Port Waratah Coal Services Terminal 4 Project Review Report...Port Waratah Coal Services Terminal 4...

COMMISSION SECRETARIAT Level 13, 301 George Street SYDNEY, NSW 2000 GPO BOX 3415, SYDNEY, NSW 2001 TELEPHONE (02) 9383 2100 FAX (02) 9299 9835 [email protected]

Port Waratah Coal Services Terminal 4 Project Review Report

Mr Paul Forward (Chair) Mr Joe Woodward PSM Mr Brian Gilligan 1 December 2014

Port Waratah Coal Services Terminal 4 Project PAC Review Report© State of New South Wales through the NSW Planning Assessment Commission, November 2014. NSW Planning Assessment Commission Level 13, 301 George St Sydney NSW Australia Telephone: (02) 9383 2100 Email: [email protected] ISBN 978-0-9871563-8-9 Disclaimer While every reasonable effort has been made to ensure that this document is correct at the time of publication, the State of New South Wales, its agencies and employees, disclaim all liability to any person in respect of anything or the consequences of anything done or omitted to be done in reliance upon the whole or any part of this document. The NSW Planning Assessment Commission advises that the maps included in the report are to give visual support to the discussion presented within the report. Hence information presented on the maps should be seen as indicative, rather than definite or accurate. The State of New South Wales will not accept responsibility for anything, or the consequences of anything, done or omitted to be done in reliance upon the mapped information.

Planning Assessment Commission Review Report 2014 Port Waratah Coal Services Terminal 4 Project

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Executive Summary

The Planning Assessment Commission (the Commission) has been directed to review the Port Waratah Coal Services (PWCS) Terminal 4 Project and its supporting studies. In particular, the Commission has been asked to assess the merits of the project, paying particular attention to the potential noise and air quality, traffic, biodiversity and contamination impacts; and recommend any appropriate measures to avoid, minimise and/or offset these impacts.

The Commission to undertake the review was constituted by Paul Forward, Brian Gilligan and Joe Woodward (PSM). The Terminal 4 Project is a proposal for a fourth coal export terminal to be located on Kooragang Island in the Port of Newcastle. The terminal would have a capacity to export up to 70 million tonnes of coal per annum (mtpa) and includes rail and coal receival infrastructure; coal stockpile pads and associated machinery; wharf and berth infrastructure; coal conveyors; feeders and transfer stations; and other associated infrastructure. Three biodiversity offset sites located at Ellalong Lagoon, Brundee Swamp Nature Reserve and Tomago also form part of the proposed development. The proposal has an estimated capital investment value of $4.8 billion and is expected to generate 1,500 construction positions and up to 80 operational positions. The facility would operate as an ‘open access terminal', meaning access to terminal facilities would be available to any operator wanting to export coal. Newcastle is the world's largest coal export port1, exporting over 134 million tonnes of coal per annum in 2012, and handling over $20 billion in general trade annually. Notwithstanding the current softening of coal demand in the world market, the Reserve Bank of Australia, the Australian Government Bureau of Resources and Energy Economics (BREE) and the Newcastle Port Corporation all expect demand to continue to grow. The current combined capacity of the Port of Newcastle (comprising NCIG, KCT and CCT terminals) is 211 million tonnes per annum and if T4 was approved and built, capacity would be 281 mtpa. The Secretary’s Preliminary Environmental Assessment Report (PEAR) states that in 2013 a peak of 150.5 million tonnes of coal was exported through the Port of Newcastle, representing an increase of 17 percent on the previous year's exports. Notwithstanding this increase, the Commission acknowledges the demand for coal has since softened and there is no immediate need for the fourth coal terminal. However, while fluctuations in the market may delay the requirement for a fourth terminal, it is recognised that the ability to meet an increased demand in the future requires continued investment and expansion in supporting infrastructure. The proposed development is a Major Project subject to the transitional provisions of Part 3A of the Environmental Planning and Assessment Act 1979. The project is also a controlled action and requires approval under the Environment Protection and Biodiversity Conservation Act 1999. The Commonwealth Minister for the Environment will make a determination on the proposal with reference to the Department's assessment of matters of national significance.

1 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report.p.2. June 2014


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The Commission held public hearings on the project on 26 and 27 August 2014, where over 130 verbal and written submissions were made for and against the proposal. Speakers in support explained that the coal terminal would provide regional employment and economic growth to Newcastle and the wider region. A number of speakers encouraged the use of existing industrial land for the terminal, as it is located away from residential properties. Significant concerns and objections to the project came from the local community and special interest groups, with the primary issues being air quality health impacts, biodiversity impacts and contamination. Another recurring concern heard by the Commission was that the economic benefits of the proposal have been overstated and that there is no economic rationale for a fourth coal terminal. The Commission has carefully considered all the information identified by the Minister as relevant to the review. The merits and potential impacts associated with the project have been critically examined, as well as measures proposed to avoid, mitigate or manage them through the Department’s draft conditions of approval. Prior to the Public Hearing, the Commission visited the site and surrounds and met with representatives of Newcastle City Council and Port Stephens Council. During the course of the assessment, various meetings were held with government agencies, including the Environment Protection Authority, The Office of Environment and Heritage and the Commonwealth Department of Environment. Acknowledging the community’s significant concerns about the economic rationale for an additional coal terminal at the Port of Newcastle, the Commission engaged the Centre for International Economics (CIE) to review the robustness of the Proponent’s economic analysis in support of the additional coal terminal; and consider the criticisms made in the Australia Institute’s submission regarding the Proponent’s economic assessment. The CIE concluded that the general approach taken by the Proponent is generally reasonable and based on current contracted volumes, estimates that the project would not be needed until after 2023. In considering the project as a whole, the Commission largely agrees with the position adopted in the Department’s Preliminary Assessment Report. This position is that the Proponent’s rationale for the fourth coal terminal is generally credible, although the timing and staging of the development could be better defined. The reasons for this are set out in detail in this Review report. The Commission considers that if the recommendations outlined below are adopted, then there is merit in allowing the project to proceed.

1. Approval lapse period The Commission recommends a five year rather than ten year approval period for the project. A ten year commencement period could result in extended delays in dealing with contamination and biodiversity issues; as well as sanctioning a project out of step with potential changes to air quality standards and greenhouse gas policies. A five year approval provides a reasonable period to commence construction based on current planning and environmental requirements.

2. Biodiversity (a) The Commission is of the view that the Proponent needs to demonstrate that the

proposed Tomago offset area is functioning successfully prior to construction commencing at the project site. While the Commonwealth recommends one year of demonstrated success, the Commission considers Tomago should be functioning for a minimum of three years to be confident of documenting at least one successful season of usage by migratory shorebirds.

(b) Further consideration of the design of the project is required, especially the northern location of stockyards, to minimise impact on the frog populations in the Frog Pond and


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Railway Pond. This could also provide improved Australasian Bittern habitat and minimise the impact on migratory shorebirds utilising habitat along the northern shoreline of Deep Pond.

(c) The Commission’s recommended five year approval period would provide an appropriate timeframe for the Proponent to commence the priority conservation works outlined in this report, which would have significant biodiversity benefits and constitute substantial commencement of the development. A ten year approval could potentially delay a start to the important conservation works.

3. Contamination

(a) The Commission considers that the contamination on Kooragang Island should be remediated as soon as practicable. A five year approval (rather than the proposed 10 year approval) would ensure that the remediation process is not unnecessarily delayed and provide increased certainty that these important public interest benefits are delivered in a cost effective manner. As a first step in resolving the remediation of the site, the Commission is of the view that the Proponent, the EPA and the HDC need to negotiate and agree on a comprehensive remediation strategy and timetable with roles and responsibilities, before a determination is made on the project.

(b) The Commission recommends adoption of the amendments and additional conditions recommended by the EPA in the correspondence dated 10 October 2014. In addition, Condition B32 should be amended to reference a one in 100 year average recurrence interval discharge event, (as in correspondence from the EPA dated 25 August 2014).

4. Air quality

The Commission received many submissions expressing concern about the health impacts of particulate emissions associated with the project. Having sought expert advice from the NSW Health and the Environment Protection Authority, and considered the issue in detail, the Commission is satisfied that by concentrating coal handling on Kooragang Island, at a greater distance from residential areas than other existing sources, T4 could provide greater flexibility to improve air quality in Newcastle residential areas if community expectations and regulatory requirements tighten as expected.

5. Covering Coal Wagons The best information available to the Commission at this time is that the most significant sources of particulate emissions from coal trains are from the diesel locomotives and the undercarriage of recently unloaded wagons, rather than the uncovered tops of wagons. There is little or no evidence that uncovered wagons contribute significantly to particulate air quality in the Newcastle area and therefore no justification for recommending that wagons be covered. To the extent that emissions from loaded wagons are identified as a problem, requirements to profile loads, maintain moisture levels and/or apply veneers to suppress dust appear to represent more viable alternative controls.


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Table of Contents

Executive Summary ........................................................................................................................ i

Table of Contents ........................................................................................................................... iv

Glossary ......................................................................................................................................... vi

INTRODUCTION ...................................................................................................................... 1 1

1.1 Site Description ..................................................................................................................... 1 1.2 The Proponent ...................................................................................................................... 1 1.3 Strategic context ................................................................................................................... 1 1.4 Proposal ................................................................................................................................ 2 1.5 Comparison between the current application original proposal .......................................... 6 1.6 The Secretary’s Preliminary Environmental Assessment Report (PAR) ................................ 7

THE COMMISSION’S REVIEW TASK .......................................................................................... 8 2

2.1 Terms of Reference for the Review ...................................................................................... 8 2.2 Public Hearings and Submissions .......................................................................................... 9 2.3 Documents, meetings and site inspections ........................................................................ 10

JUSTIFICATION ....................................................................................................................... 11 3

3.1 Proponent’s justification ..................................................................................................... 11 3.2 Department’s position ........................................................................................................ 12 3.3 Alternative economic analysis ............................................................................................ 12 3.4 Review of proponent’s economic analysis .......................................................................... 13 3.5 Commission’s view .............................................................................................................. 14

COMMENTS, FINDINGS AND RECOMMENDATIONS RELATING TO THE TERMS OF REFERENCE 14 4

4.1 Biodiversity ......................................................................................................................... 14 4.1.1 Migratory Shorebirds ............................................................................................. 16 4.1.2 Australiasian Bittern ............................................................................................... 19 4.1.3 Green and Golden Bellfrog (GGBF) ........................................................................ 21 4.1.4 Hunter Estuary Wetlands Ramsar site ................................................................... 23 4.1.5 Conclusions and Recommendations ...................................................................... 24

4.2 Contamination .................................................................................................................... 25 4.2.1 Background ............................................................................................................ 25 4.2.2 Proposed remediation and rehabilitation .............................................................. 26 4.2.3 Dredging materials and groundwater .................................................................... 27 4.2.4 EPA advice .............................................................................................................. 31 4.2.5 Conclusions and Recommendations ...................................................................... 31

4.3 Air Quality and associated health impacts .......................................................................... 32 4.3.1 Current particulate levels and standards ............................................................... 32 4.3.2 Impacts of the Project ............................................................................................ 34 4.3.3 Conclusion and Recommendations ........................................................................ 45

4.4 Noise ................................................................................................................................... 46 4.5 Traffic .................................................................................................................................. 51 4.6 Other Considerations .......................................................................................................... 52

4.6.1 Greenhouse Gas Emissions .................................................................................... 52


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4.6.2 Strategic direction for the Port and City of Newcastle and wider Hunter Region . 57 4.6.3 Stormwater/ground water ..................................................................................... 62 4.6.4 Voluntary Planning Agreement AND DEVELOPMENT CONTRIBUTIONS ................ 63

5. CONCLUSION ......................................................................................................................... 65

6. Recommendations .............................................................................................................. 66

References .................................................................................................................................... 68

List of Appendices ......................................................................................................................... 71

Figures Figure 1 – Site and surrounding land uses ‐ western view Figure 2 – Site and surrounding land uses ‐ eastern view Figure 3 ‐ Indicative outline of the site and surrounding areas Figure 4 ‐ Landfill areas Figure 5 ‐ Proposed contamination management and remediation measures Tables Figure 1: Site and surrounding land uses ‐ western view (source: PPR, 2014, p.25) ............................ 4 Table 1 – Summary of Issues ................................................................................................................... 9 Table 2 – List of Commission meetings ................................................................................................. 11 Figure 3: Indicative outline of the site and surrounding areas (Source: T4 Project Response to Submissions and PPR (EMM 2013)) ...................................................................................................... 16 Table 3 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding Migratory Shore Birds ........................................................................................................................... 18 Table 4 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding the Australasian Bittern .............................................................................................................................. 20 Table 5 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding the Green and Golden Bell Frog .................................................................................................................. 22 Table 6 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding Ramsar Wetlands .................................................................................................................................. 24 Table 7 ‐ Ownership status of Landfill Areas on the Project Site .......................................................... 26 Figure 4: Landfill areas (Source: T4 Project Response to Submissions and PPR (EMM 2013)) ........... 29 Figure 5: Proposed contamination management and remediation measures (Source: T4 Project Response to Submissions and PPR (EMM 2013)) ................................................................................. 30 Table 8 ‐ Current NEPM Standards and Goal for particulates (as varied in 2003) ................................ 32 Table 9– NSW EPA Impact Assessment Criteria for Particulates .......................................................... 33 Table 10 ‐ Annual Average PM10 and PM2.5 levels (sourced from OEH air quality data) ...................... 33 Table 11– Highest predicted particulate emissions contribution from the project at Sandgate, under different stages of development .......................................................................................................... 36 Table 12 ‐ Maximum allowable noise contribution (dBA) under the planning approval for the Kooragang Coal Terminal ..................................................................................................................... 47 Table 13 – Proponent’s predictions (dBA) of the combined intrusive impact from T4 and the existing Kooragang Coal Terminal ...................................................................................................................... 47 Table 14 Department's recommended Maximum allowable noise contribution (dB(A)) from the combined operations of T4 and the Kooragang Coal Terminal ............................................................ 48 Table 15 ‐ EPA Recommended Noise Limits (dBA) and Localities ......................................................... 48


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Glossary

ARTC Australian Rail Track Corporation

BMP Biodiversity Management Plan

BOP Biodiversity Offset Package

BOS Biodiversity Offset Strategy

CBA Cost Benefit Analysis

CCT Carrington Coal Terminal

CFA Capacity Framework Agreement

the CIE The Centre for International Economics

CO2‐e Carbon dioxide equivalent

Commission Planning Assessment Commission constituted for this review and public hearing, Mr Paul Forward (Chair), Mr Joe Woodward PSM and Mr Brian Gilligan

dB(A) Decibels (A weighted)

EEC Endangered Ecological Community

EA Environmental Assessment prepared by EMM Consultants, February 2012

EP&A (or the Act) Environmental Planning and Assessment Act 1979

EPA Environment Protection Authority

EPBC Act Commonwealth Environmental Protection and Biodiversity Conservation Act 1999

EPL Environment Protection Licence

GGBF Green and Golden Bell Frog

GHG Greenhouse Gases

HDC Hunter Development Corporation

HVCC Hunter Valley Coal Chain

INP NSW Industrial Noise Policy

KCT Kooragang Coal Terminal

LCP Landfill Closure Plan

LGA Local Government Area

Mtpa Million tonnes per annum

NCIG Newcastle Coal Infrastructure Group

NEPM National Environment Protection Measure

OEH Office of Environment and Heritage

PAC Planning Assessment Commission

PEAR Secretary’s (of the Department of Planning and Environment) Preliminary Environmental Assessment Report

PM10 Particulate matter with an aerodynamic diameter smaller than 10 micrometres


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PM2.5 Particulate matter with an aerodynamic diameter smaller than 2.5 micrometres

PPR Proponent’s Response to Submissions and Preferred Project Report (EMM, September 2013)

RAP Remediation Action Plan

ROM run‐of‐mine coal

RTS Proponent’s Response to Submissions

SCA State Conservation Area

the Department Department of Planning and Environment (previously Planning and Infrastructure)

the Proponent In this report being PWCS . ‘Proponent’ includes the Proponent’s EIS consultants.

the proposal The subject of the application under the transitional arrangements in place as a result of the repeal of Part 3A of the EP&A Act 1979, in this report being the Port Waratah Coal Services Terminal 4 Project. Mainly referred to as ‘the project’.

PWCS Port Waratah Coal Services

TAI The Australia Institute

TSP Total suspended particulate

TSC Act Threatened Species Conservation Act 1995


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INTRODUCTION1

1.1 SITE DESCRIPTION The project area comprises approximately 300 ha of land at Kooragang Island with ship loading facilities on the Hunter River South Arm, in the Port of Newcastle (see Figures 1 and 2). It is zoned SP1 Special Activities under the State Environmental Planning Policy (Major Development) 2005, which permits port development with consent. The ownership of the site includes PWCS, OneSteel Manufacturing Pty Limited, Pacific National Pty Limited and BHP Billiton Limited and Crown land. The majority of the Crown land is managed by Newcastle Port Corporation (NPC) and the Hunter Development Corporation (HDC). Kooragang Island was originally a series of low lying deltaic islands in the Hunter River estuary, which have been subject to land reclamation for industrial development since the late 1800s. The island currently comprises a reclaimed landmass of approximately 2,600 hectares, situated between the north and south arms of the Hunter River. Kooragang Island supports significant industrial development in its southern section (the location of the proposed coal terminal), including heavy and light industries, transport and distribution infrastructure, and waste emplacement and port facilities. These facilities include the PWCS Kooragang Coal Terminal and Newcastle Coal Infrastructure Group (NCIG) coal terminals, Boral cement manufacturing and distribution facility, OneSteel and Orica's ammonium nitrate facility as well as various other manufacturing and distribution facilities. Historically, the project site has been used for waste and contaminated material disposal associated with past activities of nearby industry and the port. The proposed coal terminal would be partly constructed on three licensed landfill areas:

Areas A and B ‐ part of the Kooragang Island Waste Emplacement Facility (KIWEF) owned by

HDC;

Area C ‐ Delta Electrolytic Manganese Dioxide owned by PWCS; and

Area D ‐ Fines Disposal Facility owned by PWCS. To the north and west of the industrial and port areas are estuarine wetlands, mangroves, saltmarsh as well as pastured and forested lands, including the Hunter Wetlands National Park, the international significance of which has resulted in listing as the Hunter Estuary Wetlands Ramsar site.

1.2 THE PROPONENT PWCS comprises a joint venture between a number of coal producers and other coal industry participants, including exporters and importers. PWCS owns and operates two coal terminals in the Port of Newcastle – the Carrington Coal terminal adjacent to Tighes Hill and Mayfield East residential areas and the Kooragang terminal on Kooragang Island.

1.3 STRATEGIC CONTEXT The project site is located in the Lower Hunter region, which is an important economic centre in NSW and Australia. The need to expand and maintain competitive port infrastructure to support the coal industry in NSW has been recognised in strategic policies and frameworks including:

Hunter Strategic Infrastructure Plan 2013;

Hunter Economic Infrastructure Plan;


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Draft Strategic Development Plan for the Port of Newcastle;

NSW Freight and Ports Strategy;

Three Ports State Significant Site Proposal for New South Wales: Major Ports of Newcastle,

Botany and Port Kembla;

2013‐2022 Hunter Valley Corridor Capacity Strategy; and

NSW Government NSW Coal and Gas Strategy Scoping Paper (February 2011). A number of projects resulting from these frameworks and strategies have been completed or are under construction. These include the expansion of Kooragang and Carrington Coal Terminals (operated by PWCS) to increase combined throughput capacity to 145 mtpa; the expansion of NCIG to 66 mtpa throughput capacity; and rail upgrades including the Maitland to Minimbah and Nundah Third Track projects. The rail network and port facilities at Newcastle are key infrastructure in the coal chain. The majority of coal production in New South Wales is in the Hunter Valley with a growing number of mines in the Gunnedah Basin, approximately 300 kilometres north‐west of Newcastle. The Hunter Valley Coal Chain (HVCC) ‐ the process of extracting coal from the mine to loading on vessels at the port ‐ is the largest coal export operation in the world.2 It consists of approximately 35 coal mines owned by 11 coal producers with 31 load points and coal haulage distances of up to 380km. Coal is transported from the mines to the Port via rail and is then received at one of three coal export terminals (PWCS’s Kooragang Island terminal, PWCS’s Carrington Coal Terminal or NCIG's Kooragang Island terminal). Management of coal transportation by rail is the responsibility of the Australian Rail Track Corporation (ARTC) which is regulated by an Environment Protection Licence (EPL) administered by the Environment Protection Authority (EPA). The Port of Newcastle is a state and nationally significant trade gateway, with total imports and exports in 2011‐12 contributing $20 billion to the NSW economy. Seventy nine percent of this investment is underpinned by coal exports which totalled $15 billion in 2011‐12. The Port and the associated coal terminals therefore play a critical role in the NSW coal industry, contributing significantly to both the NSW and Australian economies.

1.4 PROPOSAL PWCS proposes to construct and operate a new coal export terminal on Kooragang Island, referred to as Terminal 4. This will essentially be an extension of the existing Kooragang coal terminal, though operated independently. The new terminal will have a capacity of up to 70 mtpa, which is a reduction from the 120 mtpa proposed by the Proponent within the original Environmental Assessment (EA). The Secretary’s PEAR states that the capital investment value of the project is estimated at $4.8 billion. The major components of the proposal are detailed in Table 1 of the Secretary’s Preliminary Environmental Assessment Report (PEAR), and can be summarised as follows:

Site establishment and remediation works.

Development of terminal infrastructure, including: o rail infrastructure, stockpile pads, conveyers and ship loaders, berthing facilities,

access, services, water management and supporting infrastructure. o Up to four arrival tracks converging into up to three dump stations.

2 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. p 2


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o Up to four departure tracks combining into a single track around Kooragang Coal Terminal.

o Rail tracks realigned at Mosquito Creek to minimise disturbance to the creek. o Rail tracks realigned at arrival onto Kooragang Island to accommodate NCIG's tracks. o Up to four coal stockpile pads with total throughput capacity of 70 Mtpa. o Up to four stackers and four reclaimers. o Inbound and outbound conveyors would service up to two dump stations and 4

stockpiles.

Three ship berths on the north side of the Hunter River South Arm and a barge landing area

on north bank of swing basin to unload large equipment.

Three main settling ponds and one main transfer pond, south of stockyard.

Three land based biodiversity offset sites secured at Ellalong Lagoon Offset Site (409 hectares), Tomago Offset Site (238 hectares) and Brundee Swamp Offset Site (204 hectares).

The revised proposal would be progressively constructed in response to demand nominated by coal producers and commercial requirements, with the actual timing and scale of the development dependent on these factors.3 PWCS proposes to only construct the coal terminal and implement the associated environmental management and mitigation measures, including contamination management, remediation and the biodiversity offset strategy, if demand requires it be constructed.

