Emerging issues and market trends
Energy transition
One of the key actions in Downer’s journey towards decarbonisation is monitoring and preparing the business for a changing energy landscape.
In 2020, the Australian Government released its first Low Emissions Technology Statement which is underpinned by a Technology Investment Roadmap. The Technology Investment Roadmap categorises four types of technologies. The highest priority is ‘Priority low-emission technologies’. The other three priorities are: ‘Emerging and enabling technologies’, ‘Watching brief technologies’ and ‘Mature technologies’.
Priority low-emission technologies are defined as potentially transformative economic and abatement impacts. They have high potential to reduce emissions both domestically and internationally across multiple sectors and applications. They are aligned with Australia’s comparative advantages. These technologies will be the focus of new public investment and the Government has indicated that it will strive to remove barriers to the development of these technologies. Downer is a key contributor to two of these technologies, being Carbon Capture Use and Storage, as well as Hydrogen.
Carbon Capture Use and Storage: The Intergovernmental Panel on Climate Change (IPCC) and the International Energy Agency (IEA) have concluded the Paris Agreement goals of net zero by 2050 cannot be achieved without carbon sequestration deployed at scale as a key technology. One of these technologies is Carbon Capture Use and Storage
(CCUS) which has been identified as a ‘Priority low-emission technology’ that is essential to decarbonising Australia’s Industrial and Power Generation sector. The technology involves installing equipment to capture CO2 from process plants, and then either utilising that CO2 in other processes, or storing it permanently by injecting it deep underground.
Downer’s customers, Chevron and Santos, are making significant investments in developing CCUS technology for storing carbon in depleted underground gas reservoirs. One example is Santos’ proposed Moomba CCS project, which is expected to initially store 1.7 million tonnes of CO2 annually. Downer is contributing to the development of these projects through our specialist capabilities in mechanical, electrical, high voltage and in-field engineering services across Gorgon in Western Australia, the Surat Basin in Queensland and the Cooper Basin in South Australia.
Hydrogen: Downer is closely monitoring the market for alternative fuel sources, as this forms a key part of our overall decarbonisation strategy. Downer’s involvement in this space is not only designed to lower our direct emissions, but also support our customers in their decarbonisation efforts. Our Asset Services business has been investing in developing decarbonisation solutions for our customers, and this has only accelerated in recent times. Hydrogen is seen as a significant enabler to a clean energy future, switching from a source which is predominantly used as a feedstock for the natural gas and coal industry to a clean energy source.
Electric vehicles
In 2019, Downer’s Asset Services team introduced four Hyundai IONIQ Electric Vehicles (EVs) into its fleet to use as part of a carpool system for offices in Perth and New South Wales.
In 2021, Downer New Zealand also purchased 10 new MG ZS Electric Vehicles for its Hamilton Infrastructure Alliance project.
Downer currently has 132 EVs, Plug-in Hybrid EVs (PHEVs), and Hybrid vehicles within its Group-managed fleet and continues to seek opportunities to expand this number through scaling up pilot programs throughout the business. EVs and Hybrids represent 2 per cent of Downer’s overall Light Vehicle fleet (excluding non-managed Spotless and Mining vehicles).
Downer is also pioneering the use of electric vehicles in the contracts we are delivering. In May 2021, Transport for NSW (TfNSW) awarded the Keolis Downer joint venture a $900 million contract to operate and maintain bus services in Sydney’s Northern Beaches and Lower North Shore for eight years. Under the contract, Keolis Downer will work closely with TfNSW to introduce and deliver 125 electric buses over the next eight years, delivering more sustainable transport options for the local community from two newly electrified depots in Brookvale and Mona Vale.
Biodiversity
Biodiversity is the variety of all life on earth and includes the different plants, animals and microorganisms, the genes they contain and the ecosystems they are part of. Biodiversity can provide us with services and products such as food, pharmaceutical goods, building materials, fuel, purification of air and water and decomposition of wastes. Threats to biodiversity include the loss of habitat, spread of invasive species and unsustainable use of natural resources.
