus for Victoria in the coming years will be to review the options for improving the performance of in-service vehicles. This work has already commenced under the Port Phillip Region AQIP. Regular servicing of motor vehicles has a variety of benefits in addition to emissions reduction, including reduced fuel consumption costs and increased vehicle reliability. Minimising emissions through travel demand management requires inter-agency coordination to ensure that strategic transport and land use plans take account of air quality outcomes. This applies to strategic planning at a metropolitan-wide level (the Metropolitan Strategy is currently being developed by DOI) as well as regional and local-scale planning. The provisions of Clause 35 are not expected to result in any significant new costs. Clauses 35(1) and (2) reflect current policy and practice largely developed in the national arena, while 35(3) simply develops part of the approach in the existing policy to reflect our current perspective on assessment of vehicle types. Clause 35(4) proposes a range of measures to manage in-service vehicle emissions. The development of training courses and information campaigns relating to vehicle maintenance would be undertaken within current agency budget provisions and would be expected to have only positive impacts. Working cooperatively with other agencies to develop land use and transport strategies to reduce car dependency and promote alternatives to the motor vehicle, will generally have positive impacts. The Department of Infrastructure (DOI) is the lead agency for this work, which is being coordinated through development of strategic land use and transport plans such as the Metropolitan Strategy. The provisions of clause 35(5) seek to ensure that air quality is factored into planning and decisionmaking. Clause 35(6) in itself will not result in any new costs or impacts on external stakeholders. To a large extent, monitoring of new technology and facilitating its uptake in Victoria will be part of national programs. Alternative fuels are currently being assessed in terms of energy efficiency and air quality under the Victorian Greenhouse Strategy. Clause 36: Management of Other Mobile Sources Clause 36 commits EPA to support efforts at the national and, where appropriate, international level to control emissions from mobile sources other than motor vehicles, including aircraft, ships and locomotives. Mobile sources such as aircraft, ships and diesel locomotives are not nearly as significant as motor vehicles in terms of their contribution to overall emissions. However, contributions from ships and jet aircraft are increasing. Emission standards for ships and aircraft are set internationally. If emissions standards were to be set for diesel locomotives, this would need to be coordinated nationally. 82

98 There are no new impacts from this provision. Clause 37: Management of Prescribed Burning Clause 37 provides for the development, in consultation with other agencies and stakeholders, of protocols for environmental management and other measures to manage the impacts of prescribed burning. Prescribed burning is employed on private and public land for fire protection, silvicultural, ecological and agricultural purposes. This includes prescribed burning by public authorities (such as the Department of Natural Resources and Environment and the Country Fire Authority), local government and community based fire brigades as well as by private land managers (for example, farmers and forestry companies). Prescribed burning is employed as an essential fire protection tool to help reduce the risk of destructive bushfires, for post harvesting re-establishment in agricultural or forestry enterprises, and for maintaining the health, vigor and diversity of natural ecosystems. Fuel reduction burning is a very wide spread activity in rural Victoria in summer and autumn, primarily to achieve fire hazard reduction for farms, townships, forests and parks. The smoke arising from this may adversely affect air quality in urban and populated regional areas, especially in autumn when fuel reduction programs coincide with stable weather patterns. The contribution from agricultural waste burning at this time of the year is also significant. About half of the annual fuel reduction activity for fire prevention is undertaken during early to midautumn in country areas by private landowners. Smoke from burning can affect people s amenity by reducing visibility and in some situations may affect the health of sensitive members of the population. Concerns about the impacts of smoke arising from fuel reduction burning, the burning of crop residues and other burning activities were raised in submissions and during consultation on the draft SEPP, particularly in the north-east and south-east of Victoria. The timing of prescribed burning was also raised during consultation, as burning in early autumn can coincide with the Easter holiday period. Concerns about the impact this has on tourism in areas affected by smoke were expressed. The importance of fuel reduction burning to reducing the risk of wildfires and the value of burning for agricultural purposes were also raised during consultation with communities. NRE has published a Code of Fire Practice for Fire Management on Public Land that establishes clear planning, operational and environmental requirements in relation to fire for the one-third of Victoria that is public land. In addition, NRE is developing sophisticated techniques for smoke trajectory and dispersal modelling in cooperation with the Bureau of Meteorology. This will assist in predicting potential smoke impacts arising from proposed burning operations. The PEM process provides a collaborative mechanism for identifying cost-effective steps to minimise the impacts of prescribed burning on air quality. EPA will work with stakeholders involved in prescribed burning to scope the practicability of a PEM, share knowledge, identify information needs and develop practical options for better managing the impacts of prescribed burning to improve air quality without compromising safety from bushfires, healthy eco-systems and important land management objectives. 83