3 PWCS (2014), Response to Submissions on Preferred Project, p.84, January.

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Figure 1: Site and surrounding land uses ‐ western view (source: PPR, 2014, p.25)

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Figure 2: Site and surrounding land uses ‐ eastern view (source: PPR, 2014, p.26)

6 Planning Assessment Commission Review Report 2014 Port Waratah Coal Services Terminal 4 Project

1.5 COMPARISON BETWEEN THE CURRENT APPLICATION ORIGINAL PROPOSAL The Commission met with representatives from the Department for a briefing on 22 July 2014. One of the issues discussed was the differences between the current application and the proposal presented in the Environmental Assessment (EA). A comparison between the original proposal and the proposal contained in the Preferred Project Repot (RRP) is provided in the table below (which is also included as Appendix A in the Secretary’s PEAR):


1.6 THE SECRETARY’S PRELIMINARY ENVIRONMENTAL ASSESSMENT REPORT (PAR)

The Secretary’s PEAR of the proposal has been submitted to the Commission for consideration as part of the review process. The PEAR considered the proposal, its strategic and statutory context, public and agency submissions, and the Proponent’s PPR and responses to submissions report. It identified the key issues relating to this application to be:

Upstream and downstream impacts;

Air quality;

Flora and fauna;

Contamination;

Stormwater and drainage;

Flooding;

Noise;

Traffic and transport; and

Visual. The report concluded:

The Government has taken strategic planning steps to ensure the Port is preserved and can accommodate growth. The proposed development is consistent with the planning framework and strategies and the Capacity Framework Agreement (CFA) process.


The proposal is justified on the grounds that it will enable the coal chain to meet forecast export demand of coal through the Port of Newcastle. Fluctuations in the coal market may delay the requirement for the fourth terminal, but are unlikely to remove its need altogether.

The proposal is relatively well‐located given its proximity to shipping channels, rail lines, separation from sensitive receivers and appropriate zoning.

Whilst there are some environmental constraints, the proposal is likely to provide significant environmental advantages when compared to locating a new terminal on a greenfield or alternative site.

Although significant opposition to the proposal was raised in submissions on the basis that it would increase coal extraction and associated impacts, these concerns largely relate to coal extraction itself rather than the terminal infrastructure specifically.

Overall, the Department is confident that the proposal could proceed with minimal adverse environmental impacts whilst realising significant benefits to the local, regional, state and national economies. It concludes that the project’s benefits outweigh its potential impacts and therefore it should be approved subject to conditions. The Secretary’s PEAR includes draft recommended conditions of approval relating to the management of air quality/dust management, noise, surface water, ground water, contamination, biodiversity conservation and visual impact.

THECOMMISSION’SREVIEWTASK2

2.1 TERMS OF REFERENCE FOR THE REVIEW Section 23D of the Environmental Planning and Assessment Act 1979 (EP&A Act) provides for the Minister to request the Commission to conduct a review of a development application for a project and to hold a public hearing into the matter the subject of the review. The Minister’s terms of reference for this review are dated 13 September 2012 and are to:

1. Carry out a review of the Port Waratah Coal Services Terminal 4 Project (MP10_0125), and: a) consider the Environmental Assessment of the project, issues raised in public

and agency submissions on the project, and any other information provided during the course of the review;

b) assess the merits of the project as a whole, paying particular attention to potential:

noise and air quality impacts of the project;

traffic impacts of the project;

biodiversity and contamination impacts of the project; and

any other potentially significant impacts of the project and c) recommend appropriate measures to avoid, minimise, and/or offset these

impacts. 2. Conduct public hearings during the carrying out of the review. 3. Submit its final report on the review to me within three months of the receipt of

the proponent’s response to submissions or preferred project report, unless the Director ‐General of the Department of Planning and Infrastructure agrees otherwise.


The PPR was exhibited in late 2013 and consequently the original timeframe for the review past. At the time the PPR was exhibited, the Chair of the Commission sought clarification from the Minister regarding the terms of reference and the Minister’s previous advice to the Commission. The advice was that a representative relevant to the consideration of Commonwealth matters would be nominated to form part of the review panel. On 6 March 2014 the Commission received a response advising that the Commonwealth would no longer be nominating a representative to participate in the review. The Secretary’s PEAR was subsequently received by the Commission on 27 June 2014 and public hearings were held in Newcastle over two days from Tuesday 26 August 2014. Following the Hearing, the Commission met with various government agencies to seek additional advice on issues raised in submissions and at the hearing. Written advice from the EPA and the Commonwealth Department of the Environment was received on 10 October 2014. An independent economic review of the proposal was undertaken and was received by the Commission on 17 November 2014. Given the timeframe taken to receive advice from government agencies and other experts, the Commission requested an extension to the timing of the review until 30 November 2014.

2.2 PUBLIC HEARINGS AND SUBMISSIONS In accordance with the Minister’s request, the Commission held public hearings on 26 and 27 August 2014 at Newcastle Panthers. Over 130 verbal submissions were made to the Commission at the hearing including the Proponent, special interest groups, Newcastle City Council, local councillors and individual residents. All those seeking to be heard were heard. The Commission also received written and photographic submissions. Copies of the submissions are available on the Commission’s website: http://www.pac.nsw.gov.au. A brief summary of the issues is provided in the table below. Table 1 – Summary of Issues

Issue Submissions from Public Hearing

Summary of submissions supporting the project

Social and Economic The coal terminal will provide regional employment growth within Newcastle

and the wider region.

It will stimulate economic growth for the region.

Making use of existing industrial land away from residential properties.

Long‐term legacy of direct community benefits.

Environmental Provision of significant environmental offsets.

Proposal will address existing contamination on the site.

Summary of submission objecting to the project

Contamination and

Water

Surface and groundwater impacts.

Proposal will make contamination worse.

Dredging impacts on aquatic and estuarine habitats.

Cumulative impacts on the Hunter River.

Biodiversity Concerns about the impacts on and loss of flora and fauna, including

threatened species and native vegetation.

Concern that biodiversity offsets proposed are not adequate.

Habitat destruction.


Issue Submissions from Public Hearing

Impact on Ramsar wetlands and birdlife.

Impact on GGBF resulting from loss of habitat.

Air Quality Potential impact on air quality (especially particulate levels) in the Newcastle

region.

Health and amenity implications for the Newcastle population and for those

who live in the vicinity of railway lines used by coal trains.

Uncovered coal wagons and stockpiles.

Impact on existing poor air quality in the area.

Comprehensive study of existing particle pollution levels is required.

Social and Economic The economic benefits have been overstated.

There is no economic rationale for a fourth coal terminal.

Questions about the data modelling and other studies.

Concerns about the social impacts on the community.

Health fears from coal dust.

Impact on tourism.

Public safety issues from chemical use.

Rail Rail dust, noise and vibration.

Cumulative impacts of increased rail movements.

Congestion of train lines.

Climate Change Concerns about the project contributing to climate change (from burning coal

exported through the coal terminal).

Traffic Impact on traffic flow around Kooragang and Stockton

Noise Increased noise from new terminal and associated train movements.

Visual Visual impact of the new coal terminal.

Other Lack of transparency.

Concern regarding review process.

Lack of faith in the Commission and the Department/state government.

2.3 DOCUMENTS, MEETINGS AND SITE INSPECTIONS The Commission reviewed a wide range of documents including:

The Proponent’s EA (prepared by EMM, February 2012);

Submissions from government agencies, special interest groups and the public made to the Department on the EA and submissions made directly to the Commission;

The Proponent’s Response to Submissions and PPR (EMM, September 2013);

The Proponent’s Response to Submissions on the PPR (EMM, January 2014)

The Secretary’s PEAR (June 2014); and

Review of Economic Analysis Port Waratah Expansion T4 (The CIE, November 2014). The Commission visited the site and surrounding suburbs, met with government agencies and representatives of two local councils (Newcastle and Port Stephens) and met with the Proponent. A summary of the Commissions meetings in relation to the proposal is provided in Appendix 3. In short, the Commission met with:


Table 2 – List of Commission meetings

Date Meeting

22 July 2014 Department of Planning and Environment

14 August 2014 EPA

OEH (inspection of Tomago offset area)

Port Stephens Council

15 August 2014 PWCS (including site inspection)

Newcastle Council

12 September 2014 The CIE

15 September 2014 EPA

Department of Planning and Environment

24 September 2014 EPA

1 October 2014 NSW Department of Health

Commonwealth Department of Environment

(teleconference)

30 October 2014 The CIE

6 November 2013 Department of Planning and Environment

The Commission visited the site on 15 August 2014 with the Proponent. The Commission also met on multiple occasions to discuss issues arising from its review of the proposed development.

JUSTIFICATION3 One of the primary issues raised by speakers at the public hearing was that the construction of a fourth coal terminal is not justifiable on economic grounds. This section of the report considers the Proponent’s justification for the fourth coal terminal, the Department’s position as set out in the Secretary’s PEAR as well as the expert advice sought by the Commission to clarify issues raised in submissions.

3.1 PROPONENT’S JUSTIFICATION The lease for the Kooragang Island terminal requires PWCS to operate the terminal as a "common user facility", meaning access to the terminal on a non‐discriminatory basis must be provided to any producer wishing to ship coal. Allocation of port capacity to producers is currently managed under long‐term operational framework governed by Capacity Framework Agreements (CFAs). The CFAs were developed by the NSW government and the coal industry, and form a critical part of the long‐term export plan for coal produced in the region. The CFAs include contractual obligations for PWCS to ensure its terminal facilities have enough capacity to meet the contracted coal throughputs. Where a shortfall is predicted that cannot be accommodated by further expansion of its existing coal export terminals, PWCS is required, under the agreement, to build a new terminal within four years of the capacity shortfall being formally acknowledged.


The PPR explains that the CFAs are intended to provide a solution to the historic inefficiencies, uncertainty and capacity constraints experienced in the HVCC. They include an annual process for coal producers to nominate export capacity required for the coming 10 years on a "ship or pay" basis (i.e. penalties or the costs of coal handling are paid by the producer regardless of whether the allocation is used). This is to ensure the existing terminals have enough capacity to service the contracted coal throughputs. The long‐term contracts have resulted in producers nominating allocations during the peak of the mining boom, which ultimately triggered the requirement for PWCS to seek approval for a fourth terminal. In 2012 PWCS projected capacity shortfalls at its Carrington Coal Terminal and Kooragang Coal Terminal in Newcastle by 2015. This was based on the assumption that world demand for coal would continue to grow strongly, based on trends at the time. The more recent slowing of coal demand from the Port of Newcastle has exposed over‐allocations. In May 2013 PWCS voluntarily accepted a reduction in contracted tonnages from the majority of Hunter Valley producers, and announced that the requirement for the Terminal 4 project had been un‐triggered.4 Consequently, the capacity of the proposed coal terminal was downsized by the Proponent from 120mtpa (as proposed in the EA) to a 70 mtpa terminal in the PPR and no immediate need for the terminal was signalled. The Commission notes that the layout of the revised proposal allows for further expansion if warranted by future demand. Any future expansion within the project area to achieve a nominal capacity of 120 mtpa would be subject to future demand, with separate assessment and determination under the relevant legislation.

3.2 DEPARTMENT’S POSITION The Secretary’s PEAR states that coal currently provides approximately 40 per cent of world electricity demand and the export of thermal coal is Australia's third largest export commodity by value. Notwithstanding the recent downturn in the global market, the export of coal is expected to continue to play an important role in the global energy mix in the future ‐ particularly for non‐OECD countries. The Department acknowledges that all economic models, including that prepared by Gillespie Economics on behalf of the Proponent, have limitations and can only ever provide estimations based on the assumptions used. It is generally accepted that economic models, such as cost benefit analysis (CBA) are useful tools in decision making. The Department accepts the Proponent's modelling and considers that while the magnitude of the economic costs and benefits may be argued, the proposal would ultimately be in the public interest. It would result in increased throughput of coal to global markets and therefore increased revenue for NSW. Additional public benefits would include increased employment opportunities, the upgrade of road infrastructure, the remediation of contaminated land and the payment of local developer contributions. The Department also highlighted consequences arising from HVCC inefficiencies and a subsequent reduction in the global competitiveness of the Port of Newcastle should demand not be met.

3.3 ALTERNATIVE ECONOMIC ANALYSIS In a detailed submission to the Commission in August 2014, the Australian Institute (TAI) has provided a critique of the economic assessment undertaken by Gillespie Economics on behalf of the proposal. TAI has questioned key assumptions underpinning the Cost/Benefit Analysis (CBA) and economic impact analysis, and has provided alternative conclusions for a CBA based on what it considers more realistic assumptions. TAI’s main criticisms of the Gillespie CBA for the PPR are that:

4 ARTC (2014), 2014‐2023 Hunter Valley Corridor Capacity Strategy, July, p.7.


Future throughput modelled for the terminal assumes growth rates in coal export demand and supporting mining activity that do not reflect recent experience or likely future demands for terminal capacity;

These future demands are likely to be much weaker than modelled given evidence on future global coal demand – and demand for Australian exports – and the ability of mines in the catchment area of the terminal to profitably supply the coal volumes implied, as well as evidence on coal production costs and coal prices.

Time horizons for the scenarios modelled are too long and therefore distort the net present value gains from the earlier export of increased coal volumes that would be enabled by the construction of T4.

TAI argues that the present value of net production benefits and of the royalties and taxes components are significantly overstated by Gillespie Economics. It raises significant doubt about the financial viability of the terminal investment in light if the downsizing of the proposed throughput capacity from 120 mtpa to 70 mtpa.

3.4 REVIEW OF PROPONENT’S ECONOMIC ANALYSIS In response to the submissions received criticising the modelling and assumptions used by Gillespie Economics to justify the requirement for a fourth coal terminal at the Port of Newcastle, the Commission engaged the Centre for International Economics (CIE) to undertake an independent review of the economic analyses. The scope of the CIE’s review was as follows:

Review the framework for analysis developed by the Proponent;

Review the key assumptions made within the methodology used;

Consider the conclusions compared to alternative assumptions about future coal exports via the terminal and the timing of the construction of the project.

Gillespie Economics assessed the economic efficiency of the project using a CBA. An additional study analysing the expected economic impacts of the project was also conducted for the Proponent. The impact analysis examined the wider economic gains to the regional, state and Australian economies of the project. The CIE’s report on its review of the Gillespie Economics analysis is attached at Appendix 7. The conclusions reached are summarised below:

The general approach taken to construct the CBA is reasonable, although it only provides a partial analysis due to the exclusion of a range of potential future social/environmental impacts arising from the mining and transportation of coal to the Port.

The results of the CBA are highly dependent on the assumptions regarding the throughput

volumes and timing of the construction/operation of the project. These assumptions are

uncertain and depend, in turn, on factors such as future coal prices and global demand for

coal. Some assumptions adopted in the original economic modelling appear to be optimistic

based on currently available market data. Nevertheless, even under the Proponent’s most

pessimistic assumptions, the project would still accelerate coal extraction, generating

around $1 billion (in present value terms) in additional royalties and company tax. Although

not quantified, the potential environmental/social impacts under these more conservative

assumptions would also be reduced, given that (under the pessimistic assumptions) the

project is bringing forward a smaller volume of coal.


While there is significant uncertainty regarding a range of factors, current information suggests that the project is unlikely to be required until around 2023. Therefore, from the Proponent’s perspective, the rationale for the project is precautionary. Project approval provides the Proponent with an option value that can be exercised at some point in the future depending on market conditions.

If the Project is approved but construction is deferred (and possibly abandoned) because of future revised price and volume expectations, there are public benefit consequences to consider. These include the postponement of measures to address ongoing adverse environmental outcomes (e.g. site remediation).

A potential rationale for delaying the approval of the project is if new information is likely to arise in the near future that would allow a more complete CBA to be conducted to account for potential environmental/social impacts at the site (for example, new information on the health impacts of coal dust emissions at the site). The CIE is currently unaware of any new information that would result in a significant public benefit from delaying the project. Any new information on future coal excavation and transportation activities should be taken into account as part of any future mining assessment process.

There may be options for staging future construction or modifying the existing design so as to reduce environmental/social impacts arising from the project site. These should be considered as part of the assessment of the merits of the project from a public welfare perspective.

3.5 COMMISSION’S VIEW The Commission understands that the immediate need for approving the project is dependent upon the future coal export demand through the Port of Newcastle, which triggers the provisions of the CFAs. This is ultimately subject to the future world demand for coal and future coal prices, which are not known with any certainty. The Commission recognises that the ability to meet increased demand for coal exports in the future will require commensurate expansion or investment of the supporting infrastructure, including rail and port capacity. While the immediate need for a new terminal no longer applies, the long lead times required to construct and commence operations of such significant infrastructure warrants sufficient early consideration of any proposed expansion and also provides an opportunity for early action to address potential adverse impacts. Public interest considerations relating to contaminated site remediation and demonstration of the effectiveness of mitigation and offset measures to protect national and internationally significant biodiversity values and biodiversity protection require very careful consideration of project scale, design, timing and staging options.

COMMENTS, FINDINGS AND RECOMMENDATIONS RELATING TO THE 4TERMS OF REFERENCE

4.1 BIODIVERSITY Under the Minister’s Terms of Reference the Commission is required to consider the biodiversity impacts of the project and recommend appropriate measures to avoid, mitigate and/or offset these impacts. Potential ecological impacts associated with the project have been a major focus of many of the submissions made on the project, including those by government agencies, special interest


groups and individuals regarding the Environmental Assessment (EA), Preferred Project Report (PPR) and presentations at the public hearing. In summary, the main concerns raised are as follows:

Impacts on the green and golden bell frog (GGBF) and migratory shorebirds;

Impacts on other birdlife that use Swan Pond and Deep Pond;

Potential for regional extinction of many species;

Clearing of endangered ecological communities;

Cumulative/incremental and unacceptable impacts on wetland habitats, including the

Ramsar‐listed wetlands;

Not fulfilling obligations under International Treaties that apply to the Ramsar wetlands;

Not fulfilling obligations under Commonwealth and NSW legislation; and

The suitability, adequacy and potential effectiveness of the proposed offset areas. The project site is located adjacent to the Hunter Wetlands National Park, which includes the Ramsar Hunter Estuary Wetlands, the former Kooragang and Hexam Swamp Nature Reserve, Stockton Sandpit and part of Ash Island (see Figure 3). A detailed overview of the existing ecological characteristics and features of the site is provided in Section 10.1 and Appendix K of the EA. Extensive flora and fauna surveys of the site and surrounding area were untaken by Umwelt Ecologists (on behalf of the Proponent) and recorded the following:

Five vegetation communities;

One endangered flora species (a pondweed, Zannichellia pallustris);

Two endangered ecological communities (coastal saltmarsh and freshwater wetlands);

61 migratory species (within or flying over the site to access adjacent habitat areas of international significance, which use the T4 project area as foraging habitat), of which 27 are listed in international treaties for migratory birds;

20 threatened fauna species, including three threatened species (Australasian bittern, GGBF, and the grey‐headed flying fox); and

An additional 60 threatened fauna species within 10 kilometres of the site.

The Secretary’s Preliminary Environmental Assessment Report (“assessment report”) recognises that construction of the proposed coal terminal would affect existing ecological values on and around the project site. 273.3 hectares of vegetation is proposed to be cleared, including 174.6 hectares of disturbed or modified land, 75 hectares of natural vegetation/habitat and 21.3 hectares of open water. The Proponent has sought to avoid and minimise the impacts of the proposal on threatened and protected species and communities through a range of measures prepared in consultation with the Department, Office of Environment and Heritage (OEH) and the Commonwealth Department of Sustainability, Environment, Water, Population and Communities (“the Commonwealth”). These measures are outlined in Table 5 on Page 32 of the Secretary’s assessment report and include:

Creation of an on‐site GGBF habitat corridor;

851 hectares of direct land‐based offsets across three sites secured by the Proponent within

the same bioregion:

o Ellalong Lagoon in Cessnock LGA (409 hectares); o Brundee Swamp in Shoalhaven LGA (204 hectares); and o Tomago offset site in Port Stephens LGA (238 hectares).

Habitat restoration and creation works on the Tomago Offset site; and


Monetary contributions to research, weed control and other ongoing management measures.

This chapter of the report reviews the biodiversity issues associated with the project by identifying the potential impacts on flora and fauna; assessing measures proposed to avoid or mitigate the impacts and consider the proposed offset strategy, which seeks to offset residual impacts.

Figure 3: Indicative outline of the site and surrounding areas (Source: T4 Project Response to Submissions and PPR (EMM 2013))

4.1.1 MIGRATORY SHOREBIRDS

Impact Construction of the coal terminal as proposed would require the removal of 7.5 hectares of mudflat at the northern area of Deep Pond and 18.8 hectares of saltmarsh habitat (including 2.3 hectares of Swan Pond). As a consequence, five migratory shorebird species that regularly use the habitats of Swan Pond and Deep Pond will be directly affected. These species are:

Common greenshank;

Curlew sandpiper;

Marsh sandpiper;

Red‐necked stint; and

Sharp‐tailed sandpiper. Moderate impacts are also anticipated on four other species and low impacts on a further 10 species. Mitigation / Offset strategy Deep Pond The Commission acknowledges that in an effort to reduce the ecological impacts of the development, amendments were made to the project as part of the PPR. This included the retention

Hunter Wetlands National Park & Ramsar siteHunter Wetlands National Park

Ash Island

T4 site

Hexham Swamp

Stockton


of approximately three hectares of open water habitat at the southern end of Deep Pond to provide habitat for the migratory shorebirds. While the Commission believes this is a positive outcome, it considers there is further scope to retain more of Deep Pond. The reduction in the nominal maximum throughput by the Proponent from 120 mtpa to 70 mtpa has not resulted in any reduction in the proposed incursion of the stockyard into the north eastern section of Deep Pond. The Commission notes that the proposed layout of the terminal’s coal pads provides space for two additional pads that could be developed as part of a future expansion beyond the proposed 70 mtpa. If these two additional undeveloped pads were located at the north rather than the south of the stockyard layout, it would provide a greater ability to protect the deep pond for the life of this proposal. Development of these pads could be reconsidered for any future expansion of the terminal after which time considerably more information would be available regarding biodiversity implications and the success of the proposed offset strategy. The Commission acknowledges that the Proponent considered an option to build the stockpiles in the southern portion of the site to avoid specific frog habitat ponds, such as railway pond. The study conducted suggested this option would be more expensive, would take longer to design/construct and would be inconsistent with remediation plans on the site5. The Commission’s review of the related documentation has identified several matters warranting some further clarification:

1. The comparative costings seem to lack detail. For example, if the major direct cost (estimated at $49M) is the provision of a combined Sheet Pile and Cement‐Bentonite Slurry Wall to isolate the Frog ponds and Deep Pond from the areas being filled for the coal stockyard. The costs seem to be presented as totally additional to the costs of similar barriers proposed to be established along the railway embankment rather than considering the possibility that at least a significant amount of the barrier would be instead of, rather than additional to that set out in the PPR. Additional works identified also seem to carry a generous contingency allowance.

2. The costings seem to assume a site preparation/construction time imperative which may not now apply. $71M of the estimated additional cost is described as ‘indirect’. It is unclear how much of this might relate to ‘delays’ which might now be costed somewhat differently.

