Western Australia to target renewables with new land tenure legislation

Known as the Land and Public Works Legislation Amendment Bill 2022 (Bill), the Bill will be introduced into parliament by the WA state government in the coming months, to be enacted later in 2022. The WA state government wants to introduce the Bill to address the ambiguities and inefficiencies of the current regime set out in the Land Administration Act 1997 (LAA).

WA has competitive advantages in the renewable hydrogen market, including wind and solar resources and vast areas of land with low population density. However, much of this land is Crown land managed under the LAA. While the LAA was initially innovative and replaced several outdated statutes when it was introduced in 1998, its ambiguities and inefficiencies have been recognised.

The Bill will allow approvals for land tenure and projects requiring Crown land to be streamlined, introduce a new form of tenure known as a diversification lease, and improve the way in which pastoral land is administered.

The government expects the Bill to remove constraints to development of Crown land in WA, create development through diversified land use, and facilitate best-practice land management. These benefits will all be helpful to the state’s net zero by 2050 policy.

Deanne Ogilvie of Pinsent Masons said: “The amendments proposed in the Bill which move away from the existing permit arrangements to a diversification lease will mean that renewable energy projects become more commercially viable and feasible. The switch from a licence to a lease, which brings with it security of tenure, as well as the transferability of the leases should make it easier for holders to finance and monetise these types of projects.”

Currently, a pastoralist who occupies land under a pastoral lease can only use that land for pastoral purposes such as the commercial grazing of stock. A pastoralist may apply for a diversification permit to undertake non-pastoral activities, which are only granted in limited circumstances and do not allow for the development of hydrogen and other renewable projects.

A diversification lease will be a new form of non-exclusive leasehold tenure. This addition to the existing tenure regime will provide tenants with the right to undertake activities on the land and will not create private land that excludes access by others such as resource companies. Therefore, under a diversification lease, hydrogen and renewable energy projects can co-exist with other activities such as grazing.

George Varma of Pinsent Masons said: “We are seeing a number of developers struggling to overcome the initial hurdle of securing sites to develop projects currently.  This proposed change to the way pastoral land is administered has the potential to unlock large parcels of land to develop innovative co-located renewable energy projects, which can propel the growth of Western Australia’s green hydrogen market.”   

“If Australia, and particularly Western Australia, is serious about becoming a major player in the developing global hydrogen trading market, it will be critical for legislation such as this to be enacted to encourage investment and growth in this sector,” Varma said.   

“Western Australia is well placed, given its existing oil and gas infrastructure, to become a world leader in exporting green hydrogen. But this can only happen if we make it easier for projects to be developed. The introduction of the Bill is certainly a step in the right direction and will have a significant impact on driving growth and development in the renewables sector on an expedited basis,” he said.

The Bill is significant to those considering developing, funding, or investing in renewable energy and hydrogen projects in WA. It is also important to existing pastoral leaseholders whose leasehold may be suitable for renewable energy or hydrogen projects. It is expected the Bill will assist in facilitating the development of infrastructure required for WA hydrogen and other renewable energy projects as well as enabling the development of carbon farming, horticulture, cultural tourism, and environmental conservation.

Co-written by Vanessa Scrivener at Pinsent Masons.