99 Measures to be considered in a PEM, and through implementation mechanisms such as the Port Phillip Region AQIP, include enhanced forecasting and increased monitoring of air quality, better communication with the public and more effective liaison between the EPA and fire authorities to identify days of high pollution potential during periods of prescribed burning. More information on the extent and type of prescribed burning undertaken across Victoria, together with data on emission characteristics, is essential for formulating better management options and building on existing arrangements and developments in such areas as air quality prediction and smoke modelling technology. EPA will also work with the relevant organisations to develop and promote practical alternatives to prescribed burning where alternatives can demonstrate equivalent benefits, and on ways of increasing the capacity of land owners to make informed decisions on prescribed burning to minimise impacts on air quality. Clause 38: Management of Waste Burning Clause 38 addresses the burning of waste in the open and in incinerators. The policy states that the burning of waste in the open must be conducted in accordance with council local laws. In setting council local laws and conditions set under those laws, a council must have regard to the policy. The policy further states that the burning of industrial waste in the open is not permitted without written approval from EPA. The burning of waste in the open purely for convenience is inconsistent with the aims, principles and intent of the policy. This is especially so where practicable alternatives that emphasise higher elements of the wastes hierarchy (for example, recycling) are available. Even where a waste cannot be recycled or put to another purpose, disposal through appropriate waste management options (such as taking it to a licensed landfill or transfer station) is preferable to burning it in the open in most instances. The open burning of waste that does occur can cause air quality problems such as creating a nuisance or reducing visibility. In the Port Phillip Region, domestic waste burning is now a less significant source of emissions than it was in previous decades. Local councils have banned domestic waste burning in much of metropolitan Melbourne. A model by-law developed by EPA formed the basis of many by-laws implemented by municipalities. Domestic waste burning that does occur is on the urban fringe and rural hinterland, and is driven by fire hazard reduction needs and the absence of waste collection services. Given the success municipalities have had in controlling domestic waste burning in much of metropolitan Melbourne, and the local circumstances that often influence open burning, it is appropriate to make more explicit the leading role local councils have in making these decisions. Local councils are in the best position to determine local needs and aspirations in regard to this issue, and monitor the implementation of any local controls. This arrangement essentially makes explicit existing settings, in which local councils are the main bodies responsible for controlling the open burning of 84