3. Much seems to be made of the fact that any change in the design/layout would require revision of the relevant Landfill Closure Plans. However, the Draft Recommended Conditions of Approval at B43 require that ‘prior to commencement of construction …….., the Proponent is to finalise and submit the landfill Closure Plan, Remediation Action Plan for each stage and the containment cell design for the approval of the Secretary.’ Given this coupled with the commitment to integrate remediation works across the whole site, it seems there might be considerable detailed design work that still has to be done which could provide an opportunity for some refinement of the designed footprint.

4. The Commission recommends that the design of the stockyard be refined to reduce the impact on Deep Pond and the adjacent pond areas along the rail corridor. Although the costs may be marginally greater, it should still be possible to construct two stockpile pads to the south rather than the north without limiting the proposed capacity of the terminal. In addition, a staging strategy to achieve the 70 mtpa capacity would provide additional time to achieve and demonstrate a successful offset strategy.

Tomago offset site To offset the project’s residual impacts on saltmarsh and migratory shorebird habitat, PWCS has secured 238 hectares of land in Tomago (“Tomago offset site”). This land has high conservation

5 PPR, Appendix T (EMM 2013)


significance in the Hunter estuary due to its proximity to the Hunter Wetlands National Park and Hunter Estuary Wetlands Ramsar site. It is also close to the wetlands on the T4 project area. With input from shorebird and saltmarsh experts, a restoration concept of up to 140 hectares of shorebird habitat has been prepared. The concept comprises a series of shallow tidal lagoons that incorporate mudflats, saltmarsh habitat and island roosts. During the review process, the Commission received two submissions from Hardie Holdings Ltd regarding the use of the Tomago site as part of the proposal’s biodiversity offset strategy. Hardie Holdings Ltd raised issues concerning the history of the offset land and suggested that utilising the site as part of an offset package for the proposal would amount to 'double‐dipping’ land for the purpose of a biodiversity offset. The Commission carefully considered this submission and the site’s complex history. Ultimately the Commission believes the site is legally unencumbered. OEH advice The Commission met with representatives from the OEH in August 2014 and undertook a guided inspection the Tomago offset site. The OEH officers were supportive of the proposed offset strategy for Tomago, as it has the potential to result in habitat areas that are commensurate with (if not an improvement on) the habitat areas found on the proposed development site. Commonwealth advice During its review of the EA submissions and public hearing presentations, the Commission gave particular attention to the concerns previously raised by the Commonwealth regarding the assessment of the level of biodiversity impacts, the adequacy of efforts to minimise impacts and the value of the proposed biodiversity offset package. The Commonwealth submission (dated 10 May 2012) stated that the T4 project would have a significant impact on migratory shorebirds and the proposed mitigation measures would have a limited effect. These issues were consistent with those raised by the Hunter Bird Observers Club, which believes Tomago is not a suitable habitat for the migratory shorebirds. The Commission noted that resolution of these specific concerns was not explained in detail in the Department’s assessment report and as a consequence, the Commission sought clarification from the Commonwealth. A summary of the issues raised in 2012 and the Commonwealth’s updated advice is provided in the table below: Table 3 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding Migratory Shore Birds

Issues raised in Environmental Assessment submission (May 2012)

Updated advice from Commonwealth (October 2014)

Impact on migratory shorebirds and habitat

The project will result in highly significant impacts on migratory shorebirds by removing habitat and having indirect impacts on two significant wetlands ‐ Deep Pond and Swan Pond.

During the earlier stages of the assessment process, there was a lack of complete information about the different migratory bird habitats on the site and the extent of impact. This meant that a more precautionary approach was warranted, particularly with regard to the dredge return channel. The Proponent has since provided more complete and better quality information about the presence and behaviours of shorebirds on the site. As a result, the impacts are considered to be of lesser significance ‐ although residual impacts will still require mitigation and an offset.

Offsets If successful, the Tomago site will achieve an appropriate offset. The offset must be proven prior to the impact


The proposed wetland habitat creation at Tomago appears to have the potential to adequately compensate for the loss of shorebird habitat from the impact site. However, the habitat will need to be created and demonstrated to adequately offset the impacts of the proposal prior to the impact occurring to be acceptable as an offset

occurring. Any conditions of approval will need to include a set of practical, operational requirements which relate to monitoring and evaluating its success.

A single season that shows successful use of the site by shorebirds (including the full range of species abundance and effective foraging and breeding habitats) will be acceptable in terms of proving the success of the offset. However, several seasons of monitoring may be necessary prior to reaching this point.

The Commission acknowledges that there will be some impacts upon migratory shorebirds on the project site. However, based on the advice received from government agencies, the Commission accepts that the Tomago offset site has the potential to provide an acceptable offset and potentially a net conservation gain for the hunter estuary. To ensure its viability, the Commission is of the view that the Proponent would need to demonstrate that the Tomago offset area is functioning successfully prior to commencing construction of the coal loader facilities at the project site. While the Commonwealth recommends one successful year (migratory season), the Commission recommends the earthworks, vegetation plantings and water control measures would need to be in place for a minimum of three years in order for the success of the offset strategy to be fully demonstrated before there is any impact on the wetlands on the proposed T4 site.

4.1.2 AUSTRALIASIAN BITTERN

Impact The Australasian Bittern is endangered under both the NSW Threatened Species Conservation Act 1995 and the Commonwealth EPBC Act. The species is in decline, predominantly due to modification and incremental degradation/loss of habitat. The project site contains 27 hectares of wetlands suitable for the Australasian Bittern. Surveys have been undertaken on behalf of the Proponent as well as the Hunter Bird Observers Club, which suggest that the species occurs at the site at relatively high density. Although the existing wetlands are situated in a highly disturbed environment, in 2012 the habitats were reported by Umwelt Ecologists to be in good condition based on the number of birds recorded. The proposed development requires the complete removal of the Australiasian Bittern habitat at the site (with the exception of the GGFC corridor), meaning the impacts on the species would be significant. Offset strategy In order to offset the impacts on the Australian Bittern, an offset strategy is proposed across three locations in the Sydney Basin Biosphere. These are discussed below: Tomago The Tomago offset site includes the conservation of 11 hectares of Freshwater Wetland Endangered Ecological Community (EEC), the restoration of saltmarsh habitat and the construction of shallow tidal lagoons. It would be designed to support comparable habitat features to those within the adjoining Hunter Wetlands National Park and Hunter Estuary Ramsar site. Given its location, Tomago has the potential to provide habitat for the same geographically distinct regional population of


Australiasian Bitterns found on the project site (though it is noted that it currently does not support a viable population). The Proponent predicts that if the offset site does not proceed, the potential for Australiasian Bittern habitat at Tomago will be reduced over the next 10 years. This is due to the deterioration of floodgates controlling tidal flows into the site and the encroachment of Swamp Oak forest. The Commonwealth advised the Commission that although it cannot draw any conclusions regarding the likely effects of these processes, it accepts the Proponent’s assumptions. Brundee offset site To further offset the impacts of the project on the Australiasian Bittern, the Proponent has an agreement to purchase land adjoining the Brundee Swamp Nature Reserve. The land is located 250 kilometres south of the project site, within the Shoalhaven local government area. It is proposed to secure and conserve 135 hectares of known Australasian bittern habitat by providing permanent wetland habitat for the species. The Proponent has indicated that current land use practices on the Brundee offset site (including grazing and slashing) are causing ongoing degradation of the site and there is potential to improve its condition. Advice received from the Commonwealth in October 2014 suggests that the ongoing management of Brundee to explicitly provide habitat for the species (and the GGBF) increases the likelihood of the habitat quality improving within 10 years. The Commission accepts this advice and considers the regeneration of Australiasian Bittern habitat at Brundee would be a positive legacy of the proposed T4 development. Ellalong Lagoon offset site The Proponent has secured an offset site at Ellalong Lagoon within the Cessnock local government area. The offset site is located 40 kilometres west of the project site and is 409 hectares in size. It provides a further 35 hectares of Freshwater Wetland EEC and is a potential drought refuge for the Australasian bittern and other waterbirds. No objection or concern has been raised by the OEH or the Commonwealth in relation to this offset area. Commonwealth advice The Commonwealth initially raised concerns in relation to the impact of the proposal on the Australian Bittern and the proposed offset strategy. Advice sought from the Commonwealth in October 2014 included an update on these issues, the response to which is summarised in Table 4. Table 4 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding the Australasian Bittern



Impact on species and habitat

The EA states that the proposal would have a significant impact on a "geographically distinct regional population" of the Australasian Bittern, which is listed as an endangered species under the EPBC Act.

The impacts to the Australiasian Bittern will need to be mitigated and/or offset (see below).

Offsets

The proposed offsets do not adequately

The Tomago offset site accounts for a small proportion of the offsets required for the bittern.


compensate for the loss of habitat for the Bittern when assessed using the Department's Offsets Assessment Guide.

A reduction in impacts or additional offsets will be required to adequately offset the stated impacts of the proposal on this species.

Given that the population being impacted is geographically distinct, it would be most appropriate if any additional offsets were located within the area occupied by the population.

Most of the offset will be provided at the Brundee site. This is considered acceptable if proven to be successful.

Based on the type of management proposed and the habitats present, the ecological benefit could potentially be achieved at Brundee within 10 years.

If, as proposed above, the designed configuration of the stockyard is refined to reduce the extent of the incursion into the Deep Pond and adjacent ponds along the rail corridor, while still allowing remediation plan objectives to be met, the overall impact on Australasian Bittern habitat can be further reduced. Based on the updated advice received from the Commonwealth and the conditions recommended by the Secretary, the Commission is satisfied that any residual impacts of the proposal upon the Australasian Bittern can be adequately offset.

4.1.3 GREEN AND GOLDEN BELLFROG (GGBF) Impact The GGBF is listed as endangered under the Threatened Species Conservation Act 1995 and vulnerable under the Environment Protection and Biodiversity Conservation Act 1999 (EPBC Act). The species has become threatened as a result of habitat loss, predation and disease, however the population on Kooragang Island remains the largest in the Hunter region. The GGBF has been repeatedly and extensively recorded within the 5.8 hectares of breeding habitat on the project site, which would be cleared as part of the proposed development. Mitigation and offsets A range of measures are proposed by PWCS to avoid, mitigate and offset the expected impact of the proposal on the existing GGBF population on the site. These are outlined in the Secretary’s assessment report (Section 5.3, Table 5) and the primary elements are discussed below: Proposed habitat corridor As part of the offset strategy, the Proponent has designed a GGBF corridor across Kooragang Island to provide connectivity across the site and between the National Park and Ash Island. The corridor will be a minimum of 12 hectares and will include 4.7 hectares of wetland, as well as terrestrial and breeding habitat. The Commission recognises the importance of conserving the GGBF in the Hunter and supports the establishment of the corridor. In August 2014, the Commission inspected trial ponds on the subject site, which were installed in 2012 having been designed as part of research into best practice methods. Based on data collected in January 2014, there is evidence that successful breeding has been recorded in the trial ponds. The Commission’s earlier recommendation to redesign the proposed

stockyard to reduce the impact on Deep Pond will also assist in minimising the impact on the GGBF if the adjacent ponds known as ‘frog pond’ and ‘railway pond’ along the rail corridor can also be protected. While the Commonwealth and OEH support the habitat corridor, they have indicated that further refinements need to be made and a refuge is needed for frogs that become displaced during construction. This may include the successful installation of temporary habitat (similar to the trial


ponds) prior to removing inhabited areas across the project site. The Commission notes that the Department has responded to these concerns in its recommended conditions (B17 to B22). It has also recommended that an Integrated Kooragang Island GGBF Management Plan be prepared in consultation with adjoining stakeholders, the OEH and Commonwealth. Brundee offset site In addition to providing habitat for the Australiasian Bittern, the Brundee offset site will also be used to further conserve the existing GGBF population. This site is referred to in the NSW Draft Recovery Plan as a stronghold for the species and is likely to be important for its long‐term survival. Although opportunities to offset the green and golden bell frog in the Hunter Region were investigated by PWCS (as outlined in Appendix J of the Response to Submissions and PPR), no areas containing known populations or habitat were identified as suitable. The Commonwealth initially raised some concern that Brundee would not adequately offset the impacts of the proposal when assessed using the EPBC Act Environmental Offsets Policy (October 2012). This is because the existing GGBF habitat at Brundee is already high quality and there is a low risk of habitat loss due to current/future zoning of the land. However, the OEH’s view is that the offset measures would likely provide appropriate numbers of ecosystem and species ‘credits'. In addition, the Commonwealth has advised that securing the land as an offset site will allow the regeneration of native vegetation and likely result in an improvement in the GGBF population. Given this, the Commission accepts that Brundee is an appropriate GGBF offset site and notes that the Department’s recommended conditions ensure that the Commonwealth, OEH and relevant Council will continue to be consulted regarding its ongoing management and conservation. Commonwealth advice The Commonwealth initially raised concerns regarding the impact on the GGBF population and the proposed offset package. These concerns were specifically referenced in October 2014 when the Commission received updated advice, which is summarised in Table 5:

Table 5 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding the Green and Golden Bell Frog

Issue raised with EA submission (May 2012) Updated advice from Commonwealth

(October 2014)

Impact on species and habitat

Permanent removal of the most important known area of breeding habitat for this population and other connected breeding/foraging habitat

Substantial reduction in the size and ongoing viability of the GGBF population on Kooragang Island

During the earlier stages of the assessment process, there was a lack of complete information regarding the different frog habitats on the site, the extent of impact and proposed avoidance and mitigation measures. This meant that a highly precautionary approach was warranted. The Proponent has since provided more complete and better quality information. As a result, the area of impact has been revised down and the effectiveness of mitigation strategies (including wetland habitat creation, creation of a movement corridor and potential new breeding areas) has been realised.

Proposed habitat corridor

The proposed habitat corridor appears to have the potential to partly mitigate the loss of GGBF habitat from other parts of the T4 site and provide connectivity between known GGBF habitat, which would otherwise be fragmented by the project.

The design of the corridor should be further refined using the best available information

The design of the proposed corridor has been refined and is one of a suite of avoidance, mitigation and offset measures. The Proponent has demonstrated the development of artificial habitats that have produced breeding frogs, which will be further monitored and refined in the context of the overall project. This point is now not considered a critical issue.


in GGBF habitat creation to ensure that it provides the maximum possible benefit to a residual population.

Offsets

Brundee does not adequately offset the impacts of losing high quality GGBT habitat on the subject site when assessed against the Commonwealth’s Offsets Assessment Guide.

A reduction in impacts and/or additional offsets would be required to reach consistency with the Commonwealth’s Environmental Offsets Policy.

Due to the initial lack of information, a more conservative view of the value of the proposed offsets was warranted. The Proponent has since provided more complete and better quality information about the Brundee offset area, and engaged the assistance of a local expert (Gary Daly ‐ GAIA Research). This process has added completeness and value to the information set, and improved the inputs into the offsets calculator. The Commonwealth is now satisfied that the proposed offsets meet the requirements of the EPBC Act. Based on the type of management proposed and the habitats present, the ecological benefit of Brundee could be achieved within 10 years.

Based on this advice, the Commission is satisfied that the impact on the GGBF can be further reduced and that any residual impacts can be adequately offset.

4.1.4 HUNTER ESTUARY WETLANDS RAMSAR SITE

Impact The Hunter estuary wetlands are listed internationally under the Ramsar Convention due to their unique mix of wetland types and importance for maintaining biological diversity and conservation of migratory shorebirds, including supporting the East Asian–Australasian Flyway population of Eastern Curlew. The Ramsar site is located within 500 metres of the project area’s northern boundary and adjoins it for approximately 1.2km. The Secretary’s assessment report states that these areas are unlikely to be directly impacted by the proposal, as no works are proposed in that area (with the exception of reinstating an estuarine channel to assist in maintaining the existing tidal regime to the wetlands). The Commission’s concern was the proposal’s potential to exceed or contribute to a breach of the Limits of Acceptable Change in habitat for the GGBF and migratory shorebirds. This could compromise the values for which it was initially nominated as an internationally significant wetland site. Mitigation and offsets The proposed impact avoidance, mitigation and offset strategies for the GGBF and migratory shorebird populations in the vicinity of the project site have been outlined earlier in this chapter. Commonwealth Advice As mentioned above, the Commission was concerned that the proposal could result in a breach of the Limits of Acceptable Change for the GGBF and migratory shorebirds on the Ramsar site. In its submission on the EA, the Commonwealth's raised this issue, however its resolution was not detailed in the Secretary’s assessment report. The Commission sought a detailed explanation from the Commonwealth, including the calculations used to assess the specific proposals against the Limits of acceptable change. In October 2014 the Commonwealth informed the Commission that additional advice had been received from the Proponent, and the Commonwealth was now satisfied that the potential impacts to the Ramsar site are within the Limits of Acceptable Change. This advice is summarised in Table 6.


Table 6 ‐ Summary of Issues raised by the Commonwealth Department of Environment regarding Ramsar Wetlands



Impact on Ramsar wetland – migratory shorebirds

The proposal has the potential to contribute both to the decline in numbers of migratory shorebirds and the number of shorebird species that occur in the Ramsar wetland. Migratory shorebirds are a critical ecosystem component of the Hunter Estuary Wetlands Ramsar site.

The creation of an appropriate offset site will balance out this potential impact.

Impact on Ramsar site – Australiasian Bittern

The Australasian Bittern is a critical ecosystem component of the Hunter Estuary Wetlands Ramsar site and is integral to the values of the wetland, since its nationally endangered status assisted the estuary in meeting the criteria for Ramsar listing.

The provision of a successful offset at Tomago would result in this concern being less relevant.

Impact on Ramsar site ‐ GGBF

The likely reduction in the size, extent, connectivity and breeding/dispersal capability of the GGBF population could threaten its continued occurrence in the Ramsar site, which could result in a breach of the Limits of Acceptable Change for the wetland.

No evidence has been provided to support the Proponent’s claim that the GGBF does not occur in the Ramsar site.

Further survey information and discussions with NSW assessment officers have resolved that there are no significant population elements in the area of the Ramsar site that is located directly adjacent to the T4 site. While it is possible that frogs may or could move into the Ramsar site, it is not considered a critical aspect (though connectivity to the Ramsar site will be maintained). It is not currently considered that impacts to the GGBF will breach the Limits of Acceptable Change for the wetland.

Based on the updated advice from the Commonwealth, the Commission is satisfied that the proposal would not directly impact upon the migratory birds or the GGBF frog to the extent that the Limits of Acceptable Change would be compromised for the Hunter Estuary Wetlands Ramsar site.

4.1.5 CONCLUSIONS AND RECOMMENDATIONS

Having carefully considered the extensive submissions and advice received from government agencies, the public and special interest groups, the Commission is satisfied that with further redesign work on the footprint of the stockyard, the impacts of the proposal can be further reduced and that any residual impact will be adequately offset by the proposed offset strategy as long as it is implemented in a timely manner. The Commission agrees with the Department that the three land‐based offset sites in combination with the proposed habitat management actions have the potential to provide for substantial threatened species habitat protection and management. The following recommendations are provided by the Commission in relation to biodiversity:

The Commission considers it is critical that the detailed design of the offset sites be prepared in consultation with government agencies including the Commonwealth, OEH and relevant Council. It is noted that the Department’s recommended biodiversity conditions (B16 to B21) adequately address this recommendation.


The Commission recommends that a five year approval, rather than the 10 year timeframe be considered. A five year approval period would provide an appropriate timeframe for the Proponent to establish the conservation works outlined in this chapter, which would have significant biodiversity benefits. Although the Commission recognises that additional work and fine turning may be required beyond the five years, subject to the learnings from the initial strategy. A ten year approval could delay these works, which could result in further degradation of habitat and loss of population.

The Commission is of the view that the Tomago offset area would need to demonstrate that is it functioning successfully prior to construction commencing at the project site. While the Commonwealth recommends one year of demonstrated success, the Commission considers Tomago should be functioning for a minimum of three years to be confident of documenting at least one successful season of use by migratory shorebirds. That is, there is considerable lead‐time to be able to demonstrate “one year of success”.

Consideration should be given to refining the stockyard layout so that it has a reduced impact on Deep Pond and the nearby Frog Pond and Railway Pond. This would provide improved GGBF and Australasian Bittern habitat as well as minimising the impact on migratory shorebirds and any potential to impact on the values of the Hunter Estuary Wetlands Ramsar site.

4.2 CONTAMINATION Under the Minister’s Terms of Reference the Commission is required to consider the contamination impacts of the project and recommend appropriate measures to avoid, mitigate and/or offset these impacts. The Commission notes that the PPR includes a number of changes to the proposal in relation to groundwater and contamination. These changes are proposed in response to the issues raised with the EA, including by the EPA, and include:

changes to the indicative construction schedule;

changes to stockyard size and layout;

removal of facilities from the southern bank of the Hunter River South Arm;

modifications to the dredging and reclamation plan;

changes to the water management system; and

refinement of the remediation and management measures.

4.2.1 BACKGROUND

The site has historically been used as an industrial waste disposal area for contaminated material, substances and general refuse associated with past activities of nearby industry and the port. Douglas Partners has undertaken extensive contamination investigations of the T4 site (see Part 7 of the EA) and found that fill substances include materials dredged from the Hunter River and waste from the former BHP steelworks and subsidiaries. The remainder of the site contains areas of localised contamination and the potential for acid sulfate soils. The site consists of three licensed landfill areas (shown in Figure 4):

Kooragang Island Waste Emplacement Facility (KIWEF);

Delta Electrolytic Manganese Dioxide (EMD) landfills; and

Fines Disposal Facility.


Landfill Closure Plans (LCPs) have been developed for the KIWEF and EMD sites as part of the process of surrendering the applicable Environment Protection Licence (EPL). The LCPs provide for the stabilisation of the landfill, management of any remnant human health or environmental risks with a view to enable future use of the site. A summary of the ownership and status of the three landfill areas on the project site are outlined in the table below:

Table 7 ‐ Ownership status of Landfill Areas on the Project Site

Site Ownership Landfill Status

Site A & B

Kooragang Island Waste Emplacement Facility (KIWEF)

Hunter Development Corporation (HDC)

This site was in operation from 1972‐ 1999.

Surrender Notice for the EPL has been issued requiring capping and closure works to Area 1 (around K2 and K10 North) to be completed by 31 December 2014; and Areas 2 and 3 (around K3 and K10 south) to be completed by 30 June 2017.

The Surrender Notice also allows works to be completed in synergy with the construction of Terminal 4 if approved.

Site C

Delta EMD waste disposal facility

PWCS This site was in operation from 1989 ‐ 2009.

EPL was varied in 2011 to require the final cap to be constructed and installed in accordance with the Technical Specification ‐ Kooragang Island EMO Facility Capping Walks and the Construction Quality Assurance Plan ‐ Kooragang Island EMO Facility Capping Walks.

The existing licence must be surrendered should T4 be approved and constructed.

Site D

Fines Disposal Facility

PWCS This site has been in operation from 1993 and licensed from 2001 to receive and treat fines dredged from the Hunter River for coal terminal expansion works at Kooragang Coal Terminal.