Biodiversity is an emerging global issue and, while it is not a material issue for Downer, it is still important to our company and stakeholders. It is an issue that we manage on behalf of our customers on several of our projects.
Downer’s position on biodiversity, conservation and land use management is to carry out our activities in a legally compliant and responsible manner that protects biodiversity and ecosystems.
Downer considers biodiversity at a project level where activities being performed have the potential to impact an area with high biodiversity value. The prevailing legislation includes the Environment Protection Biodiversity Conservation Act (EPBC) 1999 in Australia or the Resource Management Act 1991 in New Zealand. These cross reference to the International Union for Conservation of Nature’s (IUCN) Red List, the world’s most comprehensive information source on the global extinction risk status of animal, fungus and plant species.
In these circumstances, Downer or our customer negotiates impact mitigation strategies and approvals with the relevant regulatory authority. Regardless of who receives the approvals, Downer’s management response and controls are the same. Downer has well established flora and fauna management and biosecurity procedures and standards, which address the risks related to biodiversity. At a site level, a threatened species management plan and a conservation plan is created for each site when an approval is triggered. These plans include preventative and mitigatory controls to protect biodiversity in affected areas.
Downer’s Marshlands Bridge project is one of the most ecologically sensitive projects in Christchurch, New Zealand, with lizards (skinks), a NZ native climbing nettle, and the endangered lamprey fish all within the project area. Before works could start, our onsite ecologist captured and relocated the skinks, and also relocated the climbing nettle. The riverbank and nearby drain are known breeding habitats of the lamprey, a unique freshwater fish species that has survived for over 450 million years. The lamprey migrates into rivers to spawn, and the juvenile lamprey spend four years in rivers and
streams before migrating out to sea. The lamprey is a taonga (a treasured possession in Māori culture), but is threatened with extinction. Our team ensured that excavation work only took place once the site was cleared by the ecologist, who used electro fishing and sifted through silt deposited in a half skip to make sure as many juvenile lamprey as possible were saved.
In Australia, the goal of the EPBC Act is to provide a ‘net benefit’ – and therefore in some cases, offsets are required where our operations are unable to achieve the desired ‘net benefit’ to local species.
As an example, Downer’s High Capacity Metro Train (HCMT) site, which has been constructed to facilitate the maintenance of Melbourne’s new urban fleet, impacted a total of 2.18 hectares of Growling Grass Frog habitat and 1.02 hectares of Southern Brown Bandicoot habitat.
Along with enhancing the remaining vegetation through additional plantings and weed control, the EPBC approval required that prior to the commencement of the action, the approval holder (Evolution Rail) must secure an offset containing 5.66 hectares of habitat at Fernbank to protect the Growling Grass Frog. An Offset Management Plan was developed and outlines a 10-year management commitment including fencing, woody weeds, herbaceous weeds, pest animals and annual monitoring and reporting.
We’re also conscious of the wildlife that can be transported to our worksites – and the impact that could have on local ecosystems. Downer’s Infrastructure Projects team working on the Warrnambool Line Upgrade noticed a couple of stowaway frogs in a delivery of equipment. The team contacted their Environmental Advisor, who determined the frogs to be the common Southern Brown Tree Frogs (Litoria ewingii). A disease called Chytrid fungus has the ability to wipe out frog populations, so if these frogs were carrying such a disease, they could potentially harm the local population of frogs. The frogs were taken to Melbourne Zoo for swabbing. The frogs were cleared of Chytrid fungus and have been transported to the education program at the Amphibian Research Centre, which is supported by another Downer customer, Melbourne Water.
We also contribute positively to biodiversity through the services that we deliver. Our land management services within the Defence business is one example. The services we deliver ensure that protections are in place if Defence operations overlap with protected areas, or areas of high biodiversity value.