100 waste. It will provide the flexibility for local circumstances to be taken into account. Industrial waste has great potential to contain hazardous materials. It is inappropriate for industrial waste to be burned in the open or in any other way that has the potential to result in hazardous emissions being generated, unless it is carefully controlled. Having the ability for EPA to control open burning of industrial waste provides the safeguard the community needs that inappropriate activity will not take place. Clause 39: Management of Solid Fuel Heaters Clause 39 proposes a management framework for the manufacture, use and operation of solid fuel heaters. It reinforces compliance with standards for wood heaters manufactured and installed in Victoria as specified by the Authority or made under the Act through other statutory mechanisms. The clause also outlines EPA s intentions to investigate measures, including incentives that will discourage reliance on non-compliant domestic solid fuel heaters and open fireplaces. EPA will also encourage conversion from non-compliant wood heaters to those that comply and are energy efficient. EPA also intends to conduct information and education campaigns on the correct installation and operation of wood heaters, the selection and storage of fuel, and the potential impacts of wood heaters on air quality. The impact of wood combustion on air quality is a significant issue. Domestic wood combustion contributes about 60 per cent of PM 10 emissions and 68 per cent of PM 2.5 emissions in the Port Phillip Region in the cooler months of the year. It also contributes to emissions of other pollutants including CO and a number of air toxics. EPA received submissions confirming that the impact on air quality of wood heating is an important issue for the community, and receives complaints every year over the cooler months about the impacts of smoke from solid fuel heating, and requests to take further action to manage emissions from this source. Despite the adverse impacts of wood smoke and support for restricting their use in submissions received, the use of wood heaters is an important and popular form of heating for the Victorian community as it is relatively cheap and wood heaters, if run correctly, are an efficient form of heating. The Sustainable Energy Authority estimates that wood heating costs $250 per annum, once the wood heater is purchased, making it one of the cheapest forms of heating. Wood heaters compliant to AS/NZS 4013 have markedly lower emission rates than non-compliant wood heaters and open fires. EPA therefore intends to develop an industrial waste management policy for solid fuel heating (IWMP) that will require all heaters manufactured to comply with the relevant standards. These provisions will help improve air quality through education and incentive programs that are aimed at improving operational practices, reducing reliance on wood heaters and encouraging changes to more efficient, less polluting sources of heat. This should also reduce the burden on local councils responding to complaints from residents about the impacts of wood heaters in neighbouring homes. With improved operating practices through 85

101 information and education campaigns, there should be a reduction in the incidence of wood smoke pollution and the resulting community complaints. Clause 40: Management of Large Line and Area- Based Sources of Emissions Clause 40 provides for the development of protocols for environmental management to assist in assessing and managing the impact of emissions from line and area-based sources, including roads and mining operations. The PEM will identify the types of assessment required to ensure that the beneficial uses of the policy are protected. The PEM will also set out relevant criteria for assessment of such operations including design criteria and approaches to modelling. Some operations, such as road construction, are transitory by nature (that is, they are not established permanently in a location) and as such have special characteristics. The provisions of Clause 40 require these special characteristics to be taken into account in the development of guidelines for putting in place the best practicable measures to control emissions. There was strong support both from industry, especially the mining industry, and other government agencies for the development of PEMs for these types of operations. A PEM for mining and extractive industries will be developed in 2002 in consultation with other government agencies, the Victorian Chamber of Mines and Extractive Industries Association. A PEM for the assessment of new road proposals will also be developed in Clause 40 should provide more certainty for industries and activities in this category, and the communities that these industries and activities may impact on, by providing greater clarity as to how the provisions of the policy will apply in their circumstances. Key Points: Clause 35 sets out a comprehensive suite of provisions for managing emissions from motor vehicles. Many of the measures in Clause 35 reflect and reinforce action that is being undertaken through national fora, such as NEPC and NRTC. Other measures reflect and reinforce action that is being undertaken at the State level, such as the development of the Metropolitan Strategy. The other measures relate to programs EPA is currently running or will initiate. With respect to the measures occurring in concert with established national and State activity, Clause 35 will have no additional impacts. The measures to be implemented by EPA will have a variety of beneficial impacts, including reduced vehicle emissions, improved reliability and, in particular, the decreased cost of running passenger vehicles, and encouraging more efficient use of transport systems and infrastructure. Clause 36 commits EPA to monitor and, where appropriate, support national and international measures for the control of emissions from mobile sources other than motor vehicles. Clause 37 provides for the introduction of cooperatives approaches to managing the impacts of prescribed burning on air quality, without compromising the management objectives of prescribed burning. The cooperative 86