This site has been periodically filled with material dredged from the Hunter River. EPL applies to the site and a LCP has not been completed. If T4 is approved and constructed, a LCP will be prepared and the existing licence will be surrendered.

4.2.2 PROPOSED REMEDIATION AND REHABILITATION

A summary of the remediation and rehabilitation measures proposed by PWCS to address the risks associated with existing contamination on the site is provided in Table 9 of the Secretary’s assessment report. This includes capping, barrier walls and extracting and treating contamination. Excavation and disturbance of contaminated material would be minimised during construction, as most works would occur within the upper fill layers, avoiding the need to impact on the underlying contaminated layer. Key areas of contamination within the project area will be managed or remediated through the implementation of a RAP prepared as part of the PPR. The RAP has been reviewed by an auditor accredited by the NSW Environment Protection Authority (EPA) under the Contaminated Land Management Act 1997. The auditor has issued an ‘interim opinion’ which states that the RAP


adequately addresses the key contamination issues identified, and provides adequate options for remediation measures. The final RAP will also be reviewed by the auditor and a site audit statement report prepared. As part of the PPR, PWCS has prepared an integrated LCP that combines the existing LCPs for the site’s landfill areas and includes the Fines Disposal Facility (Site D). The integrated LCP details the proposed capping of areas that would be impacted by construction and operation of the coal terminal. The Commission understands that the LCP would result in an optimal outcome for the project site, as the capping associated with construction of the terminal would be equivalent or superior to that already approved for the KIWEF and the Delta EMO land. Construction of a low permeability stockyard and sealed surfaces will form a cap over land owned by PWCS. The capping and closure works on the HDC land do not form part of the proposed works for the T4 project. The existing EPL Notice to Surrender requires the works to be completed by December 2014 (Area 1) and June 2017 (Area 2), but also allows capping and closure to occur as part of the construction of Terminal 4 (if approved). The Commission acknowledges that the timing for commencement of construction is unknown due to the uncertainty surrounding the global export demand for coal. It is concerned that the remediation works required to be completed by June 2017 may not be funded by the Proponent as it may not have activated an approval by that time. Further, a 10 year approval could delay remediation and rehabilitation of the remainder of the project site in accordance with the integrated LCP. The Commission considers a five year approval to be more appropriate than a 10 year approval. Ideally the various timeframes for the different remediation works on the site should be resolved prior to any determination of the proposal. This would provide greater certainty and cost effectiveness regarding the rehabilitation of the project site which is a significant public interest consideration. As a first step in resolving the remediation of the site, the Commission is of the view that the Proponent, the EPA and the HDC need to negotiate and develop a comprehensive cost effective remediation strategy, before a determination is made. The Commission considers that if the Proponent was to commit to a comprehensive and cost effective remediation strategy of the site, this would resolve the significant public benefit uncertainties associated with the project while also triggering the commencement of the project providing the Proponent ongoing certainty about the development potential of the site. If approval is not granted for the proposed coal terminal, PWCS would prepare and implement a LCP for the Fines Disposal Facility land and implement the existing LCP for the Delta EMO. Closure and capping of all other areas would remain the responsibility of HDC, requiring temporary capping at public expense.

4.2.3 DREDGING MATERIALS AND GROUNDWATER

The Secretary’s assessment report explains that during the initial works phase, excavated natural material or solid waste material with a low likelihood of contamination will be dredged from the Hunter River South Arm. Investigations by Douglas Partners have found that the underlying sand is suitable to be used as fill on the Delta EMD site and stockyard area, as well as parts of the land owned by Newcastle Port Corporation and HDC. An ultimate cap on top of the fill would make any previously constructed or historical underlying caps redundant. The potential duplication of capping works which might be undertaken by the HDC brings into question the most appropriate expenditure of public money.


The dredge return water would flow along a temporary fill channel with low permeability barriers prior to discharge to the Hunter River at a point west of Sandgate Bridge. The low permeability barriers in Deep Pond would limit migration of saline water to groundwater and wetlands to the north‐west and south. Any waste material not able to be re‐used as general fill would be placed in a purpose built containment cell within the project site or treated (if required) and disposed of at an appropriately licenced facility offsite. The Commission supports the Department’s recommended condition which requires the preparation and implementation of a Materials Management Plan to manage any potentially contaminated material not covered by the LCP or the RAP. A fill aquifer and an estuarine aquifer are located under the project site. The fill aquifer is located above the estuarine aquifer and is separated by an impermeable layer (aquitard). A barrier wall is proposed to be installed on the KIWEF area to contain and treat contaminants in groundwater and avoid disturbance across the fill aquifer. The Commission accepts the advice of Douglas Partners that the vertical movement of saline water into the estuarine aquifer is unlikely to occur due to the thickness and low permeability of the clay aquitard in this location. The proposed barrier wall is more permeable and therefore water is more likely to flow through it. The proposed contaminant management measures are shown in the Secretary’s assessment report (see Figure 5) and are predicted to lead to an overall decrease in long‐term flow rates and mobility of contaminants compared to the current situation. There will be some short term and temporary increases in groundwater flow rates and levels of surface water bodies as groundwater is "squeezed" out during the pre‐loading phase. However, once settlement is complete and the site is capped, ground flow in the fill and estuarine aquifers would be reduced to below existing levels for the majority of the site, resulting in a long term reduction in contamination mobility. Concern was raised at the Public Hearing that the works required to contain contamination prior to the development commencing pose a higher risk of dispersion than if the current operations on the site were to continue. A groundwater and contamination assessment has been prepared by Douglas Partners which examines the effectiveness of the proposed contamination remediation and management measures in limiting off‐site migration of contaminants. It was found that by adopting the proposed contamination management measures, off‐site contaminant levels would not increase to an extent that would threaten environmental values or human health. These measures will improve the long‐term environmental condition of the project site and surrounding land by addressing the risks associated with existing contamination.

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Figure 4: Landfill areas (Source: T4 Project Response to Submissions and PPR (EMM 2013))

Fines Disposal Facility

former Delta EMD site

KIWEF

30

Figure 5: Proposed contamination management and remediation measures (Source: T4 Project Response to Submissions and PPR (EMM 2013))


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4.2.4 EPA ADVICE

In 2012 the EPA provided a submission to the EA, which raised the following points in relation to contamination issues associated with the project site:

The contamination assessment presented in the EA is generally adequate and identifies likely impacts on existing contamination at Kooragang Island;

The EA does not provide adequate information regarding the quality of the sediments likely to be encountered during dredging operations;

Additional details of the proposed contaminated groundwater control works and measures are required;

The Proponent needs to assess the potential impact on existing groundwater contamination if saline groundwater is reinjected or allowed to seep into the groundwater table.

The Commission met with the EPA in Newcastle on 14 August 2014 to discuss the revised proposal and additional information received by the Department as part of the PPR. At this meeting the EPA explained that while the RAP is supported, there was still concern about the management of dredging and the potential impact on Deep Pond. The EPA also explained that if the development of T4 does not proceed, the site will need to be capped and remain that way ‐ pending any future development. Correspondence received by the Commission on 25 August 2014 from the EPA confirmed that the draft conditions recommended by the Department address the majority of the EPA’s concerns. However, the EPA believes that the conditions relating to stormwater and surface water management need additional detail. It was also recommended that Condition B32 be amended to reference a one in 100 year average recurrence interval discharge event, which is consistent with the PPR and EA. Further correspondence from the EPA reviewed by the Commission on 10 October 2014 provided recommended revised wording and additional conditions relating to the RAP and surface water management. The EPA has provided a table detailing these amendments, which the Commission agrees should be included in any future approval. A copy of the table summarising the proposed amendments is contained at Appendix 6 of this report. The recommended conditions would have the effect of requiring that final capping works must be implemented and completed prior to any dredge material emplacement, preloading or construction at the project site. This will ensure that if a staged approach is undertaken by PWCS, and dredging preloading or construction is delayed, existing groundwater contamination is managed by limiting surface water infiltration.

4.2.5 CONCLUSIONS AND RECOMMENDATIONS

The Commission is of the view that the integrated LCP and RAP will adequately manage the remediation of the project site for its intended use, and reduce the risk of offsite contamination. It is recognised that applying a consistent level of capping that is equivalent to or better than that currently proposed across individual land parcels would be beneficial. Therefore, the Commission agrees with the Department that the proposed management of contamination would result in a positive contribution to the environment and human health when compared to the current landfill arrangements. If however the project is approved but construction is not commenced for up to ten years, as proposed, then the current requirements for remediation could be put on hold for that period.


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The following recommendations are provided by the Commission in relation to contamination and remediation:

The Commission believes that the contamination on Kooragang Island needs to be remediated as soon as practicable. Before a determination is made, the Commission recommends that the Proponent, the EPA and the HDC negotiate and agree on a comprehensive remediation strategy, with clear roles and responsibilities, and an agreed time‐table.

A five year approval (rather than the proposed 10 year approval) would provide increased certainty and would ensure that the remediation process is not unnecessarily delayed.

The Commission recommends adoption of the amendments and additional conditions recommended by the EPA in the correspondence dated 10 October 2014. In addition, Condition B32 should be amended to reference a one in 100 year average recurrence interval discharge event, (as in correspondence from the EPA dated 25 August 2014).

4.3 AIR QUALITY AND ASSOCIATED HEALTH IMPACTS The Commission’s terms of reference for the Review require it to pay particular attention to the noise and air quality impacts of the project. Many of the submissions received, and presentations made during the public hearing, also raised concerns about air quality. Of particular concern was the potential for the proposed T4 Coal Terminal to impact on air quality (especially particulate levels) in the Newcastle region, with associated health and amenity implications for the Newcastle population, as well as those who live in the vicinity of railway lines used by coal trains delivering coal to the T4 Terminal.

4.3.1 CURRENT PARTICULATE LEVELS AND STANDARDS

Australia has adopted ambient air quality standards as a National Environment Protection Measure (NEPM), as set out in Table 8. The Air Quality NEPM have been the subject of review in recent years and at the time of writing draft amendments had recently been exhibited. NSW has adopted impact assessment criteria for particulates consistent with the NEPM standards, as well as additional standards including; an annual average value for PM10 , Total suspended particulates, and Deposited dust, as set out in Table 9. Table 8 ‐ Current NEPM Standards and Goal for particulates (as varied in 2003)6

Pollutant Averaging period Maximum (ambient) concentration

Notes

Particles as PM10 1 day 50 µg/m3 Maximum allowable exceedances, 5 days a year*

Particles as PM2.5 1 day 25 µg/m3 Reporting standard. Goal is to gather sufficient data nationally to facilitate a review of the standard as part of the review of this Measure scheduled to commence in 2005.

1 year 8 µg/m3

* Allowable exceedances relate to bushfires, dust storms and fuel reduction burning for fire management purposes.

6 National Environment Protection (Ambient Air Quality) Measure, Schedule 2, http://www.comlaw.gov.au/Details/C2004H03935 accessed 6 November 2014.


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Table 9– NSW EPA Impact Assessment Criteria for Particulates7

Pollutant Averaging period Concentration Source

PM10 24 hours 50 µg/m3 NEPC (1998)

Annual 30 µg/m3 EPA (1998)

Total suspended particulates (TSP)

Annual 90 µg/m3 NHMRC (1996)

Deposited dust Annual 2 g/m2/month (Maximum

increase in deposited dust level.)

NERDDC (1988)

Annual 4 g/m2/month (Maximum total deposited dust level.)

NERDDC (1988)

Several submissions from agencies and the pubic referred to the current review of the NEPM standards and some suggested that the proposed new standards in the current discussion paper should be adopted for this project given its proposed long development and operating periods. The Commission’s approach to the draft standards is discussed later in this section. Air Quality monitoring data for the Newcastle area is publicly available from the Office of Environment and Heritage’s website for Beresfield, Wallsend, Mayfield, Carrington and Newcastle (near Hamilton South). The Mayfield and Carrington monitors have only recently been installed, so very little data is available from these monitors. As shown in Table 10 air quality has fluctuated over the years. The Commission has not undertaken statistical analysis of the available data, but from a general overview, particulate levels across the region, to which the broad Lower Hunter population are exposed do not appear to have changed dramatically over the last decade and a half. Table 10 ‐ Annual Average PM10 and PM2.5 levels (sourced from OEH air quality data)

Year PM10 Wallsend µg/m3

PM10 Beresfield µg/m3

PM10 Newcastle µg/m3

PM2.5 Wallsend µg/m3

PM2.5

Beresfield µg/m3

1997 18.5 19.5 6.5

1998 17.1 18 5.4 5.1

1999 16 16.9 4.9 5.6

2000 17.8 5.3 5.6

2001 17.8 21.5 7

2002 21.3 27.1 8.1 10.3

2003 18.1 19.1 6.6 6.2

2004 18.7 20.9 6.7 7.8

2005 18.2 20.3 21.6 6.5 6.8

2006 18.5 21.3 21.1 6.4 6.8

2007 17.3 20.4 5.8 6.3

2008 15.4 18.5 20.6 5.9 6

2009 26.7 28.7 31.3 8 8.6

2010 14.9 16.6 18.7 4.7 6

7 NSW Department of Environment and Conservation. 2005. Approved Methods for the Modelling and Assessment of Air Pollutants in New South Wales. P 28 http://www.epa.nsw.gov.au/resources/air/ammodelling05361.pdf accessed 6 November 2014.


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Year PM10 Wallsend µg/m3

PM10 Beresfield µg/m3

PM10 Newcastle µg/m3

PM2.5 Wallsend µg/m3

PM2.5

Beresfield µg/m3

2011 14.2 17.2 19.1 4.8 5.5

2012 14.9 21.4 20.6 5.1 8

2013 21.5 22.6 7.6 8.3

2014* 15.8 18.5 19.7 6.4 7.3

Average 17.7 20.3 21.7 6.2 6.9

Maximum 26.7 28.7 31.3 8.1 10.3

Minimum 14.2 16.6 18.7 4.7 5.1 * year to date (1 January 2014 – 7 October 2014)

The Proponent’s Environmental Assessment summarises PM10 monitoring data from other monitors at Fern Bay, Steel River and Stockton for the decade to 20108. That data shows that the current NSW annual average criteria, of 30 µg/m3, was exceeded in some years in the early part of the new millennium. Some speakers at the public hearing suggested Newcastle’s air quality is relatively poor. The air quality monitoring data does not support this view. The Commission notes that air quality across the region is generally within the NSW criteria but acknowledges that there may be individuals with specific exposure sensitivities close to emission sources who report localised health effects which are not problematic across the wider regional population.

4.3.2 IMPACTS OF THE PROJECT

Air emissions would be produced from a range of sources and activities associated with the project, and can be broadly categorised as:

Loading and unloading of coal on the site, including the transfer of coal to and from the

stockpiles;

Storage of coal on the site, emissions from the stockpiles;

Transport of coal to and from the site, including the emissions from loaded and unloaded

coal trains and the emissions from ships; and

Other up and downstream impacts, including upstream emissions from extracting the coal

resource and transporting it to the site and downstream emissions from transport and use

of the coal at its destination.

4.3.2.1 EMISSIONS FROM THE PROJECT SITE

The Proponent has estimated the emissions from the project site taking into account mitigation measures such as water sprays and also enclosure of some (and partial enclosure of some other) equipment. The EA has included the emissions from the use of rail locomotives and ship boilers and auxiliary engines while on site or at the port. The coal stockpiles on site are proposed to be left uncovered, but would be sprayed with water, which is said to have a control efficiency of approximately 67% (modelling has assumed 50% efficiency)9. Transfer equipment including the rail receival dump station, conveyors and ship loaders would be at least partially enclosed with efficiency control of between 70 to 85% at each source.

8PWCS/EMM. 2012 T4 Project, Environmental Assessment. February 2012. Appendix M Figure 15, p 35 9 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013. Appendix C p 22


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The Proponent has modelled air quality impacts of the activities that would occur on the project site, taking into account the control measures proposed; and considering existing air quality levels, additional emissions from some currently proposed or approved developments (which have yet to be constructed) and the potential emissions from this site.

BackgroundlevelsadoptedbytheProponent’smodellingThe background air quality levels used have been criticised in submissions as the data is not the most recent available and particulate levels were lower that year (2010), than some other years. Particulate levels fluctuate over time (see Table 10) and will continue to do so. Nonetheless, the Commission considers that the background levels adopted by the Proponent are at the lower end of the range measured over the past decade. For PM2.5 the Proponent has adopted an annual average background level of 4.6 µg/m3 and up to an additional 0.9 µg/m3 for future development. For PM10 the Proponent has adopted an annual average background level of between 17 µg/m3 and 17.7 µg/m3 depending on the location with up to an additional 2.6 µg/m3for future development. In responding to criticism of the background levels adopted, the Proponent indicated it undertook a sensitivity analysis which considered the maximum concentrations measured during the 2007 to 2011 period, but excluded ‘atypical’ results from the 2009 regional dust storm. The Proponent advises that this substitution of maximums into the cumulative assessment did not result in any exceedance of the annual average EPA PM10 criteria, or NEPM PM2.5 goals

10. The Commission acknowledges this, but notes that:

since 2011 annual average PM10 and PM2.5 levels have generally been higher than levels measured during the 2007‐2011 period; and

in relation to the exclusion of ‘atypical’ results associated with regional dust storms, the Commission is not aware of any allowable exception for these events when considering annual average particulate levels. For 24 hour average PM10 levels the NEPM does allow “5 exceedances for the PM10 standard [explaining these] were introduced to account for the impact of bushfires, dust storms and fuel reduction burning for fire management purposes. These exceedances are often misused and have been applied to urban air pollution and, in some cases, individual sources”11.

Nonetheless, given the uncertainties about the timeframe for developing the project and the criteria that would apply at that time, the predicted contribution from the project is perhaps the more useful measure.

EmissionssourcesFor PM2.5 the Proponent has predicted that the ships at the dock would generate the highest contribution, followed by the wind erosion of the stockpiles, train idling, train unloading, stacker reclaimers and conveyor transfers12. The preferred project report noted that the locomotive combustion emissions had been underestimated in the original assessment as it had assumed that locomotives would be compliant with Tier 2 emissions performance. The Commission understands there is no emission control requirement in place for rail locomotives at present and consequently it is appropriate that the Proponent has taken a more conservative approach to estimating the combustion emissions from the rail locomotives. The standards for ship fuel and rail and ship engine

10 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013. Appendix C 11 National Environmental Protection Council Service Corporation. 2011. National Environmental Protection (Ambient Air Quality) Measure Review – Review Report. p 30 12 PWCS/EMM. 2012 T4 Project, Environmental Assessment. February 2012. Appendix M


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emissions performance are expected to improve in the future, and acceptable and achievable mitigation measures are also likely to evolve (this is further discussed in the following sections). For PM10 wind erosion from stockpiles is the highest contributing source, followed by vessels at berth, stacker reclaimers, conveyor transfers and then combustion emissions from locomotives.

EmissionscontributionThe Proponent has undertaken modelling to predict the dispersion patterns of the emissions that the project would produce. Ten locations around Newcastle were modelled with the highest predicted impacts in Sandgate. The Proponent has modelled three different scenarios:

construction;

operation at a throughput capacity of 25 million tonnes a year while construction continues

on other portions of the site; and

operation at maximum capacity, 70 million tonnes a year.

As shown in Table 11, the impacts of the project are predicted to be highest during the combined construction and operations at 25 million tonnes a year scenario. Table 11– Highest predicted particulate emissions contribution from the project at Sandgate, under different stages of development

Contribution during construction only (µg/m3)

Highest predicted contribution, operations at 25 Mtpa and construction (µg/m3)

Contribution duringoperations at maximum capacity (70 Mtpa)( µg/m3)

24 hour average PM10 15 17.9 6.8

24 hour average PM2.5 3.3 4.7 4.0

Annual average PM10 2.2 2.5 1.0

Annual Average PM2.5 0.5 0.7 0.6

Other suburbs are predicted to have higher background levels, particularly Stockton North, so although the contribution from the project would be smaller at these locations, the cumulative levels would sometimes exceed those at Sandgate. The Proponent’s modelling of the cumulative impacts of this project’s emissions combined with its adopted background levels, and contributions from future development suggests that the project would not cause any additional exceedances of the existing criteria for PM10 and PM2.5 during any of the scenarios modelled. As noted earlier in this section, the Commission has some reservations about the background levels adopted.

AcceptabilityofthepredictedimpactThere are at least three aspects which need to be considered to determine the acceptability of the predicted impact;

1. does the proposal include all reasonable and feasible measures to minimise and manage

emissions from the site?

2. do the predicted impacts meet the health and environmental standards for the protection

of regional air quality?

3. Are the current air quality standards appropriate for this proposal?

CurrentpolicyandregulatoryrequirementsThe Department’s preliminary assessment is supportive of the control measures proposed, particularly the real time predictive and reactive air quality control system as well as the Proponent’s ongoing commitment to minimise dust. The Department has also accepted the Proponent’s


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argument that the proposal would not cause any exceedance of the annual average PM10 criteria for NSW set out in the Approved Methods for the modelling and Assessment of Air Pollutants in NSW, of 30 µg/m3, nor any further exceedances of the 24 hour average PM10 criteria. During its meetings with the Commission (summarised in Appendix 3) the NSW EPA has also indicated it is generally satisfied that the proposed mitigation measures represent best practice. Nonetheless the Commission noted that some submissions and speakers at the Public Hearing had raised concerns that the proposal did not represent current best practice control of fugitive emissions. The EPA agreed to consider the points raised and provided a written response to the Commission, dated 10 October 2014. In that response the EPA notes that some conveyors would only be partially enclosed, but that this is due to operational restrictions and where machinery is required to travel along the conveyor. The EPA also noted concerns had been raised about stage loader/crusher activities, but clarified that it understood this crushing or resizing activity would not be occurring on the site. Ultimately the EPA concluded that “implementation of proactive, real‐time best practice management measures are critical to minimise the risk of dust impacts from the proposed project” 13. Health concerns were raised by numerous speakers at the public hearing, and in submissions. NSW Health’s submission dated 17 November 2013 stated “The health effects of exposure to PM2.5 and PM10 are well established. As the proponent’s response to submissions acknowledges, no threshold has been identified below which exposure to PM is not associated with health effects. Compliance with air quality standards is not, therefore, completely protective of health. The lack of identified threshold is recognised in the National Plan for Clean Air, a goal of which is to develop an “exposure reduction framework” that will encourage reductions in population exposure to PM, even where the standards are met. … While the modelled air quality impacts comply with the current EPA assessment criteria, should the project be approved it is recommended that the proponent is required to implement all reasonable and feasible measures to control emissions of PM2.5 and PM10 from all sources. This will ensure that any health impact is minimised.”14 The Commission met with senior representatives from NSW Health on 1 October 2014. NSW Health referred to the World Health Organisations most recent findings on particulates15, which emphasises the health risks associated with fine particles (PM2.5) but also that, although “Data from clinical studies are scarce; toxicological studies report that coarse particles can be as toxic as PM2.5 on a mass basis.16” At the Commission’s request NSW Health considered the risks associated with the project related PM2.5 emissions and subsequently provided the Commission with a written response to this issue. NSW Health’s letter is included in Appendix 6 of this report and generally concludes that the health risks associated with the predicted PM2.5 emissions would be classed as tolerable and an order of magnitude lower than that which is considered unacceptable. NSW Health’s letter goes on to highlight that although assessment criteria are not expected to be breached “it is not unlikely that future standards will be different to today’s” and conditions should include the requirement to mitigate the impacts of particulate matter.

