NSW Environmental Protection Agency NSW Government
 

Requirements for agricultural licensees

Information on how the EPA’s climate change requirements apply to agricultural licence holders.

The NSW EPA’s climate change requirements apply to businesses that hold environment protection licences under the NSW Protection of the Environment Operations Act 1997 (POEO Act). These requirements are designed to improve transparency, support better management of greenhouse-gas emissions, and provide the EPA with information to develop targeted sector guidance and support.

The EPA licenses intensive livestock and agricultural processing activities, including ‘livestock accommodation’ (e.g. poultry, piggery, dairy and feedlot), ‘livestock processing’ (e.g. slaughtering and meat manufacturing), and ‘agricultural processing’ (e.g. grape processing).

Definitions for these activities are set out in Schedule 1 of the POEO Act. The EPA does not regulate grazing livestock operations.

Agricultural emissions include methane, carbon dioxide and nitrous oxide from livestock, crops, horticulture and fish production, agricultural soils, and associated energy and fuel use.

Requirements apply to some agriculture businesses

The climate change requirements only apply to premises that already have an environment protection licence and emit over 25,000 tonnes per year of CO2-e of scope 1 and scope 2 emissions in any of the previous three financial years.

Impacted licensed premises whose greenhouse gas emissions are expected to fall below 25,000 tonnes of CO2-e scope 1 and 2 emissions per year for the next three financial years are not required to meet these requirements.

The 25,000 t CO2-e threshold is calculated based on the premises’ emissions and includes any on- premises emissions abatement. A premises is the location to which the environment protection licence applies (usually defined in section A2 of the licence).

Agriculture licensee responsibilities

Under the requirements, licensees will need to:

  • Submit an annual climate change report on their emissions to the EPA by 31 March each year, with the first submission due to the EPA by 31 March 2027.
  • Submit a report to the EPA estimating their scope 1 and scope 2 emissions for each of the next five financial years (a five-year rolling forecast). The first submission is due to the EPA by 31 March 2027, and future reports must be submitted every three years
  • Publish a Climate Change Mitigation and Adaptation Plan (CCMAP) by 31 August 2027. It should be updated by 31 March 2030, then updated again at least every three years.

Further details on each requirement can be found in the EPA’s Emissions Reporting and Climate Change Mitigation and Adaptation Plans guidance document. 

Emissions to include in estimates

Licensees must estimate their scope 1 and 2 emissions to determine whether they meet the requirements threshold, to include in their annual emissions report, and to include in their CCMAP. Scope 3 emissions can optionally be included in the CCMAP. 

The NSW EPA’s climate change requirements refer to scope 1, scope 2 and scope 3 greenhouse gas emissions, as defined under the National Greenhouse Accounts Factors.  

Scope 1: Direct emissions 

Scope 1 emissions are generated within the licensed premises’ boundary. They may include:

  • enteric fermentation
  • manure and effluent management
  • field burning of agricultural residues
  • fuel use in on-site equipment
  • on-site feed production
  • liming and urea application.

Relevant agricultural emissions sources are identified in Chapter 5 of the Australian National Greenhouse Gas Inventory.

On-site abatement activities, such as on-site carbon sequestration via tree planting, are reflected within scope 1 emissions accounting. Offsets generated off-site are not included.

Contractual or ownership arrangements do not change the emissions boundary of the licence. Emissions occurring within the licensed premises must be included even where aspects of the activity are owned or controlled by another entity; for example, where birds at a licensed poultry farm are owned by a third party.

Scope 2: Indirect energy emissions 

Scope 2 emissions arise from purchased electricity consumed at the licensed premises (for example, electricity purchased to power heating, cooling or steam). 

Scope 2 emissions factors – standard values used to estimate the amount of greenhouse gas emitted from a specific activity – are available in the National Greenhouse Accounts Factors report.

Scope 3: Other indirect emissions 

Scope 3 emissions are not required but may be included in the CCMAP if the licensee wishes. Scope 3 emissions include indirect upstream and downstream emissions.

  • Upstream emissions are those from third parties that directly relate to the licensee, such as purchased inputs including emissions from purchased livestock; the production of feed and supplements, fertiliser and chemicals; and the extraction of fossil fuel for electricity and fuel.
  • Downstream emissions (post-farmgate) are those associated with the processing, consumption and disposal of the agricultural commodity.

How to estimate emissions

Licensees are responsible for determining whether their emissions meet the 25,000 t CO2-e threshold. In many cases, licensees will first need to estimate their emissions to determine whether the climate change requirements apply.