102 approach to the development of measures to manage the impacts will ensure that cost-effective solutions are implemented. Clause 38 reinforces the importance of council local laws in controlling the burning of waste in the open, which is consistent with current practice that has proved effective in areas such as metropolitan Melbourne. More explicit requirements for the control of the burning of industrial waste in the open will reduce the impact of this unnecessary practice, although provision remains for EPA to enable it to occur. Clause 39 will ensure that people who use domestic solid fuel heating are encouraged to use their heaters correctly, upgrade to compliant wood heaters if possible and minimise the impact of their heating without compromising their ability to heat their homes by the method of their choice. Clause 40 will enable the means of assessing and managing the impacts of large line and area-based sources to be worked out with stakeholders in a cost-effective manner. PART IV DEFINITIONS This Part provides definitions and interpretations of terms used in the draft policy, and has no direct impacts. 4.2 State Environment Protection Policy (Ambient Air Quality) Three of the ambient air quality objectives in the SEPP (Ambient Air Quality) have been reviewed because they were incorporated in that policy without review when it was declared in February These are the objective for visibility reducing particles and the two 8-hour objectives for photochemical oxidants (as ozone). Prior to the declaration of this policy, these objectives were contained in the SEPP (The Air Environment), and have not been revised since that policy was made in The other objectives in the SEPP (Ambient Air Quality) are drawn from the 1998 National Environment Protection Measure for Ambient Air Quality, which was developed by Australian Governments after a comprehensive review of the issues and extensive consultation with stakeholders. Objective for visibility reducing particles The current objective for visibility reducing particles in the SEPP (Ambient Air Quality) is that local visual distance should not fall below a one-hour average of 20km on more than three days per year. This objective was established for aesthetic purposes (that is, to protect the visual appearance of the atmosphere), and not for health protection. The SEPP (Ambient Air Quality) contains additional health-based objectives for particles. Local visual distance is determined by measuring the light scattering characteristics of the air with an instrument called a nephelometer. Monitoring data for the Port Phillip Region reveals that this objective was not met on more than 100 days per year during the early 1980s, reducing to 20 to 40 days per year during the 1990s. 87

103 Although its basis is necessarily subjective, the impact of visibility reducing particles on people s amenity is the subject of complaints received by EPA. Visibility is the primary means by which the community judges whether or not air quality is good. As such, this objective is still considered to be appropriate and relevant to air quality in Victoria. Also, given the improvement that has been observed over the past decade and the expectation of further reductions in future emissions of fine particles, the objective would appear to be both realistic and ultimately attainable. This objective has been retained in the SEPP (Ambient Air Quality) at the same value. Objectives for photochemical oxidants Air quality management for the purpose of protecting vegetation has occurred but has tended to be local in nature reflecting the emissions from certain industrial processes (for example, fluoride). In addition to the health based objectives, the 1981 SEPP (The Air Environment) included objectives for ozone based on the protection of vegetation. Two 8- hour average objectives (0.05 and 0.08 parts per million) were established in the SEPP (The Air Environment) under the original policy scheme of Acceptable and Detrimental Levels for ambient air quality indicators. Exceedances of three and zero days per year respectively were allowed at these two levels. The purpose of these objectives was to protect vegetation from the adverse effects of photochemical pollution. The 8-hour objective of 0.08 parts per million (ppm) is exceeded in the Port Phillip Region on 10 to 20 days per year, a situation that has not improved much over the last decade. 1-hour objectives for photochemical oxidants were established (also at Acceptable and Detrimental Levels) in the original policy for the protection of human health. However, following adoption of the NEPM for Ambient Air Quality, the SEPP (Ambient Air Quality) contains a 1-hour objective (0.10ppm) and a 4-hour objective (0.08ppm), both for health protection. The goal associated with these objectives is that by 2008 there will be no more than one exceedence per year. The 8-hour oxidant objectives retained from SEPP (The Air Environment) have been reviewed to assess whether they are still necessary and useful for the protection of vegetation. A detailed statistical analysis of 20 years of historical monitoring data for Melbourne shows that, whenever 4-hour average ozone levels exceed 0.08ppm or 1-hour levels exceed 0.10ppm, 8-hour levels exceed 0.05ppm. A 4-hour level of 0.08ppm is approximately equivalent to an 8-hour figure of 0.067ppm, while a 1-hour level of 0.10ppm is equivalent to an 8-hour figure of about 0.07ppm. In light of this, it would be appropriate to retain the 8-hour objective of 0.05ppm if it is still considered relevant and necessary for vegetation protection. However, this objective was adopted nearly two decades ago and was based on findings from other countries for types of vegetation that are now not considered to be very relevant to the Australian situation. Reliable data of more relevance to this issue in Australia have not become available in the intervening years. 88