13 NSW EPA 2014. Correspondence to the PAC. Dated 10 October 2014 p 2 14 NSW Health, Hunter New England Local Health District. 2013. Letter to the NSW Department of Planning and Infrastructure titled Port Waratah Coal Services Limited Response to Community Submissions – Terminal 4 project, dated 17 November 2013. 15 WHO 2013. Review of evidence on health aspects of air pollution – REVIHAAP Project: Technical Report. http://www.euro.who.int/__data/assets/pdf_file/0004/193108/REVIHAAP‐Final‐technical‐report‐final‐version.pdf accessed 3 November 2014 16 WHO 2013. Review of evidence on health aspects of air pollution – REVIHAAP Project: Technical Report p 11


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AppropriateAirQualityStandardsAs noted earlier in this section (and in submissions, including NSW Health’s letter), the recently exhibited Draft NEPM amendments propose tightening and additions to the existing particulate air quality standards in Australia. These included possible lowering the 24‐hour average PM10 level from 50 to 40‐50 µg/m3

, introducing an annual average PM10 of 20 µg/m3 (this is consistent with the World

Health Organisation goal but lower than the level of 30 µg/m3 currently adopted by the EPA for NSW), and introduction of standards for PM2.5 (there are currently no standards for PM2.5, only reporting goals). The associated Impact Statement, released for consultation was open for comment up until 10 October 2014, so a decision on the final levels adopted may still be some time away. The Department has proposed to provide the Proponent with an approval that would only need to be acted on within 10 years of any determination to approve the project. In this scenario, it is possible, if not likely, that knowledge of health impacts will continue to evolve and the review of the standards will be finalised before the Proponent even commences construction, let alone any operations. The Commission has a number of concerns about the proposed 10 year lapsing period noting that most, but not all developments are limited to 5 years to commence works before the approval would lapse. The Department provided examples of developments that have been approved with 10 year commence periods, however the Commission considers that there are several uncertainties for this proposal (these are also discussed in other sections of this report) that are likely to change during a ten year period. It is unclear if, and how any new tighter standards might apply to this project. Normally the contemporary standards at the time of approval would apply and it would be up to the regulatory authority, eg the EPA, to consider application of any future standards through its ongoing licensing system. This generally precludes however, major redesign or limiting maximum throughput below those approved in the planning approval. Consequently the Commission considers any approval should be for a 5 year period. By considering a 5 year approval period, the Commission can assess the application against the existing NSW Impact Assessment Criteria17. ConsiderationagainstEnvironmentalStandardsThe Commission has some concerns about the suitability of the background air quality levels used in the air quality modelling (which excluded impacts from the 2009 dust storm in the consideration of cumulative impacts). The resulting modelling, which shows the project will meet the existing NSW Air Quality Standards, are potentially somewhat optimistic. Given that there are already occasional exceedances of air quality standards in the Newcastle area, it could be argued that any additional emission, no matter how small, should be disallowed. This approach would however go against a common sense approach of targeting the most cost effective means of achieving net air quality improvements. The proposed site is within the industrial precinct on Kooragang Island with the Hunter River and additional industrial land sitting between the site and residential areas. Given its location, the Commission is satisfied that even allowing for some uncertainties around modelling assumptions, the net contribution to particulate emissions in the Newcastle area from a fully operational T4 would be modest. Nonetheless, the Commission considers that adaptive management will be critical to ensuring the project meets contemporary requirements and does not impede on the development potential of

17 NSW Department of Environment and Conservation. 2005. Approved Methods for the Modelling and Assessment of Air Pollutants in New South Wales. P 28 http://www.epa.nsw.gov.au/resources/air/ammodelling05361.pdf accessed 6 November 2014.


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the remaining industrial and port side lands. NSW Health has highlighted that the Proponent should be required “to implement all reasonable and feasible measures to control emissions of PM2.5 and PM10 from all sources”18 to ensure health impacts are minimised. Further the NSW EPA has indicated “implementation of proactive, real‐time best practice management measures are critical to minimise the risk of dust impacts from the proposed project” 19. ReasonableandFeasiblemitigationandmanagementThe Proponent argues that the proposal is already committed to include best practice mitigation measures on the T4 site. Some submissions have noted however that another recently proposed coal terminal in Western Australia included enclosure of stockpiles to further mitigate particulate emissions. The Commission accepts the Proponents advice that full enclosure of the T4 terminal would be technically challenging and prohibitively expensive. The Commission also notes that for the smaller particle fractions (PM2.5) the emissions from the stockpiles are predicted to be less significant than those from vessels at berth; while locomotives are also predicted to account for significant PM2.5 emissions from the site. ShipsThe Commission acknowledges that some of the most significant sources of particulate emissions are associated with ships and locomotives, and to some extent beyond the control of the Proponent. Options to manage emissions from ships both at dock and in the vicinity of a port are available however and have been considered in work commissioned by the EPA, such as “Potential Measures for Air Emissions from NSW Ports: Preliminary Study”20. This study assessed ship emission control methods including:

Low sulfur fuel at berth;

Low sulfur fuel in NSW Greater Metropolitan Region;

Shore Power, including the possibility of cogeneration;

Vessel Speed Reduction; and

Prohibiting ship on‐board incineration.

Of these options, the use of low sulfur fuel was found to have the greatest potential benefit in reducing PM10 and Sulfur Dioxide emissions. While a 20% vessel speed reduction at sea would have the greatest mitigation effect on Nitrogen Oxides. Supply of shore power while ships are at berth would also have benefits, although there is a high capital cost associated with installing shore power, both at the port and on the vessels. Nonetheless, once installed the cost of electricity was said to be less than that of diesel fuel and would also reduce auxiliary engine maintenance costs. The study found that “Some recently developed berths have been required under planning approvals to make spatial provision for shore power, should it be used in future”21. The Commission considers this is a reasonable requirement and recommends that this is included in any conditions of approval. The Commission also notes that some of the other measures identified in the study should be further explored by the Proponent in ensuring it meets best practice standards.

18 NSW Health, Hunter New England Local Health District. 2013. Letter to the NSW Department of Planning and Infrastructure titled Port Waratah Coal Services Limited Response to Community Submissions – Terminal 4 project, dated 17 November 2013. 19 NSW EPA 2014. Correspondence to the PAC. Dated 10 October 2014 p 2 20 PAEHolmes. 2011. Potential Measures for Air Emissions from NSW Ports: Preliminary Study. Prepared for the NSW Office of Environment and Heritage, 23 June 2011. 21 PAEHolmes. 2011. Potential Measures for Air Emissions from NSW Ports: Preliminary Study. Prepared for the NSW Office of Environment and Heritage, 23 June 2011. P 17


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LocomotivesEmissions from diesel locomotive engines also represent a key contribution to the emissions from the project site. The Commission met with the NSW EPA to discuss rail emissions sources. In discussing this issue the EPA referred the Commission to its current work addressing air emissions from rail. Amongst these is the 2013 Locomotive Emissions Project: Scoping Study of Potential Measures to Reduce Emissions from New and In‐service Locomotives in NSW and Australia, which states:

“Diesel‐fuelled locomotives are an important contributor to anthropogenic fine particulate and oxides of nitrogen emissions (NOx). The World Health Organisation (WHO) has classified diesel engine exhaust as being carcinogenic to humans. It found that exposure to diesel exhaust is a cause of lung cancer and increases the risk of bladder cancer. In Australia, there are no air emission limits for new or re‐manufactured locomotives. Nor are there any substantive programs within Australia addressing air emissions from in‐service locomotives.”22

Further, in 2012 locomotives were estimated to contribute 4.7% to national emissions of PM2.5 and 4.2% to national emissions of NOx.23 The NSW EPA’s Position paper: Review of regulation of railway systems activities under the ‘Protection of the Environment Operations Act 1997 of August 2014 states that:

Current EPLs [Environment Protection Licences] specify that all plant and equipment used on licensed premises must be properly and efficiently operated. Additionally, EPLs include a general requirement for licensees to minimise dust from their premises. However, EPL conditions do not specifically address issues associated with air emissions from locomotives.24

The paper notes that under the current system only rail system operators have EPLs while rolling stock operators are not directly accountable to the EPA for their environmental performance. A number of submissions and speakers at the public hearing raised concerns about the impacts of coal trains, both at the site and travelling to and from the site. Particular concern was raised about the use of uncovered coal wagons. The Commission has considered the impacts of coal trains on the rail network in a later part of this section, see 4.3.2.2, Up and downstream transport of coal. In relation to emissions from diesel combustion in locomotives, the Commission supports the EPA’s current work to address this issue, which is said to include investigations into imposing diesel emission standards on new and existing locomotives operating in NSW. Adoption of such requirements would be consistent with measures already in place in the US and other OECD Nations. Ultimately, it appears that “Locomotives used for coal transfer to ports within NSW generally comprised newer locomotives and were identified for potential upgrade but not for accelerated replacement.”25 This apparent use of newer locomotives potentially provides greater options to ensure that emissions performance is controlled, idling is minimised and other shut down activities are able to be implemented during adverse conditions. The Proponent’s management of

22 ENVIRON. 2013. Locomotive Emissions Project: Scoping Study of Potential Measures to Reduce Emissions from New and In‐service Locomotives in NSW and Australia. P vii http://www.epa.nsw.gov.au/resources/air/locoemissrep.pdf accessed 6 November 2014 23 ENVIRON. 2013. Locomotive Emissions Project: Scoping Study of Potential Measures to Reduce Emissions from New and In‐service Locomotives in NSW and Australia. P ix 24 NSW EPA. 2014. Review of regulation of railway systems activities under the ‘Protection of the Environment Operations Act 1997, Position paper. August 2014 p 7 http://www.epa.nsw.gov.au/resources/epa/14657railpospap.pdf accessed 5 November 2014 25 ENVIRON. 2013. Locomotive Emissions Project: Scoping Study of Potential Measures to Reduce Emissions from New and In‐service Locomotives in NSW and Australia. Pxiii http://www.epa.nsw.gov.au/resources/air/locoemissrep.pdf accessed 12 November 2014


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locomotives on the site cannot be considered in isolation however. Management of locomotives would need to include consideration of both the onsite logistics of the coal handling operation, as well as the site’s integration with the broader rail freight network, the rail system operators and the rolling stock operators. Proactive,Real‐timeBestPracticeManagementMeasuresThe Department’s draft recommended conditions include requirements for an air quality management plan, to include pro‐active and reactive mitigation. The conditions do not specify which pro‐active and reactive mitigation measures would be implemented to manage dust (this is left to be determined in the plan). Correspondence from the EPA indicates that it “expects the emission control measures identified in the Statement of Commitments of the Preferred Project Report to be implemented should approval for the project be granted.”26 The Proponent’s Statement of Commitments proposes that the predictive and reactive real time management system would identify triggers for contingency dust management, such as additional use of water sprays27. The Commission notes that additional water spraying is not considered sufficient for modern mining operations, which are required to scale back and if necessary, temporarily shut down some operations during certain periods when air quality is already poor, and/or during adverse weather conditions. The Commission acknowledges that there are a number of differences between mining operations and this proposed coal terminal. Nonetheless, further consideration of measures to reduce emissions during adverse weather conditions should be provided to ensure health impacts are minimised. Given significant particulate emissions are produced from ships and locomotives on the site the Commission considers that some mechanism to manage these emissions would need to be found, for example with shut down of engines, or adjusting the scheduling of ship loading at the port when adverse conditions are predicted or occurring. The Commission acknowledges this would impose some constraints on the operation of the T4 coal project, but considers these and options for addressing them should be further explored. The Commission notes that emissions from ship engines and locomotives may be able to be reduced by the Proponent through options such as provision of shore power to ships, or having ships use low sulfur fuel; and by minimising idling of locomotives, for example by ensuring the machines to restart the older locomotives that do not have the capacity to be easily switched off and restarted are readily available on the site (or by phasing out acceptance of older locomotive engines). Further, the Commission considers there could be some opportunities for trade‐offs to be considered. For example there may be merit in arguing that some ships might be allowed to berth and load during some (but not necessarily all) adverse conditions, as long as additional controls ‐ of a greater net benefit were provided on one of the other sites in the Port (for example by covering or removing one of the other stockpiles or terminal sites). This type of offsetting of impacts should only be considered for emissions from T4 that are largely beyond the control of the Proponent, i.e. ship and locomotive emissions. Further, any compensatory works provided as offsets would need to be additional voluntary measures beyond any existing requirements of an EPA Pollution Reduction Program, or other pre‐existing requirements to provide reasonable and feasible mitigation. It would be up to the Proponent to determine whether there are any measures that might be available to it and then it would be necessary for the EPA to carefully review any proposal, to ensure that the offset measures proposed would provide a greater net benefit and could not have reasonably been required through existing licencing and management requirements.

26 NSW EPA 2014. Correspondence to the PAC. Dated 10 October 2014 p 2. 27 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013. Volume 1 Page 318


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The Commission heard from a number of speakers at the public hearing who were impacted by activities at, or directly associated with, the Carrington Coal Terminal, particularly in relation to noise, but also dust. The activities at Carrington are not relevant to this assessment, except in relation to the cumulative impacts. At present the Proponent’s modelling indicates that cumulative impacts will generally comply with the existing NSW air quality criteria. Nonetheless, the Commission must still consider whether the Project incorporates best available technological control and best practice management of emissions. The fact that the Carrington coal terminal is owned and operated by the Proponent provides a wider range of options to demonstrate best practice in minimising cumulative air quality and noise impacts across its various facilities. Some have called for an estuary wide model for managing impacts from industrial activities in the Port of Newcastle. This is consistent with the 2013 Draft Strategic Development Plan for the Port of Newcastle which proposed a whole of Port approach to managing issues such as air quality and noise28. As discussed in the next section on noise, the Department has also commenced work on a port wide approach to managing noise. The Commission supports the Government’s consideration of such an approach. A whole of Port management approach should be able to provide a more effective regulatory system with improved environmental performance outcomes for the community. Such a scheme would also provide a greater range of management options for Industry allowing it to identify and implement the most cost effective management and mitigation measures. This would ensure the most efficient management of impacts such as air emissions and noise while also optimising the development capacity of the Port. As the owner and operator of two of the port's existing coal handling facilities, PWCS (the Proponent) should be required to play a crucial role in devising and implementing such an air quality risk management strategy. By concentrating coal handling on Kooragang Island, at a greater distance from residential areas than other existing sources, T4 could provide greater flexibility in efforts to improve air quality in residential areas over time. The Commission is satisfied that T4 could be part of the solution, rather than simply adding to the problem. The Commission considers that with the proactive real time management and options to explore port wide improvements in place, it should be possible for the T4 terminal to operate without causing, significant additional exceedances of NSW’s Impact Assessment Criteria. Nonetheless, it will be important that the arrangements for pro‐active and reactive management are clarified prior to the project being referred to the decision maker for determination as the current deferral of this issue to a future management plan, does not provide sufficient certainty as to how the impacts can be managed acceptably.

4.3.2.2 UP AND DOWN STREAM IMPACTS

The Commission heard significant concerns from the community about the upstream impacts of mining the coal, noting that in addition to all the existing mining, and the extensions or replacement mines for each of these as the mine exhausts its resource, a number of large new mines would be needed to supply the 70 million tonnes of coal that would be transferred through terminal 4 annually.

28 Newcastle Port Corporation. 2013. Draft Strategic Development Plan for the Port of Newcastle P 42. http://pandora.nla.gov.au/pan/139583/20130403‐1108/newcastleportplan.com.au/document/show/9.pdf accessed 28 October 2014


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The Department has argued that the upstream and downstream impacts are outside the control of the Proponent and “the assessment, management and regulation of these impacts are appropriately covered by other mechanisms”29.

CumulativeimpactsofadditionalminingIn relation to the upstream impacts of mining the coal, the Commission agrees with the Department’s position and is satisfied that the impacts of each mine would need to be assessed on its merits prior to gaining any approval to extract coal. As the coal could be extracted using either underground or open cut methods and could be sourced from a wide variety of possible locations potentially as far afield as the Warrumbungle LGA the Commission is not in a position to consider the potential cumulative impacts of the additional mining operations that may be developed to supply this proposed coal terminal. As is currently the case, each new coal mine would need to be assessed against the existing environment around the site and the cumulative impacts that might be produced by other activities in the area.

ImpactsofcoalatthereceivingportanditsenduseLikewise the downstream impacts of transporting the coal to, and using the coal at, the receiving power station, steelworks or other use is not able to be accurately considered by the Commission. This is because, the coal could be sent to a wide range of possible locations with varying emissions control measures and infrastructure in place. Ultimately noise, dust and other local emissions impacts produced from the use of the coal would need to be considered by the receiving port and user. Given the large variety of coal sources available to any individual end user, the Commission is satisfied that the impact at the receiving location cannot be attributed to this port, as the coal would likely be sourced from another port, if it was not available through the Port of Newcastle.

GreenhouseGasEmissionsThe Commission heard considerable concern about the carbon dioxide (CO2) emissions and climate change impacts associated with the downstream use of the coal. The Commission acknowledges that it is reasonable to expect that the coal exported would be consumed and would produce carbon emissions with global climate change ramifications. The Commission has considered this issue of the downstream production of Greenhouse Gas emissions separately, in section 4.6.1.

UpanddownstreamtransportofcoalThe Department has also argued that the transport of coal to and from the coal terminal site are

upstream and downstream impacts which cannot be controlled by the Proponent. The Department

notes that impacts from rail transport is the responsibility of the ARTC and the rail freight operators,

regulated by an Environmental Protection Licence administered by the Environment Protection

Authority (EPA). The Department also suggests that the Proponent “does not have control or

responsibility over the ships at port nor the combustion of the coal at its final destination”30.

The Commission accepts that other mechanisms may be available to control the impacts of use of the rail corridor; however it is clear from presentations and submissions made, and from the Commission’s discussions with representatives from the NSW EPA that there is room for improvement in managing air quality impacts associated with rail transport of coal. Likewise, as discussed above, shipping is also a major source of pollution and work undertaken for the EPA

29 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. p 21 30 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. p 21


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suggests31 there is scope for reducing emissions from ships berthed at port and travelling to and from port. AirEmissionsfromTrainsThe Commission heard significant concern about the air emission impacts associated with coal trains transporting coal from the mines to the port, including concerns about the cumulative impacts from the additional 70 million tonnes of coal that would be transported to terminal 4, on top of the coal already delivered to the existing coal terminals at the port. The community raised particular concern about the particulate emissions that may be produced from uncovered coal wagons and cited monitoring data that has shown increased particulate levels as trains pass. The Commission has considered the air emissions from coal trains and discussed this with both the NSW EPA and NSW Health. NSW Health particularly emphasised that the health effects of the smaller PM2.5 fraction of the particulates are the most clearly evident and of most concern, because the PM2.5 fraction readily disperses, so impacts from these emissions would not just impact on those close to the rail corridor, but also the wider region. The Commission notes that given the ready dispersion of PM2.5, this impact would be included in the monitoring data from existing air quality monitors. The best information available to the Commission at this time is that the most significant sources of particulate emissions from coal trains are from the diesel locomotives and the undercarriage of recently unloaded wagons, rather than the uncovered tops of wagons. There is little or no evidence that uncovered wagons contribute significantly to particulate air quality in the Newcastle area and there is no justification for recommending that wagons be covered. To the extent to which emissions from loaded wagons are identified as a problem, requirements to profile loads, maintain moisture levels and/or apply veneers to suppress dust appear to represent more viable, cost effective alternative controls. The Commission considers that coal should only be accepted at the project site where it has been appropriately profiled within the wagon and where the coal at the top of the wagon (i.e. that which could be exposed to the wind) meets suitable moisture content levels, or has been treated with an effective chemical veneer (the Commission understands that a number of different products have been used).

The EPA has proposed that any approval should include a condition: “The Proponent must design and construct the rail unloading facility to enable the installation and operation of equipment to remove any and all residual coal from empty wagons prior to the locomotives leaving the premises.” The Commission agrees that cleaning of wagons after unloading, to ensure significant quantities of coal are not left on the wagons to become a further source of dust, is also important. In this regard the Commission understands a wagon surveillance and shaking device is installed at the Port Kembla Coal Loader. It will be up to the Proponent to determine the type of system to be used, but the Commission recommends that the conditions require wagons to be empty, closed and sufficiently clean to ensure there is no visible evidence of coal deposition on the ballast around the rail tracks from trains leaving the site.

31 PAEHolmes. 2011. Potential Measures for Air Emissions from NSW Ports: Preliminary Study. Prepared for the NSW Office of Environment and Heritage, 23 June 2011.


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These recommendations relating to conditions for the receival of coal wagons on site and the cleaning of coal wagons prior to leaving the site should assist in reducing particulate emissions and deposition associated with the coal wagons on the wider rail network. The Commission notes the EPA’s advice that the current system for regulating rail operators is limited and impacts from associated locomotives, which produce particulate emissions associated with the combustion of diesel, are significant. The EPA Position Paper states: “the current approach to licencing does not make rolling stock operators directly responsible for the environmental performance of rolling stock. This fact has inhibited the EPA from adequately addressing noise and air emissions in the NSW operational rail sector. This regulatory challenge needs to be addressed as a matter of priority.32 The paper goes on to note that “as part of its Non‐road Diesel Strategy, the EPA is currently investigating imposing diesel emission standards on new and existing locomotive operating in NSW.”33 The presentations the Commission heard at the Public Hearing attest to the need for this issue to be addressed. Ultimately this is not a matter for the Commission as it cannot be reasonably controlled in this application, however the Commission notes that concerns about regulation of impacts in rail corridors were raised at the public hearing and it supports the Government’s efforts to introduce regulation of locomotives and rolling stock operators.

4.3.3 CONCLUSION AND RECOMMENDATIONS

Given that there are already occasional exceedances of air quality standards in the Newcastle area, it could be argued that any potential additional emission, no matter how small, should be disallowed. This approach would however go against a common sense approach of targeting the most cost effective means of achieving net air quality improvements. The Commission is satisfied that even allowing for some uncertainties around modelling assumptions, the net contribution to particulate emissions in the Newcastle area from a fully operational T4 would be modest. EPA efforts to improve particulate air quality in residential areas such as inner Newcastle are focussed on reducing emissions from diesel locomotives and ships in the port. It is clear to the Commission that an integrated 'whole of port' approach needs to be taken to provide the framework for implementation of adaptive operational strategies across all emission sources when adverse weather conditions indicate an elevated risk of a deterioration in air quality. As the owner and operator of two of the port's existing coal handling facilities, PWCS should be required to play a crucial role in devising and implementing such an air quality risk management strategy. By concentrating coal handling on Kooragang Island, at a greater distance from residential areas than other existing sources, T4 could provide greater flexibility in efforts to improve air quality in residential areas over time. The Commission is satisfied that T4 could be part of the solution, rather than simply adding to the problem. Pro‐activeandReactiveManagementThe Commission supports the Department’s proposed requirements for pro‐active and reactive management of air quality and recommends that consideration be given to strengthening the Department’s conditions requiring pro‐active and reactive mitigation and management. In particular

32 NSW EPA. 2014. Review of regulation of railway systems activities under the ‘Protection of the Environment Operations Act 1997, Position paper. August 2014 Executive Summary (unnumbered page) 33 NSW EPA. 2014. Review of regulation of railway systems activities under the ‘Protection of the Environment Operations Act 1997, Position paper. August 2014 p 14.


