Carbon Emissions Mitigation Offsets


Climate change is one of the most significant challenges facing the world and Victoria in the 21st century. Victoria is already experiencing warmer temperatures and reduced rainfall due to climate change. Climatic changes have serious consequences for the water industry, creating risks to water supply, infrastructure, and communities.

The Victorian water industry has a significant role to play: sewerage collection and treatment generates large volumes of direct emissions, and the movement and treatment of water and sewage uses large amounts of emissions-intensive energy. Collectively, the water industry produces around one quarter of all Victorian Government emissions in Victoria.

Victoria has a legislated target of net zero emissions by 2050, and the Victorian Government has designated the water industry as a leader in reducing emissions. The Minister for Water has set out specific obligations to reduce emissions for water corporations in the Statement of Obligations (Emission Reduction) (SoO-e).

The industry is developing innovative approaches to prevent and reduce emissions, including facilitating cross-sector and inter-sector partnerships to maximise economies and benefit realisation. However, due to their extensive direct emissions, water corporations will also need to use carbon offsets to meet their emissions reduction obligations in the short to medium term.


  • Water corporations achieve genuine carbon neutrality in a cost-effective way without compromising affordability

  • The water industry is recognised as a leader in emissions prevention and reduction

Position Statement

  1. A revised version of the SoO-e should provide:
    • a clear net zero emissions target to allow sufficient time for water corporations to achieve this goal efficiently, and
    • access to all Victorian carbon offsets that are available under the Climate Active Carbon Neutral Standard (CACNS).
  2. Victorian Government support for shadow carbon pricing would help to achieve cost-effective emissions reduction and long-term investment planning.
  3. Broader engagement with Victorian communities to understand their willingness to pay for emissions reductions is needed to support emissions reduction efforts.

Key Stakeholders

  • Essential Services Commission (ESC)

  • Department of Environment, Land, Water and Planning (DELWP)

  • Department of Treasury and Finance (DTF)

Underpinning Principles

  • Serving our customers and communities (community benefit)

  • Responsible environmental stewardship (sustainability, intergenerational equity)

  • Good governance (efficiency)

  • Leadership and innovation (best practice)