A Wesfarmers-backed lithium refinery will cut its net emissions by 38% within 10 years, after the Western Australian EPA requested stronger carbon commitments.

Western Australia's EPA today recommended approval for Covalent Lithium's proposed spodumene ore refinery in Kwinana.

Covalent Lithium is a joint venture between Wesfarmers and Sociedad Quimica y Minera de Chile S.A (SQM).

The EPA has recommended conditions that reflect commitments made in a revised greenhouse gas management plan submitted by the joint venture.

These include a pledge to reduce scope 1 emissions within 10 years from start-up levels of 159,800 tonnes to net emissions of under 100,000 tonnes, through process improvements and offsetting, and to reach net-zero by 2050.

If offsets are used, they will be either Australian Carbon Credit Units, international Gold Standard or VCS units, or others deemed acceptable by the state's Environment Minister.

Initial carbon plan made few commitments

The commitments are significantly stronger than those in the joint venture's initial version of the greenhouse gas plan, which made no commitment to cut emissions to 100,000 tonnes within 10 years, and proposed no net-zero goal.

The initial plan argued that it wasn't appropriate to impose a requirement for offsets at the facility level.

However, the EPA requested that the company "revise and improve" the original version.

The EPA assessment report recommends that the company be required to implement the revised greenhouse gas management plan.

In addition, it recommends a slightly different form of greenhouse gas limit that would require the refinery to have emissions totalling no more than 500,000 tonnes over the five years from 2035 to 2040.

Covalent estimates the lithium hydroxide produced at the refinery – through its use in batteries – might help to reduce annual emissions of greenhouse gas by 1.6 million tonnes, equating to a reduction of 80 million tonnes over the life of the project.

It also says the refinery's emissions intensity will be lower than any other similar facility.

The EPA acknowledges that the batteries using the project's lithium would contribute to the more widespread use of electric vehicles.

Although the carbon condition recommended by the EPA is significantly stronger than the company's original proposal, it is much weaker than the condition of full offsetting of scope 1 emissions that would have been mandatory under EPA guidance introduced in 2019.

The guidance was quickly rescinded after strong objections from the Business Council and companies including Woodside.