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it would be necessary to confirm what mitigation measures would be applied, which operational components could be modified or scaled down and provide clear justification for any continued emissions during adverse conditions. This would also need to extend to the management of emissions from ships and locomotives that are associated with the project to the extent to which it is within the control of the Proponent. ShorePowerThe Commission recommends that the Proponent be required to make spatial provision for shore power for vessels, so that it could be installed on the site in future, in the event this becomes a viable option. MinimisingemissionsfromcoalwagonsThe Commission recommends any approval should include conditions that ensure coal should only be accepted at the project site where it has been appropriately profiled within the wagon and where the coal at the top of the wagon (i.e. that exposed to the wind) meets appropriate moisture content levels, or has been treated with an effective chemical veneer. CleaningofcoalwagonsThe Commission recommends any approval should include conditions that require wagons leaving the site to be completely empty, with dump doors fully closed and sufficiently clean to ensure there is no visible evidence of coal deposition on the ballast around the rail tracks from trains leaving the site.

4.4 NOISE The Commission’s terms of reference for this Review require it to assess and pay particular attention to the potential noise impacts of the project. The proposed T4 coal terminal will produce noise from a range of sources across the site, however the closest residential receivers are over a kilometre away and other industrial land or premises sit between residential areas and most parts of the site. Nonetheless the Proponent’s assessment considers receptor locations at Fern Bay, Stockton, Carrington, Mayfield, Warabrook and Sandgate. Because the site is relatively distant to these residential areas the noise contribution from the project is predicted to be relatively small and largely imperceptible during most conditions. The exceptions are Warabrook, Mayfield and Mayfield West where noise levels from the T4 project are expected to reach 36, 39 and 40 dBA respectively. These predicted levels are still likely to often be imperceptible against background noise levels from the general Kooragang Island industrial area. The Commission notes that the Proponent’s monitoring reports suggest that road and rail traffic noise generally characterise the existing background noise levels in these, but that there are sometimes very quiet periods at night34, with background levels recorded below 32 dBA LAeq (15 minute) during one period of attended monitoring in Mayfield West in 201335. Consequently noise from T4 would be noticeable at certain times. Noise is commonly assessed against the existing background noise levels, and impacts that are less than 5 decibels above the background levels are considered acceptable. This situation becomes more complicated when there are multiple sites and operations contributing noise, which combine to produce a cumulative noise impact. In cases where there are a number of sources contributing to noise, amenity criteria are also applied to protect the overall amenity of the location and noise from all sources should remain below the amenity criteria for a location.

34 PWCS/EMM. 2012 T4 Project, Environmental Assessment. February 2012. Appendix L 35 PWCS. 2014. KCT Annual Noise Investigation Report (2014).


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There are already two coal terminals on Kooragang Island (as well as other industrial sources) and the residential areas that could be impacted by the T4 project are likely already receiving some noise from these other industrial sources. This makes it particularly difficult to establish appropriate noise criteria and, as acknowledged in the Department’s preliminary assessment, it also makes monitoring of compliance against those criteria highly challenging, if not impossible. This is because it would be very difficult to identify, distinguish and separate the noise coming from the T4 terminal operations, from other noise coming from industry on Kooragang Island. The Proponent also operates the Kooragang Coal Terminal, and because of this, it has assessed the combined impact of operations from both the existing KCT and proposed T4 terminals. This assessment found the two operations would be able to meet the existing criteria that apply to the Kooragang Coal Terminal (see Table 12)– that is, no increase in noise would need to be allowed. In fact, the predicted noise levels from the two operations (see Table 13) would be slightly less than the maximum allowable noise contribution limit that applies to the Kooragang Coal Terminal. The exception is the Warabrook and Sandgate area, which is not currently listed as a noise affected location in the KCT and NCIG Terminal approvals. Warabrook and Sandgate might receive some small, but perceptible, noise impact as a result of the combined operations. Table 12 ‐ Maximum allowable noise contribution (dBA) under the planning approval for the Kooragang Coal Terminal 36

Location Day, Evening, NightAt all times

Night10:00pm to 7:00am Monday to Sunday 10:00pm to 8:00 am Sundays and Public Holidays

LAeq(15 minutes) LAeq(night) LA1(1 minute)

Fern Bay North 46 43 55

Fern Bay West 50 47 55

Fern Bay East 49 46 55

Stockton West 50 47 57

Stockton East 49 46 56

Mayfield West 41 37 56

Mayfield 44 38 58

Carrington 42 38 52

Table 13 – Proponent’s predictions (dBA) of the combined intrusive impact from T4 and the existing Kooragang Coal Terminal37

Receiver Area

Day time Evening Night

LAeq(15 minute) LAeq(15 minute) LAeq(15 minute) LA1(1 minute)

Predicted Criteria Predicted Criteria Predicted Criteria Predicted Criteria

Fern Bay North

36 45 40 45 46 45 52 55

Fern Bay West

40 45 46 45 49 45 55 55

Fern Bay East

39 45 45 45 49 45 55 56

Stockton West

38 45 49 45 49 45 55 57

Stockton 38 45 48 45 49 45 55 57

36NSW Department of Planning and Infrastructure. 2012. Project Approval, Kooragang Coal Terminal Mod 3. https://majorprojects.affinitylive.com/public/d5ca8de27579d43ce753fabb7f9bd2d3/Consolidated%20Approval%20(MODS%201,%202%20&%203)_Nov%202012.pdf 37 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013., App N app F1 and F2


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Receiver Area

Day time Evening Night

LAeq(15 minute) LAeq(15 minute) LAeq(15 minute) LA1(1 minute)

Predicted Criteria Predicted Criteria Predicted Criteria Predicted Criteria

East

Mayfield West

34 50 43 50 41 46 47 56

Mayfield 34 51 43 51 41 48 48 58

Carrington 31 47 41 46 39 42 45 52

Maryville 32 53 27 52 37 50 43 60

Warabrook 29 50 37 48 35 44 41 54

Sandgate 29 53 37 50 36 45 42 55

The Department has recommended that noise levels consistent with those that apply to the Kooragang Coal Terminal should be included in conditions for the T4 project, but with the added requirement that the noise generated by T4, in concert with noise generated by the KCT do not exceed the criteria listed (see Table 14). The Commission has carefully considered this approach, including the following questions:

1. Do the locations listed in the KCT approval cover all the locations potentially impacted by the

T4 project?

2. Are the levels appropriate?

3. Is the condition valid and enforceable?

4. Are the conditions suitable and is there a better alternative?

Table 14 Department's recommended Maximum allowable noise contribution (dB(A)) from the combined operations of T4 and the Kooragang Coal Terminal

Location At all times Night Only

LAeq(15 minute) LA1(1 minute)

Fern Bay 50 55

Stockton 50 57

Mayfield 44 58

As noted above, the KCT and NCIG Terminal approvals do not include noise criteria for Warabrook and Sandgate. This is understandable as Warabrook is approximately 3 km from the existing terminal sites and residential areas in Mayfield West sit between the terminals and Warabrook (Sandgate is even further away). The T4 proposal would be built west of the existing terminals however, closer to Warabrook and Sandgate. The Proponent has assessed the noise impact in these suburbs and predicts a relatively small noise contribution, but one that may nonetheless be perceptible at certain times. The EPA’s recommended noise criteria (Table 15) include a noise limit for both suburbs and the Commission considers a noise limit for Warabrook and Sandgate should be included in any conditions of approval. Table 15 ‐ EPA Recommended Noise Limits (dBA) and Localities38

Locality Day Evening Night

LAeq(15 minute) LAeq(15 minute) LAeq(15 minute) LAeq(9 hours) LA1(1 minute)

Fern Bay and Stockton

49 49 49 46 55

Mayfield West 43 43 41 38 47

Mayfield and Mayfield East

43 43 42 38 48

Carrington 41 41 39 35 45

38 NSW EPA. 2014. Letter to PAC dated 25 August 2014


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Locality Day Evening Night

LAeq(15 minute) LAeq(15 minute) LAeq(15 minute) LAeq(9 hours) LA1(1 minute)

Sandgate 37 37 36 35 45

Warabrook 37 37 35 35 45

With regard to the noise limit levels adopted, the Commission notes that the Department’s recommended condition adopts the same noise levels that are included in the Kooragang Coal Terminal approval condition 2.8. However it is apparent that these are not the preferred noise levels as the approval for the Kooragang Coal Terminal, also includes a condition (2.10) requiring the Proponent to investigate and, if reasonable and feasible, reduce noise impacts from the project to achieve noise contributions of no greater than 43 dB(A) LAeq(night) and 45 dB(A) LAeq(15 minute) at Fern Bay and Stockton. The draft conditions for T4 do not include this requirement to try and achieve this tighter limit, but do include a more general requirement to minimise noise emissions from plant and equipment operated on the site. The EPA has recommended tighter noise limits, consistent with the Proponent’s predicted noise impacts from the combined operations of the Kooragang Coal Terminal and the T4 Terminal. The PEAR has not provided justification for proposing more relaxed noise limits. The Commission agrees that the tighter, predicted noise levels would be a more appropriate noise limit, than the ones currently included in the draft conditions. However, the Commission notes that if the limits are to apply to the combined operations of the two terminals it would not be possible for limits in this approval to be tighter than the ones in the existing Kooragang Coal Terminal Approval. While the Commission agrees with the principle of adopting noise criteria that would apply to the combined operations, the Commission has a number of reservations about how this could be applied in practice. Firstly, the Commission notes that in 2013 the Land and Environment Court raised concerns about the validity of conditions that apply to two planning approvals stating:

371 The difficulty with accepting the combined criteria is that compliance with two different consents for two different mines is assumed; and while it may be accepted that in practice the two mines are operated as a single entity, the legal separation remains. There is no evidence before the Court as to any contractual or other arrangements between the two mines. No condition has been put forward that would specify what is the noise limit for the Warkworth mine operations alone.

… If noise is emitted from Warkworth transferring overburden onto Mount Thorley land which takes up most of the 42 dB(A) allowed for the combined operation, then that would impact on Mount Thorley's ability to continue operations. That would be beyond the reach of any approval granted to Warkworth for its operations.

373 … any conditions imposed on a project approval must relate to that project, and be capable of implementation by whomever is carrying out the activities authorised by the approval: Hub Action Group Inc v Minister for Planning & Orange City Council [2008] NSWLEC 116; (2008) 161 LGERA 136 at [118]. A condition imposed on an approval granted in these proceedings could not purport to impose obligations on the operator of a separate mine that is subject to its own consent.39

The Commission acknowledges that the specifics of that case are very different to this proposal. Nonetheless, the condition would effectively require the operations at T4 to be scaled back to reduce noise, in the event that the KCT operations were contributing noise up to the allowable limit, the Commission has some concerns this may not provide the Proponent with sufficient certainty regarding its ability to operate. While this is unlikely to be a problem while the Proponent continues

39 Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48.


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to operate both sites, the conditions do not provide for any contingency – for example, in the event that one of the operations came under different management control. The Commission considers that some further explanation of this proposed condition (B13) would need to be provided to the decision maker before such a condition could be imposed. Ideally, the noise levels should also be reduced, to those that are predicted to be achieved (as recommended by the EPA).There is also merit in considering inclusion of an additional set of noise limits that would apply to T4 in the event that the two operations were managed separately, or the KCT facility was closed at any time in the future. Ultimately the Commission is satisfied the proposal is relatively distant from sensitive noise receivers and that the noise emissions from the project would be acceptable. Nonetheless, some further consideration or clarification on the wording of conditions to limit noise from the site is needed to ensure noise can be adequately regulated. The Commission recommends:

1. that noise limits should be included for locations at Warabrook and Sandgate (as

recommended by the EPA);

2. that options to tighten the noise limits that would apply to T4 in concert with the Kooragang

Coal Terminal should be further explored; and

3. that additional noise limits specific to the T4 operations should be considered.

The Commission notes that the Department’s preliminary assessment also considers the construction noise, rail noise and broader cumulative port noise issues. In relation to construction, the Commission is satisfied the draft conditions require construction noise to be managed in accordance with the Interim Construction Noise Guideline, but recommends:

4. that where the conditions specify that issues shall be managed in accordance with the

relevant guidelines, the condition specifies that the latest version of the policy or guideline

would apply.

With regard to rail noise, the Commission agrees with the Department’s position, that “it would be unreasonable to hold the project responsible for all rail noise impacts on the rail network”40. The Commission also notes that the concerns about rail noise raised at the public hearing largely related to activities at or associated with the Carrington Coal Terminal, which are outside the scope of this review. Nonetheless the development of the T4 proposal may provide some scope for the Proponent to rationalise operations in the future across its three sites, which could potentially improve the situation at Carrington. The EPA’s recent Review of regulation of ‘railway systems activities’ under the Protection of the Environment Operations Act 1997 proposes a number of improvements to the regulation of impacts in rail corridors. The concerns raised at the public hearing and in submissions, and the Commission’s own consideration of this application all corroborate the need for improved regulation of activities in the rail corridor and the Commission supports the EPA’s work on this issue. In relation to cumulative impacts, the Department notes the difficulties in regulating noise under the current system of case by case assessments. The Department’s assessment considers the possibility of adopting a whole of port approach to managing noise across the greater Newcastle Port. The Commission agrees that regulation under the current system is difficult; this was also highlighted by a number of speakers at the public hearing. The Commission considers the proposed “whole of port”

40 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report, June 2014. P 22


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approach suggested by the Department has considerable merit and supports the Department’s efforts to progress this option.

4.5 TRAFFIC

The Terms of Reference specifically require the Commission to consider the traffic impacts of the proposed development. While this was not one of the key concerns raised at the Public Hearing and in the submissions, traffic congestion around Kooragang Island was mentioned several times. A traffic assessment was prepared by EMM as part of the EA and was updated for the PPR. It is noted that the intersections assessed as part of the PPR are generally the same for those assessed as part of the EA, however the Industrial Drive / Woodstock Street intersection and the Tourle Street / OneSteel access intersection are not required for the revised project access. Therefore, they have not been considered in the revised traffic assessment. The Secretary’s PEAR recognises that traffic congestion currently occurs in the vicinity of the site in the morning and afternoon peak hour periods. It is expected that the proposal would have some impact on traffic in the vicinity of the site during construction and operation of the proposed coal terminal, but that these impacts will be reasonable. This is discussed below: 4.5.1 Construction traffic Daily and peak‐hourly traffic generation predictions were calculated and assessed by EMM for the predicted peak of construction. It is predicted that the maximum number of construction workforce travelling by car to and from construction worksites on Kooragang Island each weekday will not exceed 1,200 people. The rationale for this is that at the time of the traffic counts (2011) there was a combined construction workforce of 1,200 for KCT and NCIG. While natural traffic growth is expected over time (whether or not the proposal proceeds), construction at KCT and NCIG is likely to be complete before peak construction of the fourth coal terminal is reached. The Commission therefore accepts that this maximum figure is reasonable. The proposed construction workforce car parking areas will provide approximately 980 car parking spaces41, which EMM considers adequate for the proposed peak project construction workforce. This assumes a reasonable level of car sharing (an average vehicle occupancy of 1.2 persons per vehicle) for workers travelling to and from the site by car or other private vehicles.

4.5.2 Operational traffic Once construction is complete, 80 additional PWCS employees are proposed to operate the project (however PWCS has advised that if the latest automation technology is implemented, there will be no additional operational positions created for the new coal terminal). The Department considers that the additional traffic associated with 80 operation employees is not significant, as they would generally work 12 hour shifts with approximately 20 people per shift. The Commission accepts that this is within the capacity of the road network, subject to the mitigation measures outlined below.

4.5.3 Mitigation measures To limit the traffic impacts of the proposal, PWCS has committed to the following:

Upgrade of the existing Cormorant Road and Pacific National Road T‐intersection;

41 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013. p.212


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Upgrade of the Cormorant Road and NCIG Wharf Access Road T‐intersection;

Accessing the site via a left turn into the Delta EMO Access Road from the Tourle Street bridge direction, but generally exit the work site via the new traffic signals at the Pacific National Access Road. Where possible, this access will be limited to light vehicles only.

Provide a shuttle bus when the construction workforce exceeds 1,200 persons, to transport the additional employees between the project site and off‐site parking location(s)/pick up point(s) away from Kooragang Island.

Stagger traffic departures during the peak period of 4pm to 5pm.

Adopting construction practices which minimise truck movements, such as the transport of dredged material onto the site via pipes.

The commitments outlined above are supported by the Commission and should assist in mitigating traffic congestion in the vicinity of the site. The Commission also agrees with the Department’s recommendation that a condition be applied to any future approval, requiring development of a shuttle bus route as part of the Construction Traffic Management Sub Plan in consultation with RMS and Council. The Construction Traffic Management Plan should also detail the proposed management of vehicles leaving the site. The Commission agrees with the Department that signalising the Cormorant and Pacific National Access Road and the NCIG Wharf Access Road intersections would improve their operation, and should be functioning prior to the time when the peak construction workforce is required. The Secretary’s PEAR notes the RMS’s plan for the upgrade of Tourle Street and duplication of Cormorant Road. On 10 October 2014 the NSW Minister for Roads and Freight, Duncan Gay, announced that the detailed design of the upgrade was expected to be complete by mid‐2015. If the proposal is approved, the Commission encourages PWCS to consult with RMS in order to manage cumulative construction impacts.

4.5.4 Conclusion The Commission agrees with the Department that while construction traffic may add to baseline traffic congestion in the vicinity of the project site, short‐term impacts similar to those experienced during the expansion of the KCT and NCIG projects should be expected and are reasonable. These impacts need to be appropriately managed by the implementation of the proposed mitigation measures and statements of commitment, in consultation with RMS and Newcastle City Council.

4.6 OTHER CONSIDERATIONS

4.6.1 GREENHOUSE GAS EMISSIONS

Although only briefly mentioned in the Assessment Report and not specifically listed as an issue in the Terms of Reference for the Review, the Commission heard numerous speakers and received a number of submissions raising concerns about the Greenhouse Gas Emissions particularly from the downstream use of the coal to be exported from the project site. Submissions cited a range of local and international sources highlighting the need to reduce greenhouse gas emissions and indicating “The World Bank, the OECD and the International Monetary Fund advise that coal must be left in the ground”42. Some speakers cited predictions that coal demand had already peaked; others suggested there would be strong growth noting “The Australian Government Bureau of Resources and Energy Economics notes that Japan has reaffirmed coal as a source of energy, and are building new, high

42 Rose, J. 2014. Submission to PAC. P2


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efficiency, generators. The Bureau also notes continued demand from China who is simultaneously increasing the use of renewable energy and building new coal generators.”43 Both the Proponent and the Department have considered the Scope 1, 2 and 3 greenhouse gas emissions associated with the project. In relation to the Scope 1 and 2 emissions from the site the Department notes that:

“Annual Scope 1 and 2 emissions would contribute approximately 0.0002 per cent to current global, 0.01 per cent to national and 0.05 per cent to NSW C02‐e emissions or 0.0001 per cent, 0.01 per cent or 0.04 per cent respectively to 2030 mid‐range projected emissions. The Proponent has committed to a range of strategies to minimise or optimise energy use during construction and operation such as selecting energy efficient equipment and lighting and optimising feed rates, investigating low GHG emission fuel for the project's fleet and establishing a reduction target and monitoring plan.

To strengthen this commitment, a condition is recommended which requires preparation of an Energy Efficiency Plan confirming the measures to be implemented to minimise the energy use and greenhouse emissions attributable to the project and to explore the opportunities to use renewable energy sources.”44

The Commission notes that the current policy on Greenhouse Gas Emissions in Australia is a Direct Action Plan and an Emissions Reductions Fund to “provide incentives for emissions reductions activities across the Australian economy”45. The Commission is satisfied the Department’s proposed requirement for an Energy Efficiency Plan accords with this policy, which ultimately sets out “to reduce Australia’s greenhouse gas emissions and deliver improvements to our environment”46. In relation to the Scope 3 emissions from the project (from the downstream use of the coal) the Department’s PEAR states:

“The Department acknowledges and does not question the potential greenhouse gas impacts caused by the burning of coal. Notwithstanding, it must also be acknowledged that the project in itself does not drive demand for the mining or burning of coal. Instead, the Proposal facilitates the link between the producer (the mine) and the consumer. Not proceeding with the development would not result in a decrease in demand for coal products (or C02 emissions), which is driven by current and projected future global demand for energy.

