Policy Update – July 2022

Cost of compliance project

Since the last update, the consultants delivered the final report for this project, and on 27 June 2022 it was sent to Chairs and Managing Directors.  The report has also been provided to members of the Working Group who supported the project, and members of the sector’s Procurement Working Group.

Practical guidance documents to support the implementation of EPA revised guideline for water recycling

Since the last update, the final workshop for this project, which covered the drafting of an auditing guidance document, was held on 15 June 2022.

The consultants are now preparing draft documents, based on the outputs and feedback obtained over the three workshops, for industry review and comment, prior to their finalisation.

Carbon Offsets project

Phase One the Carbon Offsets project has been completed.

Phase One was based on confirming whether the potential supply of Australian Carbon Credit Units (ACCUs) in Victoria is able to meet the Victorian water sector’s demand for carbon offsets, and if there is a gap in the supply of ACCUs, what actions may need to be taken to generate a wider supply or, alternatively, bring this gap to the attention of policy makers.  Additionally, Phase one also aimed to identify the potential price point for ACCUs, and if this is an appropriate price point for the sector.

Phase One confirmed:

• Over the longer term, the potential future supply of ACCUs in Victoria can meet the needs of the sector but it requires active effort to facilitate and realise the sector’s desired outcomes.
• The expected price point for ACCUs using different approaches including purchase on the spot market, through long term offtake agreements and direct investment varies significantly, with the lowest potential costs being via direct investment.
• There is a clear benefit for adopting a collective approach to meeting the sector’s ACCU needs.

The results of this phase of the project were presented to Managing Directors on Wednesday 29 June 2022, with the view of seeking a decision as to whether the project would proceed to Phase Two A.

Phase Two A aims to confirm the benefits of a collective approach, the governance needs of the delivery model and that the water corporations’ collective needs can be met at the portfolio and project level.

At their meeting, the Managing Director endorsed proceeding Phase Two A.