How emissions are estimated will depend on whether there is a suitable method available for the activity under the National Greenhouse and Energy Reporting Scheme (NGERS) legislation.

  • If there is a suitable NGERS method available, emissions must be estimated in accordance with that.
  • If there is no suitable method available, the licensees must use
    • emissions factors contained in the latest National Greenhouse Accounts Factors,  or
    • a publicly available methodology (for example the Greenhouse Gas Protocol or Full Carbon Accounting Model),  using 100-year global warming potentials for each greenhouse gas when calculating CO2-e.

NGER scheme legislation means:

  • the National Greenhouse and Energy Reporting Act 2007
  • the National Greenhouse and Energy Reporting Regulations 2008
  • the National Greenhouse and Energy Reporting (Measurement) Determination 2008.

The scope 1 and scope 2 emissions of an agricultural premises will depend on factors that include:

  • animal feed and type
  • how long animals are housed on-site
  • electricity use and source
  • fuel usage
  • mitigation measures in place
  • manure and effluent management practices.

Indicative stocking capacities that may approach or exceed the threshold include: 

  • cattle feedlots: ~20,000 head of cattle
  • dairy facilities: ~5,500 head of dairy cattle
  • piggeries: ~40,000 standard pig units or ~4,000 sows
  • chickens: ~5,500,000 birds (per batch) for chicken meat farms or ~2,500,000 birds for egg layer farms.

These are indicative only. Licensees approaching these capacities should estimate their emissions to determine whether the requirements apply.

For agricultural processing facilities, major emissions sources include:

  • stack emissions
  • wastewater treatment
  • electricity use
  • fuel use in stationary and mobile equipment. 

This guidance will be updated as additional tools and methodologies become available for impacted agriculture licensed premises.

How to set emissions goals

Licensees must include absolute emissions goals for 2030, 2035 and 2050 in their CCMAP.

An emissions goal:

  • must be expressed in absolute terms rather than intensity
  • does not have to be an emissions reduction goal
  • may reflect stable or increasing emissions where reductions are not currently feasible due to technical or operational constraints
  • may include offsets
  • does not need to be expressed at the individual premises level if multiple NSW licensed premises are covered by a single CCMAP.

The EPA expects emissions goals to be broadly consistent with the NSW emissions reduction targets under the Climate Change (Net Zero Future) Act 2023 or NSW Government–developed industry-specific emissions reduction trajectories.

However, we recognise that different sectors will have varying levels of technology available to decarbonise in the short, medium, and long term. If the goals do not align with the overall NSW targets, or a NSW Government–developed industry-specific trajectory, the licensee must explain why.

We recognise that emissions trajectories may be ‘lumpy’ and may depend on the implementation or availability of cost-effective technologies across different time horizons.

How to choose mitigation measures

As part of developing their CCMAP, licensees must explain how they are managing their greenhouse-gas emissions. Mitigation measures for agriculture may include:

  • improving livestock productivity
  • optimising feed strategies
  • improving manure and effluent management
  • reducing fuel and electricity consumption.

We recognise that there are limited options for reducing enteric methane in ruminants, particularly where maintaining food and fibre production is a priority.

The CCMAP is a planning and transparency requirement. Licensees are required to describe the mitigation measures they are implementing or considering, but they are not required to commit to measures that are not technically or commercially feasible, and neither are they required to achieve emissions reductions where reductions are not feasible.

Guidance and support

Guidance on choosing mitigation measures suitable for your premises, and on estimating your premises’ emissions, is available from:

  • NSW Department of Primary Industries and Regional Development (DPIRD)
  • Australian Government agricultural emissions resources
  • industry peak bodies.

The Climate Change Licensee Requirements are planning and reporting requirements. They do not limit or restrict participation in the Australian Carbon Credit Unit (ACCU) scheme or other voluntary emissions reduction programs.

Financial support

Industrial Decarbonisation Initiative

Agriculture licensees will be able to apply for a grant for developing their CCMAP. We are working with NSW DCCEEW to deliver a $5M grants program. Details will be available soon.  

Resources

These tools reflect the calculations contained in the National Greenhouse Gas Inventory, consistent with the calculations the EPA will accept for its licensees’ greenhouse-gas emission estimates.

NSW Government

University of Melbourne – Primary Industries Climate Challenges Centre

Agriculture Innovation Australia

Meat and Livestock

Dairy Australia

  • Australian Dairy Carbon Calculator

Australian Pork