The Proponent argues that Scope 3 emissions have been provided for completeness, however as it cannot control these emissions, these should not be counted towards the impacts of the project. The Department accepts that Scope 3 emissions are beyond the control of the Proponent and are accounted for by others/other developments (as either Scope 1 or 2 emissions). Further, the worldwide demand for coal, whilst subdued in recent years, is not likely to diminish to any great extent in the near future. Therefore, the Scope 3 emissions from the export of 70 Mtpa of coal would still be realised even if the proposal did not proceed as coal to satisfy global energy demand would be sought from alternative sources and consumed.”47

43 Port of Newcastle. 2014. Submission to PAC, part 2. p2 44 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. P 69 45 Department of Environment Website. 2014. http://www.environment.gov.au/climate‐change/emissions‐reduction‐fund accessed 6 November 2014 46 Department of Environment. 2014 http://www.climatechange.gov.au/reducing‐carbon/reducing‐australias‐emissions accessed 6 November 2014. 47 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. P 23


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Many submissions and speakers at the public hearing disagreed with the position adopted by the Department, indicating the project should be refused due to concerns about the downstream burning of the coal proposed to be exported through this proposed T4 Coal Terminal and the resulting contribution to climate change. The Commission has considered the Proponent’s assessment of the Greenhouse Gas Emissions that would be produced, along with the Department’s position that the Scope 3 emissions are beyond the control of the Proponent. The Proponent estimates that Scope 3 emissions would be equivalent to 174,210,870 tonnes of CO2 a year, comprising 275,870 tonnes of CO2‐e for transport of the coal to the port; 1, 911,000 for shipment of the coal from the port to the end user; 130,527,000 tonnes for the end user combustion of thermal/steaming coal; and 41,497,000 tonnes for the end user combustion of coking coal. The Proponent estimates this would represent 0.36% of current annual global emissions48. The Commission acknowledges the significant contribution this represents, noting that it is greater than that currently produced by NSW (which is believed to be approximately 154.7 million tonnes CO2‐e a year

49). The Commission heard a number of strong and compelling arguments for reducing greenhouse gas emissions and these arguments were then extended to suggest that they constituted grounds for

this project to be refused. During the public hearing the Commission was advised that “In February this year US Secretary of State John Kerry called climate change "the world's most fearsome weapon of mass destruction"50. Since then, at the United Nations’ recent 2014 Climate Summit Secretary General Ban Ki‐moon declared climate change the “defining issue of our time”51. The need to reduce global greenhouse gas emissions is acknowledged by the Commission. Presentations pointed out that “at the international climate change negotiations in 2009, countries party to the UNFCCC (including Australia) affirmed that holding any temperature increases to below 2 degrees Celsius above preindustrial levels is needed to prevent dangerous climate change” and suggested that “if the world were to meet a 2 degree target‐ T4 would contribute 17.4% of the

allowable increase in emissions”52. The Commission notes that a range of different emissions

reductions scenarios have been modelled, including some that allow for increases in emissions for the short term. Nonetheless, the United Nations states that “Scenarios show that in order to have a likely chance of limiting the increase in global mean temperature to two degrees Celsius, global greenhouse gas emissions would have to be lowered by 40 to 70 per cent compared with 2010 by mid‐century, and to near ‐zero by the end of this century. Ambitious mitigation may even require removing carbon dioxide from the atmosphere.” 53 Policy on achieving the necessary reductions in greenhouse gas emissions continues to evolve both locally and internationally. In the time since this project was originally proposed many factors have changed, and are likely to change again before any coal could be exported from the site. The application process for this project commenced at the height of the coal mining boom and at a time

48 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013.Appendix P p 9 49 NSW Office of Environment and Heritage. 2014. Emissions Overview 2011/12. http://www.environment.nsw.gov.au/climatechange/emissionsoverview.htm accessed 21 October 2014 50 Rose, J. 2014. Submission to PAC. P2 51 United Nations Website http://www.un.org/climatechange/summit/2014/09/ban‐seeks‐vision‐concrete‐action‐world‐leaders‐un‐climate‐summit/ accessed 20 October 2014 52 Dean, A. 2014. Submission to PAC. p3. 53 United Nations Website http://www.un.org/climatechange/science-and-solutions/ accessed 20 October 2014


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when the coal price had reached unprecedented highs. In the intervening period climate change policy has varied widely. In Australia an Emissions Trading Scheme was proposed and then subsequently shelved; and a Carbon Tax was introduced and subsequently repealed. Meanwhile internationally policies on climate change have also gradually been evolving. During the recent 2014 United Nations Climate Summit “Seventy‐three national Governments, 11 regional governments and more than 1,000 businesses and investors signalled their support for pricing carbon. Together these leaders represent 52 per cent of global GDP, 54 per cent of global greenhouse gas emissions and almost half of the world’s population”54. Notably, China has recently made a number of announcements about its intentions to limit coal consumption and imports at a regional and national level respectively. One submission reported that Professor Ross Garnaut indicated “that projected Chinese use of coal for power production would fall on average by 0.1 per cent a year between 2014 and 2020. ‘After the growth of 11 per cent per annum in coal use in power generation in the first 11 years of the century, this is a turnaround of historic dimension and global importance,’ he said.”55 The Commission acknowledges that in a joint statement with the United States, China has now announced “targets to peak CO2 emissions around 2030, with the intention to try to peak early, and to increase the non‐fossil fuel share of all energy to around 20 percent by 2030”56. Nonetheless, other submissions indicated “Thermal coal exported through Newcastle is of a high quality, and continues to be the preference for the premium power generation markets where importance is placed on quality, efficiency and reduced emissions”57. Further, alternatives to coal are not necessarily readily available, economical or accepted. For example it has been reported that Germany has increased its consumption of coal in recent years, and this has variously been attributed to its phasing out of nuclear power generators (after the Fukushima reactor accident in 2011)58 or to the reduction in electricity production from gas burning, along with increased electricity exports 59. Also, at a local level, strategic planning for the region supports the growth of the coal mining and export sector for NSW and the Port of Newcastle (see the next section 4.6.2). While there has been a recent downturn in coal prices and associated scaling back of production at many mines in NSW, a number of submissions cited various reports from the International Energy Agency. It’s World Energy Outlook for 2013 suggests that:

“Coal remains a cheaper option than gas for generating electricity in many regions, but policy interventions to improve efficiency, curtail local air pollution and mitigate climate change will be critical in determining its longer‐term prospects. Policy choices in China, which has outlined plans to cap the share of coal in total energy use, will be particularly important as China now uses as much coal as the rest of the world combined. In our central scenario, global coal demand increases by 17% to 2035, with two‐thirds of the increase occurring by 2020. Coal use declines in OECD countries. By contrast, coal demand expands by one‐third in non‐OECD countries – predominantly in India, China and Southeast Asia – despite China reaching a plateau around

54 United Nations Website http://www.un.org/climatechange/summit/2014/09/2014‐climate‐change‐summary‐chairs‐summary/ accessed 20 October 2014 55 Doyle, T. 2014. Submission to PAC. p1 56 The White House. 2014. FACT SHEET: U.S.‐China Joint Announcement on Climate Change and Clean Energy Cooperation. http://www.whitehouse.gov/the‐press‐office/2014/11/11/fact‐sheet‐us‐china‐joint‐announcement‐climate‐change‐and‐clean‐energy‐c accessed 13 November 2014 57 Port of Newcastle. 2014. Submission to PAC, part 2. P2. 58 U.S. Energy Information Administration website http://www.eia.gov/countries/country‐data.cfm?fips=gm accessed 20 October 2014 59 The Guardian, 22 July 2014, Germany, UK and Poland top ‘dirty 30’ list of EU coal‐fired power stations, http://www.theguardian.com/environment/2014/jul/22/germany‐uk‐poland‐top‐dirty‐30‐list‐eu‐coal‐fired‐power‐stations accessed 20 October 2014


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2025. India, Indonesia and China account for 90% of the growth in coal production. Export demand makes Australia the only OECD country to register substantial growth in output”60.

The recently released World Energy Outlook 2014 updates these figures but still predicts growth in demand, indicating:

“While coal is abundant and its supply secure, its future use is constrained by measures to tackle pollution and reduce CO2 emissions. Global coal demand grows by 15% to 2040, but almost two‐thirds of the increase occurs over the next ten years… Current low coal prices have put pressure on producers worldwide to cut costs, but the shedding of high‐cost capacity and demand growth are expected to support an increase in price sufficient to attract new investment. China, India, Indonesia and Australia alone account for over 70% of global coal output by 2040.”61

The 2014 Outlook continues to caution that this action will not be sufficient, and calls for urgent action, indicating that:

“[its central scenario predictions put] the world on a path consistent with a long‐term global average temperature increase of 3.6 °C. The Intergovernmental Panel on Climate Change estimates that in order to limit this temperature increase to 2 °C – the internationally agreed goal to avert the most severe and widespread implications of climate change – the world cannot emit more than around 1 000 gigatonnes of CO2 from 2014 onwards. This entire budget will be used up by 2040 in our central scenario. Since emissions are not going to drop suddenly to zero once this point is reached, it is clear that the 2 °C objective requires urgent action to steer the energy system on to a safer path.”62

While the 141 nations, signatory to the 2009 Copenhagen Accord agreed that emissions needed to be reduced so that global temperature increases are limited to below 2 degrees Celsius, some nations, particularly non‐OECD nations, may continue to increase imports of coal, from Australian or elsewhere. Particularly as policy and regulations to achieve the emissions reductions needed have yet to be agreed and implemented in many nations, including Australia. This is an evolving policy area. In 2006, in considering whether Scope 3 greenhouse gas emissions (from the downstream use of the coal to be mined) should be considered, the Land and Environment Court found that “It is not appropriate to limit the Scope of the environmental assessment on the basis that GHG emissions may or may not be subject to regulation in the future whether in NSW or overseas.”63. As noted earlier in this section, the Proponent has considered the greenhouse gas emissions of the project, but notes that it cannot control the end use of the product. The Department’s assessment accepts that the emissions would be accounted for by others and, also that; if the coal from this project was not available, alternative sources would be found. The Commission accepts that planning controls cannot be used to regulate Scope 3 emissions from the downstream use of the coal exported. Notwithstanding this, the Commission notes that the global response to climate change and the future coal demand and pricing is uncertain. In discussing the future of coal the International Energy

60 International Energy Agency, 2013, World Energy Outlook 2013 p1, 2, 5 & 6 http://www.iea.org/publications/freepublications/publication/WEO2013_Executive_Summary_English.pdf accessed 21 October 2014 61 International Energy Agency, 2014, World Energy Outlook 2014 p3. http://www.iea.org/Textbase/npsum/WEO2014SUM.pdf accessed 13 November 2014. 62 International Energy Agency, 2014, World Energy Outlook 2014 p2. 63 Gray v The Minister for Planning and Ors [2006] NSWLEC 720 138, http://www.lawlink.nsw.gov.au/lecjudgments/2006nswlec.nsf/c45212a2bef99be4ca256736001f37bd/dc4df619de3b3f02ca257228001de798?OpenDocument accessed 28 October 2014


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Agency notes the need to reduce “the risk that capacity is idled before recovering its investment costs.”64 It will be important to ensure that the development and investment in this project does not become the justification or driver of coal production. In this regard the Commission considers the project should be developed in stages, so that the facility’s coal handling capacity is no larger than is necessary. From a private investment perspective, staging the project also has merit to ensure that excess capacity and over investment is avoided. In addition, a five year rather than ten year approval timeframe would enable a reconsideration of the project in light of evolving policies and legislation should commencement of construction of the coal loader be delayed beyond five years.

4.6.2 STRATEGIC DIRECTION FOR THE PORT AND CITY OF NEWCASTLE AND WIDER HUNTER

REGION

An issue directly linked to the question of climate change and global demand for coal, is whether expansion of coal mining and coal exports is consistent with the strategic direction for the Hunter Region. The Port of Newcastle is currently said to be the largest coal port in the world and this additional coal terminal would further expand the coal handling capacity of the port. In submissions and at the Public Hearing, the Commission heard a number of arguments against intensifying the region’s coal sector. The key arguments put to the Commission against continued growth and intensification of the coal industry, were that:

the additional coal mining operations needed to supply the increased throughput capacity at

the port would have unacceptable impacts on the region;

the cumulative impacts of transporting the coal to the port and managing the coal at the

port posed unacceptable health risks for the community, particularly from dust;

there is a need for global reductions in consumption of fossil fuels such as coal and increased

extraction and export of coal is inconsistent with this need to address climate change and

would be better focusing on investments in alternative industries, such as renewables,

rather than continuing to rely on coal production;

the coal industry does not have a sustainable long term future and Newcastle should be

diversifying its economy rather than intensifying its ties to the coal industry.

The Commission has considered each of these points. In relation to the impacts of mining the coal, the Commission is satisfied that the extraction of coal to supply the port would be subject to a separate assessment of each coal mine application and is not a matter for consideration on this proposal. The cumulative impacts on air quality around the port and along the train lines are considered in section 4.3. As noted in the previous section, despite the need to reduce carbon emissions to achieve global climate change goals and meet the target of no more than 2°C of warming, global demand for coal is still predicted to increase in the coming decades. Whether these predictions prove correct will only be known in time. Nevertheless, many countries have invested heavily in coal‐fired power stations to produce electricity. So long as electricity can continue to be produced economically from these plants, coal will continue to be in demand as a source of power. Some speakers argued for the development of a renewable energy manufacturing sector in the region, rather than further coal mining. The Commission does not see any impediment to such a plan stemming directly from this proposal. The success of such a venture would be dependent on a range

64 International Energy Agency, 2014, World Energy Outlook 2014 p3. http://www.iea.org/Textbase/npsum/WEO2014SUM.pdf accessed 13 November 2014


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of factors largely unrelated to this application, although the Commission does acknowledge that the recent high Australian dollar and competition for labour have impacted on other sectors, including manufacturing in previous mining boom periods. Coal mining and its associated support industries represent a significant Industry sector and employer in the Hunter, and the region may need to consider options to diversify its economy away from thermal coal mining at some point in the future. Whether it is sensible to continue to build this industry, potentially at the expense of alternative sectors is a matter that is beyond the scope of this review, but which is recommended for further government consideration and direction. Setting aside the merits of the coal industry, or even its long term future, there is an argument for diversifying the region’s economy and associated port facilities rather than continuing to expand its coal handling capacity. The coal industry has always been exposed to global coal prices and, as is evident at the moment, mining jobs are sensitive to this exposure. The allocation of prime port side land for a further coal terminal, in what is already said to be the biggest coal port in the world, is an important strategic consideration for the region. The Proponent has argued that this proposal will not impede other industries65. The Commission accepts that at present the site is underutilised; requires remediation of contamination on the site; and may continue in its undeveloped state for some years. Further, there is no shortage of alternative portside land available for development, as significant parts of the Mayfield Precinct are also currently vacant. Nonetheless, over the life of the project this situation may change as Newcastle and NSW continue to grow. Ideally, this would be considered in the various strategic planning documents covering NSW Ports, the Lower Hunter and the City of Newcastle. In March 2014, the NSW Ports’ Five Year Port Development Plan was released, however, the Port of Newcastle is not considered in this document, presumably due to its recent lease by the NSW Government.

4.6.2.1 NSW FREIGHT AND PORTS STRATEGY

The older, 2013, NSW Freight and Ports Strategy indicates “that Port growth plans developed by the port operators will clarify the way in which NSW ports will expand to meet future growth in freight volumes”. On the Port of Newcastle, the strategy states that “it will continue to be NSW’s primary coal export port. The Port of Newcastle will also continue to service bulk grain and other commodities”66. In this Strategy document the T4 project is listed as a key capacity development for the Port of Newcastle. In addition to coal, the Strategy also highlights potential gas and continuing grain exports for the Port of Newcastle. In relation to gas, it notes that there is increasing commercial interest – but that any proposed facility would need to undergo rigorous assessment particularly around safety and environmental issues. In relation to grain, it is listed as a key export product for the Port of Newcastle and indicates that the existing nominal grain export capacity of 4.2 million tonnes per annum “is sufficient for forecast growth demands. Achieving this nominal capacity is, however, dependent upon receiving sufficient rail access to move these volumes to port as well as

65 PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013 66 NSW Government. 2013. NSW Freight and Ports Strategy. http://freight.transport.nsw.gov.au/documents/tfnsw‐freight‐and‐ports‐strategy‐low‐res.pdf accessed 28 October 2014 p 116


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supply, demand and logistic support impacts.”67 The Strategy sets a number of tasks, including “2D‐2 – to develop a Port of Newcastle growth plan”.

4.6.2.2 DRAFT STRATEGIC DEVELOPMENT PLAN FOR THE PORT OF NEWCASTLE

No growth plan for the Port of Newcastle was available at the time of writing (the Commission understands one is in the process of being developed by the new lessee’s The Port of Newcastle). The 2013 Draft Strategic Development Plan for the Port of Newcastle will presumably provide a background starting point for this future work. In the existing plan the Port of Newcastle is divided into four spatial precincts, each with a specific trade focus, the Kooragang Precinct’s focus is coal. The plan notes that “The coal industry has long‐term leases on the site of up to 45 years. Accordingly, this precinct will remain largely dedicated to coal exports over the life of the Strategic Development Plan.”68 At the time the Strategy was written, coal exports were forecast to grow, “driven by strong demand for thermal coal from east and south east Asia… The challenge for producers and the coal chain in the period to 2025 is to build both production capacity and coal chain capacity to meet the export task.”69 It goes on to note that with the addition of T4, the Port would have total capacity of between 280 and 330 million tonnes a year and this capacity is expected to be adequate for the coal export task to 2040. Challenges in hauling the coal long distances, from outside the Hunter, are acknowledged. The Plan notes that the Port also handles diversified cargo and some of these are imports that service the coal industry. Agriculture is another key export commodity with strong demand expected over the next 30 years, however determinants for growth in this sector are said to be dependent on the sector’s ability to increase its production as well as the capacity of the supply chains to deliver that cargo. In time, it is said that the port will handle containerised cargoes to service the expanding population, however any future container terminal development will only occur once Port Botany and Port Kembla are fully developed and utilised. The plan nominates key priority actions for the port, including working with the relevant government agencies and customers to achieve a whole of port approach to managing issues such as air quality and noise70. The Commission acknowledges that expansion of coal handling facilities on Kooragang Island could provide greater flexibility to deal with air quality and noise issues attributable to the PWCS Carrington coal terminal.

4.6.2.3 STRATEGIC PLANNING FROM NEWCASTLE CITY COUNCIL

The City of Newcastle is in the process of developing a Local Planning Strategy and has released a number of working papers as part of this process. These will build on the 2012 update of the Newcastle Urban Strategy, which acknowledges the significance of the port stating “the value of the land with frontage to the deep water of the Port of Newcastle will be recognised and protected. Land use controls will be developed to ensure this protection and to maintain a land bank for future port

67 NSW Government. 2013. NSW Freight and Ports Strategy. http://freight.transport.nsw.gov.au/documents/tfnsw‐freight‐and‐ports‐strategy‐low‐res.pdf accessed 28 October 2014 p 117 68 Newcastle Port Corporation. 2013. Draft Strategic Development Plan for the Port of Newcastle P 54. http://pandora.nla.gov.au/pan/139583/20130403‐1108/newcastleportplan.com.au/document/show/9.pdf accessed 28 October 2014 69 Newcastle Port Corporation. 2013. Draft Strategic Development Plan for the Port of Newcastle P 16. 70 Newcastle Port Corporation. 2013. Draft Strategic Development Plan for the Port of Newcastle P 42.


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related activities” 71 The strategy does not specifically mention coal. This is left to the City’s Local Planning Strategy Working Paper on Infrastructure, which notes that “There are currently 20 berths of varying capacity. Nine of these berths are allocated to the export of coal with the remaining eleven berths handle bulk liquids, solids, break bulk, containers and project cargo. The Port of Newcastle is a significant contributor to the Hunter Region’s economy.”72 The Terminal 4 proposal is noted in the working paper, but no comment is provided. The Port will continue to be an important generator of industry and employment for the region. The availability of industrial land, the protection of routes into and out of the Port and interface issues will be key issues for the future.73 Regional Strategies and Plans The 2006 Lower Hunter Regional Strategy has limited discussion of the coal industry and associated freight capacity requirements, but notes that “the Region still retains significant coal resources and the potential for ongoing coal production and export”74.

The 2012 Upper Hunter Strategic Regional Land Use Plan supports growth of the coal sector noting “Coal is NSW’s most significant commodity export ‐ worth over $14 billion in 2010/11. Approximately sixty per cent of this coal is mined in the Upper Hunter region. It is estimated that 63 per cent of the gross regional product comes from mining. Between 2006 and 2010, direct employment in mining in the region rose from 5,500 to more than 11,000. Mining support industries, such as engineering, construction, transport, logistics and human resources have also become well established in Singleton and Muswellbrook.

… Over the period to 2036, the region’s workforce is expected to grow by between 7,400 and 8,200 jobs. Much of this increase will be driven by the growth of the coal and coal seam gas industries and focused in the LGAs of Singleton, Muswellbrook and Upper Hunter. Efficiency improvements in the mining industry will also support growth, without the need for additional labour.”75

The need for infrastructure and port capacity upgrades is also acknowledged in the Plan, stating: “The growth of the coal and gas extraction industries will be one of the most significant factors in shaping the communities and the infrastructure needs of the Upper Hunter region over the next few decades. The growth of these sectors will require infrastructure provision and upgrades, for example to rail infrastructure linking the mining areas to the Port of Newcastle and upgrades to the coal loading capacity of the port.” 76

The Government’s 10 year Strategic Business Plan NSW 2021 is also referenced and the associated Hunter Regional Action Plan lists investment in economic diversity as a priority action, and proposes to increase employment opportunities in a range of sectors, one of which is mining. The plan also

71The City of Newcastle. 2012. Newcastle Urban Strategy, A 25 year Revitalisation Plan for Newcastle ‐ Update July 2012, p 30 http://www.newcastle.nsw.gov.au/__data/assets/pdf_file/0015/116421/Newcastle_Urban_Strategy_Update_2012.pdf accessed 27 October 2014 72 The City of Newcastle. 2013. Draft Local Planning Strategy, Working Paper – Infrastructure. http://www.newcastle.nsw.gov.au/__data/assets/pdf_file/0004/213997/Working_Paper_‐_Infrastructure_FINAL.pdf accessed 27 October 2014. 73The City of Newcastle. 2013. Draft Local Planning Strategy, Working Paper – Infrastructure. P 44. 74 Department of Planning. 2006. Lower Hunter Regional Strategy 2006 – 2031. P 8 http://www.planning.nsw.gov.au/regional/pdf/lowerhunter_regionalstrategy.pdf accessed 28 October 2014. 75 Department of Planning and Infrastructure. 2012. Upper Hunter Strategic Regional Land Use Plan. p43 http://www.planning.nsw.gov.au/Portals/0/StrategicPlanning/FINAL%20low%20res%20Upper%20Hunter%20SRLUP.pdf accessed 28 October 2014 76 Department of Planning and Infrastructure. 2012. Upper Hunter Strategic Regional Land Use Plan. P36 http://www.planning.nsw.gov.au/Portals/0/StrategicPlanning/FINAL%20low%20res%20Upper%20Hunter%20SRLUP.pdf accessed 28 October 2014


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seeks to build “Newcastle as a renewable energy hub for research and deployment” and “Grow the visitor economy in the Hunter”77. The Commission accepts that this fourth coal terminal proposal, and its associated expansion of the coal mining sector is consistent with the NSW Government’s planning and strategies for the Hunter Region and the Port of Newcastle. Nonetheless the Commission notes these strategies and plans assume that demand for NSW’s coal will grow. Given the present subdued coal price, and associated downturn in the coal sector; the Commission cautions against continued assumptions of growth based on past trends in coal exports in future planning for the region. While no one can predict the future, there seems to be a real possibility that coal prices and associated exports may not recover to the levels predicted in past forecasts. Global coal prices and NSW coal exports are currently subdued, but some forecasts are predicting strong demand for coal in the decades to come. While this proposal is not needed to meet current export demand requirements, the Commission accepts that the proposal is consistent with the region’s future planning strategies and consequently considers it is reasonable to have future expansion options available to cater for this, as long as it does not jeopardise or limit other economic development at the port and in the wider region. Nonetheless, at present, granting an approval to this proposal (when it is not needed for the immediate future) provides little public benefit if no investment occurs. However, the Proponent stands to gain significant benefit from an approval, in terms of certainty and increased asset value to the company. If an approval is granted but no works proceed (a likely outcome, as there is no demand for the extra throughput capacity in the immediate future), the site will remain a public liability in its current contaminated state (or the cost of remediation would be sourced from public funds). The Commission considers that given the lack of demand for the project at present, the Proponent would need to commit to some public benefit works, to be provided in the short term, such as a start to site remediation and biodiversity offset works, in order to ensure this project can be shown to be in the public interest. Notwithstanding this it will be important that any final decision considers the latest up to date coal demand and pricing forecasts to justify the final throughput capacity of each stage of the terminal’s development. As noted in other sections, the Commission considers that at least initially reducing the currently proposed 70 million tonne annual throughput provides greater capacity to avoid environmentally sensitive portions of the site (see section 4.1) and would also reduce the total dust emission impacts of the project (see Section 4.3). Staging of the development of this throughput would need to be regulated to ensure each new stage is only developed when needed. As also noted in the previous sections on Air Quality and Noise, the Commission agrees with suggestions made in submissions and in the Department’s assessment that options to manage impacts from industries in the port through a port wide strategy have some merit and should be further explored. A port wide management approach has the potential to Provide a more useful context for considering cumulative impacts, along with up stream and down stream impacts associated with the port (such as from rail and shipping). It could also provide a better basis for streamlined development of responsive operational plans for air quality and other environmental issues.

