Energy from Waste Precincts

The basic idea

In NSW, large Energy from Waste facilities are not meant to be built just anywhere.

The NSW Energy from Waste Framework sets location rules for facilities that thermally treat waste and recover energy from it. Some activities are excluded, and some limited exceptions apply. But the main rule is that large facilities treating mixed waste streams — such as municipal solid waste — must be located in nominated Energy from Waste precincts.¹

This matters because “energy recovery” does not just mean making electricity. Under the Regulation, it can include recovering energy as heat, mechanical energy, electricity, or a fuel.²

Why have precincts?

The precinct system is a location filter.

The NSW Government says Energy from Waste may have a role in dealing with residual waste — waste that cannot reasonably be reused, recycled or otherwise recovered. But it is meant to be used carefully, without undermining recycling or creating unacceptable risks to human health or the environment.³

The idea is to steer these facilities towards places that are considered more suitable, such as areas with:

• existing or planned industrial infrastructure;

• road or rail connections;

• waste and energy infrastructure;

• lower risk of land-use conflict;

• links to regional jobs, net zero and waste-management strategies.¹ ⁴

In plain terms, the precinct approach is meant to avoid a situation where each proponent simply picks a site and then argues the case from scratch.

Current Energy from Waste precincts

The EPA’s current Energy from Waste Framework lists the following precincts:¹

1. Parkes Activation Precinct – Current nominated precinct

2. Southern Goulburn-Mulwaree Precinct – Current nominated precinct

3. West Lithgow Precinct – Current nominated precinct; EPA says changes are being made to re-gazette the map and include the former Wallerawang Power Station site

4. Tomago Precinct – Listed in the current EPA Framework; EPA says it is being established in the Tomago industrial area near existing resource-recovery facilities

What if a proposed project is outside a precinct?

In practical terms, a proponent outside a precinct would need to show one of the following:

1. the project is not covered by the Energy from Waste rules;

2. the project fits within a specific exclusion or exception;

3. the site is, or becomes, a nominated precinct; or

4. the rules are changed.

Applying this to Kandos

Kandos is not listed by the EPA as a current Energy from Waste precinct.

To proceed as things stand today, Cenagen would need to explain why the current framework does not prevent the project from proceeding in Kandos. Based on Cenagen’s own description of the project as involving processed waste, high-temperature treatment and production of methanol as a fuel, that looks like being to be a difficult argument to sustain.

If no such exclusion or exception applies, Cenagen’s way forward would appear to depend on a change to the current framework — for example, by nominating Kandos or the relevant surrounding area as a new Energy from Waste precinct, or by changing the relevant regulatory settings.

Does being in a precinct mean approval?

No.

A precinct only answers the first location question. It does not mean a project is approved.

Any Energy from Waste proposal would still need detailed environmental assessment, including issues such as air quality, human health, agricultural risk, noise, traffic, water and social impact. It would also need public exhibition and community consultation.¹

If approved, the facility would also need an Environment Protection Licence from the EPA, with operating conditions, emission limits and monitoring requirements.¹

The practical takeaway

The precinct system is a gateway test.

For places like Kandos, the first question is not just whether an Energy from Waste project is good or bad. The first question is whether the current NSW rules allow that kind of project to be built in Kandos at all.

Sources

¹ NSW Environment Protection Authority, Energy from Waste Framework, updated 8 May 2026.

² Protection of the Environment Operations (General) Regulation 2022 (NSW), Chapter 9, Part 4, sections 142–145, current version as at June 2026.

³ NSW Environment Protection Authority, Energy from waste in NSW, updated 9 March 2026.

⁴ NSW Department of Planning, Housing and Infrastructure, Energy from waste, updated 6 May 2026.

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