104 As such, both objectives have been removed from the SEPP (Ambient Air Quality), as they do not provide a reliable or justifiable basis for protection of Australian vegetation from photochemical pollution in Victoria. If information becomes available that is relevant to Australian vegetation EPA will revisit this issue. Assessment of the impacts of the policy variations As the impact of reduced visibility on people s enjoyment of the environment is a source of complaints received by EPA the objective for visibility reducing particles will still be a useful and relevant indicator of air quality for the community. Measures to meet this objective are part of the general program for air quality improvement, so there are no specific costs associated with retaining this objective. Because of concerns about the relevance and usefulness of the two objectives for protection of vegetation, no strategies or programs have been developed or implemented for this purpose in Victoria. Therefore, there are no impacts envisaged from the proposal to remove these objectives from the SEPP. 89

105 5 SUMMARY OF IMPACTS The 1981 SEPP has helped to drive significant improvements in air quality in Victoria during the last 20 years. Despite these improvements, air pollution is still of concern to many Victorians and recent studies show that air pollution has an impact on peoples health in Melbourne. The pressure on our air environment is only expected to increase as Victoria s economy and population base continues to grow, particularly in Melbourne and other major urban centres. In this context, the proposed variation to SEPP (Air Quality Management) retains the successful general approach of the 1981 SEPP and updates it in a number of important ways to ensure continued improvements in air quality in Victoria. In particular, the proposed variations update the 1981 policy framework to ensure that air quality management in Victoria reflects the: improved scientific information that has become availa ble during the last 20 years, including improved knowledge about the health impacts of various pollutants; a variety of factors to reduce air emissions. The SEPP has been updated to recognise and capitalise on the multiple factors that can drive air quality improvements. Furthermore, the SEPP provides considerable flexibility to manage air emissions from a variety of sources on a case-by-case basis. In impact assessment terms, this means that it is not possible to cleanly attribute benefits and costs to the SEPP variation. For example, EPA cannot argue that all the benefits from reduced industrial air emissions flows from the adoption of the SEPP. Similarly, it is not possible to specify that all the costs of industrial emission actions can be attributed to the SEPP. The summary of impacts table below provides an overview of the key impacts of varying the SEPP (Air Quality Management). The variation to SEPP (Ambient Air Quality) will have no impacts as the two 8-hour ozone objectives for the protection of vegetation that are being removed were based on information that is no longer considered to be relevant to Victoria. changes in industry practices during the last 20 years; and emergence of important global air quality issues, such as global warming and ozone depletion, that were little understood in As explained in Chapter 4, there are a variety of factors that affect the behaviour of people and organisations that generate air pollutants. For example, while in 1981 most companies may have been solely motivated by a desire to comply with air quality laws, many companies are now motivated by 90

106 BENEFITS COSTS Reduced incidences of asthma, cardiovascular disease and respiratory diseases. Enhanced emphasis on diffuse (non-industrial) sources of air emissions and improved mechanisms for addressing diffuse sources of emissions, in particular intervention levels for dealing with local air quality hot spots. Greenhouse gas emission reductions and financial saving from consideration of energy efficiency in works (ranging from $7,000 per annum for small firms to $300,000 per annum for large firms and savings of CO 2 emissions of between 788 kilotonnes and 3,283 kilo-tonnes). Package of measures of $2.65 million to assist industry to improve energy efficiency and reduce greenhouse gas emissions. New tools for industry such as Maximum Extent Achievable (MEA) emissions control, protocols for environmental management, and risk assessment to help industry manage its emissions. Improved management of Class 3 indicators (the most hazardous pollutants - those that are carcinogenic, mutagenic, teratogenic, highly toxic or bioaccumulate). A small number of premises are likely to incur costs to improve their emissions management performance. Costs will vary on a case-by-base basis according to the specific emissions management improvements required. A smaller number of premises are likely to incur costs (in the order of $1000) to assess their emissions to check if they contain a new Class 3 indicator. Increased EPA licence fees of approximately $250,000 for class 3 indicators. 91