77 NSW Government. 2012. Hunter Regional Action Plan. p 6 and 7 respectively. https://www.nsw.gov.au/sites/default/files/regions/regional_action_plan‐hunter.pdf accessed 28 October 2014


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In relation to the wider Hunter region, it will be important that future strategic planning work gives due consideration to the coal mining industry’s market exposure. The Commission recommends that the Proponent and the Department consider the latest coal pricing and demand forecasts in justifying the final throughput capacity and resulting onsite development footprint, layout and staging plans, to ensure environmental impacts are minimised.

4.6.3 STORMWATER/GROUND WATER

A number of submissions received by the Commission raised concerns about possible contamination and pollution effects on Kooragang wetlands, the Hunter River and Hunter Estuary. This included impacts from construction, cumulative impacts of discharges, surface water contamination and future stormwater runoff. Drainage across the project site is highly modified by culverts, drains, levees, artificially formed drainage depressions and ponds. The ponds were predominantly formed as a result of rail embankments and past landfill activities and are recharged by rainfall, surface water, ground water and limited exchange between ponds. Several of these artificial ponds are proposed to be filled to enable site capping and construction. These ponds do not have direct surface connections to water bodies outside of the project site, meaning the impacts of filling on the surface‐water flow regime outside of the site are expected to be negligible. The PPR explains that proposed construction of the coal terminal would alter the existing surface flow regime within the project area. To avoid or minimise potential operational impacts to adjoining surface water bodies, PWCS has proposed to operate the site as a 'no discharge site'. This will be achieved through the use of retention ponds and by managing and reusing onsite surface water to limit discharge to adjoining waterways. During construction, runoff would be diverted to the northern portion of Deep Pond for settling before discharge to the Hunter River via the path of the existing culvert to the Hunter River South Arm. It is proposed to realign a portion of the culvert to avoid the wetland at the river's edge. The northern portion of Deep Pond would be converted to three settling ponds designed to improve water quality before discharge to the Hunter River. In its statement of commitments and PPR, PWCS has outlined a range of other management and monitoring measures to ensure there are no significant adverse impacts to receiving water quality during construction or operation of the proposed coal terminal. These include the following:

An erosion and sediment control plan will be designed and implemented prior to and during construction. The principal objective of surface water management will be to prevent contamination of surface and ground waters.

A surface water quality monitoring program will be developed and implemented to monitor water quality during construction.

A realigned estuarine channel will be constructed to the north of the rail embankment, connecting Mosquito Creek and one of its tributaries, to maintain the existing tidal flow regime to wetlands potentially affected by disturbance to the southern end of Mosquito Creek Tributary.

Works will be undertaken to avoid impacting the tidal regime of the wetland complex near the Eastern Watercourse. The mitigation design will be finalised prior to construction. Subject to approval from National Parks and Wildlife Services.

Drainage will be provided within the rail embankment to maintain flows into the Eastern Freshwater Wetland from the rail area.


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The hydraulic connection of the southern portion of Deep Pond with Blue Billed Duck Pond will be unchanged. Flows will continue to discharge to the Hunter River South Arm at the existing discharge point via a drainage channel that will be constructed linking the southern sections of Deep Pond to the existing culverts under the NCIG rail line.

The surface water management system will maximise re‐use of captured stormwater runoff to meet process water demands on the site.

The Commission notes that PWCS’s existing coal terminal on Kooragang Island (KCT) has similar operations, catchment characteristics and surface water management to that anticipated for the proposed development. The Department has advised that discharge from KCT is of similar quality to that recorded in the Hunter River, and it is anticipated that discharge from the proposed coal terminal would be similar. As advised in Section 4.2.4 of this Review, the EPA has recommended amendments and additional conditions in relation to stormwater and surface water management78. The Commission recommends adoption of these conditions. The Commission generally accepts the Department’s position that while impacts to on‐site surface water and flooding are unavoidable, the Proponent has committed to appropriate management measures. These include the use of retention ponds and developing a 'no discharge site', where suitable water is re‐used wherever possible. However, as discussed in Section 4.1 of this report, the Commission believes that there is scope for further reduction in impacts on the biodiversity values of Deep Pond and the adjacent GGBF habitat ponds with refinement of the design and footprint of the proposed stockyards. The Commission believes that with specialist advice and innovative design, the biodiversity values of Deep Pond could be enhanced at the same time as providing best practice stormwater management in a sensitive location.

4.6.4 VOLUNTARY PLANNING AGREEMENT AND DEVELOPMENT CONTRIBUTIONS

Council’s view Newcastle City Council’s Section 94A Development Contributions Plan 2009 (updated March 2011) sets out provisions for the payment of developer contributions to offset the costs of Council providing social infrastructure required as a result of development. Under the plan, levies are generally applied at a fixed rate depending on the cost of the development. The EP&A Act 1979 allow for developers and councils to enter into a Voluntary Planning Agreement (VPA) in instances where the rates contained in a Section 94 plan are unsuitable. On 15 August 2014 the Commission met with the General Manager of Newcastle City Council (Mr Ken Gouldthorp) and Director of Planning (Peter Chrystal) to discuss the proposed development. At the meeting, Council explained that while it is generally supportive of the proposed coal terminal, there is concern regarding the amount of Section 94A contributions that would be payable under the Department’s recommended conditions. Condition A14 of the Department’s recommended conditions states:

Development Contribution A14 Prior to the commencement of construction, the Proponent shall pay The City of

Newcastle Council an amount equivalent to one percent of Council’s works schedule 78 NSW EPA. 2014. correspondence to Planning Assessment Commission dated 25 August 2014


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and new public facilities listed in Appendices A and B of the Section 94A Development Contributions Plan 2009

The Commission understands that under the terms of the condition above, PWCS would be required to pay a contribution of approximately $528, 140. By comparison, under Council’s Section 94A Plan a contribution of $48 million would be payable. In a letter to the Commission dated 18 August 2014, Council explained that it does not support the Department’s approach. At the meeting on 15 August 2014, Mr Gouldthorp acknowledged that while Council’s Section 94A plan does not contemplate development the size of Terminal 4, appropriate contributions need to be made to ensure sufficient community benefits. Council is seeking to obtain these benefits via a VPA. If an agreement cannot be reached between parties, Council considers a contribution with a value of 1% of the project cost to be reasonable. Proponent’s view The PPR and Response to Submissions (prepared by EMM 2013) states that the calculation of development contributions based on levies outlined in Council’s Section 94A plan are unsuited to large developments such as the subject proposal. This is because the levies are not commensurate with the demand they generate and do not account or credit community facilities provided by the Proponent. As such, PWCS is open to considering negotiating a VPA that accurately represents the agreed increase in demand for public amenities and services in the area caused by the proposed development. Department’s view The Secretary’s PEAR notes the difficulty associated with calculating a reasonable contribution based on Council’s Section 94A plan when the capital investment value is very large. The Department accepts the Proponent’s position that the proposal will have limited social impacts on the region and therefore considers a “modest “contribution to be appropriate. This is reflected in the recommended condition A14 outlined above. In addition to Condition A14, the Department also supports the Proponent's commitment to entering into a VPA with Newcastle City Council79. Newcastle City Council has responded to this in a letter to the Commission (dated 18 August 2014). Council explains that the Department's support for a VPA is “perplexing”, given Condition A14 would negate the need for a VPA. Commission’s recommendation The Commission notes that both the Proponent and Council are willing to enter a VPA and seem committed to negotiating terms. The Commission encourages this collaborative approach and recommends the Department amend its Development Contribution condition to reflect the outcome of these negotiations.

79 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment Report. June 2014. p 70


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5. CONCLUSIONThe Commission has carefully reviewed the proposal, along with the submissions made, the Department’s preliminary assessment report and draft conditions and the expert advice from the Centre for International Economics. The Commission agrees with the Department’s findings that the proposal is approvable. Nonetheless there is considerable uncertainty about the timing for the proposal and this raises some questions about the justification for granting an approval at this stage, when there is considerable uncertainty about when or even whether the project will proceed. Alternatively the Commission recognises that there are adverse environmental and economic outcomes associated with allowing the site to remain in its current contaminated state and without any direct action to protect and enhance biodiversity values. The Commission has found that these public benefit deficiencies could be overcome with some further clarification and commitments to undertake the remediation and biodiversity management works in a timely and integrated manner. It will be up to the Proponent and the Department to ensure the current potential public liabilities and uncertainties regarding the timing of the remediation and biodiversity management works are resolved in the final proposal referred to the decision maker. With some innovative refinements to the layout of the project, the proposal has the potential to minimise current conflicts between biodiversity values and the need to remediate the highly disturbed and contaminated site. The site’s location within the industrial lands in the Port of Newcastle means that impacts from the noise and dust emissions of the project should be able to be adequately contained with the adoption of a suite of proactive real‐time management measures. The Commission supports the Department’s initiative to examine a coordinated port wide management approach to issues such as noise and air quality. Such a coordinated approach could have material benefits for residential communities around the port, as well as optimising the development, capacity and use of the port. The Commission has found that other local issues such as stormwater management and traffic impacts can be adequately managed. Numerous submissions and presentations to the Commission called for rejection of the project however, due to concerns about the up and downstream impacts of mining, transporting and burning the coal that would be exported through the terminal. The Commission notes that the impacts of mining would need to be considered in the detailed merit assessment of each new mine proposal sought. In relation to the greenhouse gas emissions, the Commission acknowledges the need to prevent dangerous climate change (defined in current international agreements as 2 °C of warming). Ultimately, the Commission accepts that planning controls cannot be used to regulate scope 3 emissions from the downstream use of the coal exported. Nonetheless, the Commission notes that it would be prudent to ensure that future strategic planning work for the region gives due consideration to the coal mining industry’s market exposure and the potential economic implications of evolving international policy on climate change. While the proposal before the Commission is for an approval to commence construction within ten years, the Commission considers that a five year approval is more appropriate given the uncertainties discussed in the report and also advice from the Department that the Proponent would not be required to carry out some of the environmental obligations until and if the project approval is triggered.


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The Commission is satisfied the project is approvable, subject to the following recommendations and associated refinements to the project and the draft conditions.

6. RECOMMENDATIONS Lapsing Period

1. The Commission recommends a five year rather than ten year approval lapsing period for the project. A ten year commencement period could result in extended delays in dealing with contamination and biodiversity issues; as well as sanctioning a project out of step with potential changes to air quality standards and greenhouse gas policies. A five year approval provides a reasonable period to commence construction based on current planning and environmental requirements.

Biodiversity

2. The Commission considers it is critical that the detailed design of the offset sites be prepared in consultation with government agencies including the Commonwealth, OEH and relevant Council. It is noted that the recommended biodiversity conditions (B16 to B21) adequately address this recommendation.

3. As noted above, the Commission recommends that a five year approval, rather than the 10

year timeframe proposed by PWCS. A five year approval period would provide an appropriate timeframe for the Proponent to commence the conservation works outlined in this chapter, which would have significant biodiversity benefits. A 10 year approval could delay these works, which would result in further degradation of habitat and loss of population.

4. The Commission is of the view that the Tomago offset area would need to demonstrate that

is it functioning successfully prior to construction commencing at the project site. While the Commonwealth recommends one year of demonstrated success, the Commission considers Tomago should be functioning for a minimum of three years to be confident of documenting at least one successful migratory season.

5. The stockyard layout should be refined so that it has a reduced impact on Deep Pond and

the nearby Frog Pond and Railway Pond. This would provide improved GGBF and Australasian Bittern habitat as well as minimising the impact on migratory shorebirds and any potential to impact on the values of the Hunter Estuary Wetlands Ramsar site.

Contamination

6. The Commission believes that the contamination on Kooragang Island needs to be remediated as soon as practicable. Before a determination is made, the Commission recommends that the Proponent, the EPA and the HDC negotiate and agree on a comprehensive remediation strategy, with clear roles and responsibilities, and an agreed time‐table.

7. The Commission recommends adoption of the amendments and additional conditions

recommended by the EPA in the correspondence dated 10 October 2014. In addition, Condition B32 should be amended to reference a one in 100 year average recurrence interval discharge event, (as in correspondence from the EPA dated 25 August 2014).


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Air Quality 8. Pro‐active and Reactive Management

The Commission supports the Department’s proposed requirements for pro‐active and reactive management of air quality and recommends that consideration be given to strengthening the Department’s conditions requiring pro‐active and reactive mitigation and management. In particular it would be necessary to confirm what mitigation measures would be applied, which components could be shut down (as is required of modern mining operations) and provide clear justification for any continued emissions during adverse conditions. This would also need to extend to the management of emissions from ships and locomotives that are associated with the project.

9. Shore Power

The Commission recommends that the Proponent should be required to make spatial provision for shore power for vessels, so that it could be installed on the site in future, in the event this becomes a viable option.

10. Minimising emissions from coal wagons

The Commission recommends any approval should include conditions that ensure coal should only be accepted at the project site where it has been appropriately profiled within the wagon and where the coal at the top of the wagon (i.e. that exposed to the wind) meets appropriate moisture content levels, or has been treated with an effective chemical veneer.

11. Cleaning of coal wagons

The Commission recommends any approval should include conditions that require wagons leaving the site to be completely empty, with dump doors fully closed and sufficiently clean to ensure there is no visible evidence of coal deposition on the ballast around the rail tracks from trains leaving the site.

Noise In relation to the noise limits that should apply to the project, the Commission recommends:

12. That noise limits should be included for locations at Warabrook and Sandgate (as recommended by the EPA);

13. That options to tighten the noise limits that would apply to T4 in concert with the Kooragang Coal Terminal should be further explored;

14. That additional noise limits specific to the T4 project should also be considered.

Other 15. The Commission recommends that where the conditions specify that issues shall be

managed in accordance with the relevant guidelines, the condition specifies that the latest

version of the policy or guideline would apply.

16. The Commission recommends that the Proponent and the Department consider the latest

coal pricing and demand forecasts in justifying the final throughput capacity and resulting

onsite development footprint, layout and staging plans, to ensure environmental impacts

are minimised.


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ReferencesARTC (2014), 2014‐2023 Hunter Valley Corridor Capacity Strategy, July, p.7. Bulga Milbrodale Progress Association Inc v Minister for Planning and Infrastructure and Warkworth Mining Limited [2013] NSWLEC 48. http://www.caselaw.nsw.gov.au/action/pjudg?jgmtid=164038 accessed 28 November 2014. Department of Environment Website. 2014. http://www.environment.gov.au/climate‐change/emissions‐reduction‐fund accessed 6 November 2014 Department of Environment. 2014 http://www.climatechange.gov.au/reducing‐carbon/reducing‐australias‐emissions accessed 6 November 2014. ENVIRON. 2013. Locomotive Emissions Project: Scoping Study of Potential Measures to Reduce Emissions from New and In‐service Locomotives in NSW and Australia. http://www.epa.nsw.gov.au/resources/air/locoemissrep.pdf accessed 6 November 2014 Gray v The Minister for Planning and Ors [2006] NSWLEC 720 138, http://www.lawlink.nsw.gov.au/lecjudgments/2006nswlec.nsf/c45212a2bef99be4ca256736001f37bd/dc4df619de3b3f02ca257228001de798?OpenDocument accessed 28 October 2014 International Energy Agency, 2013, World Energy Outlook 2013 http://www.iea.org/publications/freepublications/publication/WEO2013_Executive_Summary_English.pdf accessed 21 October 2014 International Energy Agency, 2014, World Energy Outlook 2014 http://www.iea.org/Textbase/npsum/WEO2014SUM.pdf accessed 13 November 2014. National Environment Protection (Ambient Air Quality) Measure, Schedule 2, http://www.comlaw.gov.au/Details/C2004H03935 accessed 6 November 2014. National Environmental Protection Council Service Corporation. 2011. National Environmental Protection (Ambient Air Quality) Measure Review – Review Report. http://www.scew.gov.au/resource/national‐environment‐protection‐ambient‐air‐quality‐measure‐review‐review‐report accessed 28 November 2014. Newcastle Port Corporation. 2013. Draft Strategic Development Plan for the Port of Newcastle http://pandora.nla.gov.au/pan/139583/20130403‐1108/newcastleportplan.com.au/document/show/9.pdf accessed 28 October 2014 NSW Department of Environment and Conservation. 2005. Approved Methods for the Modelling and Assessment of Air Pollutants in New South Wales. http://www.epa.nsw.gov.au/resources/air/ammodelling05361.pdf accessed 6 November 2014. NSW Department of Planning. 2006. Lower Hunter Regional Strategy 2006 – 2031. http://www.planning.nsw.gov.au/regional/pdf/lowerhunter_regionalstrategy.pdf accessed 28 October 2014. NSW Department of Planning and Infrastructure. 2012. Upper Hunter Strategic Regional Land Use Plan.


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http://www.planning.nsw.gov.au/Portals/0/StrategicPlanning/FINAL%20low%20res%20Upper%20Hunter%20SRLUP.pdf accessed 28 October 2014 NSW Department of Planning and Infrastructure. 2012. Project Approval, Kooragang Coal Terminal Mod 3. https://majorprojects.affinitylive.com/public/d5ca8de27579d43ce753fabb7f9bd2d3/Consolidated%20Approval%20(MODS%201,%202%20&%203)_Nov%202012.pdf Accessed 28 November 2014 NSW Department of Planning and Environment. 2014. Secretary’s Preliminary Environmental Assessment. NSW EPA. 2014. Review of regulation of railway systems activities under the ‘Protection of the Environment Operations Act 1997, Position paper. August 2014 http://www.epa.nsw.gov.au/resources/epa/14657railpospap.pdf accessed 5 November 2014 NSW EPA. 2014. Correspondence to the PAC dated 25 August 2014 (see Appendix 6) NSW EPA 2014. Correspondence to the PAC. Dated 10 October 2014 (see Appendix 6) NSW Government. 2012. Hunter Regional Action Plan. https://www.nsw.gov.au/sites/default/files/regions/regional_action_plan‐hunter.pdf accessed 28 October 2014 NSW Government. 2013. NSW Freight and Ports Strategy. http://freight.transport.nsw.gov.au/documents/tfnsw‐freight‐and‐ports‐strategy‐low‐res.pdf accessed 28 October 2014 NSW Health, Hunter New England Local Health District. 2013. Letter to the NSW Department of Planning and Infrastructure titled Port Waratah Coal Services Limited Response to Community Submissions – Terminal 4 project, dated 17 November 2013. https://majorprojects.affinitylive.com/public/eb4f2c8a90b25f949e221a6a94f58cd7/HNE_EH_Planning_T4.pdf accessed 11 November 2014 NSW Office of Environment and Heritage. 2014. Emissions Overview 2011/12. http://www.environment.nsw.gov.au/climatechange/emissionsoverview.htm accessed 21 October 2014 PAEHolmes. 2011. Potential Measures for Air Emissions from NSW Ports: Preliminary Study. Prepared for the NSW Office of Environment and Heritage, 23 June 2011. http://www.epa.nsw.gov.au/resources/air/PortsPreliminaryStudy.pdf accessed 5 November 2014. PWCS/EMM. 2012 T4 Project, Environmental Assessment. February 2012. PWCS/EMM. 2013. T4 Project, Response to Submissions and Preferred Project Report. September 2013. PWCS/EMM. 2014. Response to Submissions on Preferred Project. January 2014. PWCS. 2014. KCT Annual Noise Investigation Report (2014).


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The City of Newcastle. 2012. Newcastle Urban Strategy, A 25 year Revitalisation Plan for Newcastle ‐ Update July 2012, http://www.newcastle.nsw.gov.au/__data/assets/pdf_file/0015/116421/Newcastle_Urban_Strategy_Update_2012.pdf accessed 27 October 2014 The City of Newcastle. 2013. Draft Local Planning Strategy, Working Paper – Infrastructure. http://www.newcastle.nsw.gov.au/__data/assets/pdf_file/0004/213997/Working_Paper_‐_Infrastructure_FINAL.pdf accessed 27 October 2014. The Guardian, 22 July 2014, Germany, UK and Poland top ‘dirty 30’ list of EU coal‐fired power stations, http://www.theguardian.com/environment/2014/jul/22/germany‐uk‐poland‐top‐dirty‐30‐list‐eu‐coal‐fired‐power‐stations accessed 20 October 2014 The White House. 2014. FACT SHEET: U.S.‐China Joint Announcement on Climate Change and Clean Energy Cooperation. http://www.whitehouse.gov/the‐press‐office/2014/11/11/fact‐sheet‐us‐china‐joint‐announcement‐climate‐change‐and‐clean‐energy‐c accessed 13 November 2014 United Nations Website http://www.un.org/climatechange/summit/2014/09/ban‐seeks‐vision‐concrete‐action‐world‐leaders‐un‐climate‐summit/ accessed 20 October 2014 United Nations Website http://www.un.org/climatechange/science-and-solutions/ accessed 20 October 2014 United Nations Website http://www.un.org/climatechange/summit/2014/09/2014‐climate‐change‐summary‐chairs‐summary/ accessed 20 October 2014 U.S. Energy Information Administration website http://www.eia.gov/countries/country‐data.cfm?fips=gm accessed 20 October 2014 WHO. 2013. Review of evidence on health aspects of air pollution – REVIHAAP Project: Technical Report. http://www.euro.who.int/__data/assets/pdf_file/0004/193108/REVIHAAP‐Final‐technical‐report‐final‐version.pdf accessed 3 November 2014


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ListofAppendices

1. Minister’s Terms of Reference 2. List of Speakers at the Public Hearing 3. Summary of Meetings

a. 22 July 2014 – Briefing from the Department of Planning and Environment b. 14 August 2014 c. 14 August 2014 d. 15 August 2014 e. 15 August 2014 f. 12 September 2014 – Briefing to the CIE g. 15 September 2014 – Meeting with Department of Planning and Environment h. 15 September 2014 – Meeting with the EPA i. 24 September 2014 – Meeting with the EPA j. 1 October 2014 – Meeting with the CIE k. 1 October 2014 – Meeting with NSW Health l. 30 October 2014 – Meeting with the CIE m. 6 November 2014 – Meeting with the Department of Planning and Environment

4. Additional information from the Proponent 5. Additional Information from the Department of Planning and Environment

a. 10 September 2014 b. 26 November 2014

6. Agency Correspondence a. EPA correspondence dated 25 August 2014 and 10 October 2014 b. Commonwealth Department of Environment tables supplied 10 October 2014 c. NSW Health correspondence dated 24 October 2014

7. Independent advice from the Centre for International Economics

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