Regulatory priority and risk

The EPA takes in to account the type and nature of emissions from licensed activities, pollution control measures in place, proximity to and sensitivity of the environment and receptors, including residents, to determine the licence environmental risk level.

The EPA also considers the environmental performance of the licensee. This takes into account any regulatory actions that the EPA has taken and any environmental systems and procedures a licensee has in place or environmental improvements that a licensee has undertaken.

Risk – likelihood and consequence

When identifying risks posed to the environment the EPA considers the likelihood of an event occurring and any associated consequence of the event.

Risk-based licensing takes into account consequence by considering the nature and type of emissions and the receiving environment. Likelihood of the consequence occurring takes into account controls in place to reduce the likelihood of an event occurring.

The EPA also uses the licensee's trend of environmental performance over a three-year period as an additional indicator of likelihood.

Nature of discharge

The EPA focuses on the major emissions discharged from a premises, i.e. those having adverse impacts on the environment or human health.

The risk assessment considers the wide range of controls that can be put in place to minimise risk to the environment, such as control equipment or management practices, and also examines how these controls or management measures are implemented at the premises.

Operating equipment competently, maintaining equipment in a good working condition and employing best management practices reduces risks posed to the environment.

Some licensed activities may be low risk due to a relatively simple discharge that has well understood and adequate controls in place. Other licensed activities will be determined as higher risk due to the type and complexity of discharges regardless of the controls in place.

Large and complex activities

Premises that cover large geographical areas and sites that have linear infrastructure such as large sewage treatment plants, railway systems and road construction may have multiple emission sources using a variety of pollution-control techniques with varying efficiencies.

These activities may be determined as higher risk due to the type and complexity of discharges regardless of the controls in place.

For more information on how the EPA assesses these activities see Section 4 of the risk assessment tool guidance (PDF 595KB).

Proximity to receiving environment and receptors

The closer the receiving environment or sensitive receiver is to a premises, the higher the risk posed from discharges and emissions.

The risk assessment considers both population density and any particularly sensitive receivers nearby for air emissions. As population density increases, so will the proportion of sensitive individuals, as does the risk posed to human health and amenity from air and odour emissions.

For water, the sensitivity of the environment is highly dependent on the receiving water-type, the state of the catchment and the pollutants discharged. For example, inland rivers are highly sensitive to discharges of phosphorous, while open oceans are not as sensitive; discharges into potable (drinkable) water supplies pose a higher risk to human health than those to other types of receiving waters.

Licensed activities may be low or high risk due to the location. The same licensed activity with the same controls in place will receive a higher risk level if they are located within close proximity to sensitive receiving environments and receptors, such as areas of sensitive groundwater or close to highly populated areas.

For example, regional small-scale sewage treatment plants may discharge to sensitive receiving watercourses, such as inland rivers. Although the scale of operation may be small the sensitive receiving environment means that the risk posed is greater and this is reflected in the risk level determined by the EPA.


Factory A is located in a rural area with relatively few residences within close proximity and no surface waters close by. Factory B operates in an urban area with a high density of residents bordering the site and is located in a drinking water catchment area.

The two factories may be undertaking the same type and level of activity and discharge the same pollutants and the operators may also have a similar level of environmental performance, however, factory A receives an overall risk level of low whereas factory B, due to the proximity to people and sensitive receivers such as a potable water supply, receives a higher risk level.

Factory A - Rural area, simple emissions and well understood controls

Factory A - Rural area, simple emissions and well understood controls

Factory B - Urban area, simple emissions and well understood controls

Factory B - Urban area, simple emissions and well understood controls

This ensures that the EPA targets its regulatory attention on those activities that have the greatest potential to cause impacts on the environment and human health and represent the greatest environmental risk, in this case factory B. This means that factory B will be subject to increased regulatory and compliance oversight, and if appropriate, is likely to result in more intensive monitoring and reporting obligations on the licence.

For further information regarding how the EPA undertakes risk assessments, please refer to the risk assessment tool user guide (PDF 595KB).

For further information on how the EPA approaches regulation under risk-based licensing refer to the Risk-based licensing page.

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