Energy minister Bill Johnston announced the policy in parliament today, stating it was a ‘sensible and balanced policy'.
"As a responsible state government, it is important to ensure that projects have certainty for the long term. Protecting and creating jobs is, and will always be, our number one priority," he said in a statement.
The decision by the McGowan government has drawn support from major oilers including Woodside Petroleum who said the WA climate change policy will be "aligned with the federal government's obligations under the Paris Agreement."
"The state government has listened to industry and has taken an important step towards providing certainty for the major investments that will deliver jobs, opportunity and tax revenue to Western Australia," Woodside chief Peter Coleman said in a statement to Energy News.
"The WA Environmental Protection Authority must take the same approach as it consults on its proposed new guidelines on greenhouse gas emissions."
The state government still supports the federal government's target of reducing emission by 28% by 2030.
This is despite leading environmental and climate scientists, including EPA chairman Tom Hatton, stating the targets are not ambitious enough to meet the nation's Paris climate agreement targets.
The policy supports proponents of major new projects or project expansions that emit significant emissions, but will expect proponents to develop greenhouse gas management plans that detail their contribution toward achieving the new target.
The government's approach aims to facilitate flexible solutions to greenhouse gas reduction that promote innovation, new technologies and new opportunities for Western Australia, according to the minister's statement.
The plan was welcomed by the state's EPA.
"Two years ago, the EPA called on the state government to review its climate policy and we welcome today's policy announcement to deal seriously with the issue of climate change," an EPA spokeswoman told Energy News.
In March, The EPA released new guidelines that suggested new projects implement a zero-emissions policy, via offsets and other measures and would have required upgrades to current projects such as Woodside's North West processing facility to implement a similar policy.
They were withdrawn a week later after howls from the state government and major LNG exporters like Woodside, with accusations that the independent authority was bullied into submission.
It would also have had an effect on its planned Scarborough and Browse LNG developments with COO Meg O'Neil saying the EPA's guidelines could cause delays.
The EPA said it intends to release its greenhouse gas assessment guidance, which is currently open for consultation, by the end of the year and the guidance will make clear the expectations of the EPA for a proponent to avoid, reduce and then offset its greenhouse gas emissions.
The Australia Institute's climate and energy program director Richie Merzian told Energy News the policy seemed to be timed and directed at undermining the EPA, which has already been pushed to revisit and further consult on emissions guidelines for major projects.
"This policy leaves the door wide open for industry to have free rein to write their own climate action plans instead of fully offsetting their emissions as proposed under the EPA's draft guidelines released earlier this year," he said.
"If the WA Government is serious about climate change than it should require all new projects to fully offset their emissions - by the WA Government's own numbers, offsets would cost these super profitable gas projects only a tiny share of their profits."
The broader WA climate policy is currently being developed and will be released in 2020.