One of Australia’s largest resource projects is operating without regulatory oversight on its carbon emissions because the West Australian government decided against reintroducing state controls that were lifted during the carbon tax era.

Wheatstone, Chevron’s $30bn liquid natural gas project in the Pilbara, was one of two projects that applied in 2012 for an exemption to state-based emissions regulation in response to a policy that allowed the environment minister to extinguish regulations that were “non-complementary” to a federal scheme.

The other project was the West Angelas open-cut iron ore mine near Newman, in which Rio Tinto owns a controlling interest.

The state’s environment minister at the time, Bill Marmion, scrapped the requirement for both projects to have a greenhouse gas abatement plan that included setting targets and recording emissions.

The decision was contrary to the recommendations of both the Environmental Protection Authority and an independent economic report commissioned by government.

The current environment minister, Albert Jacob, told Guardian Australia on Friday that he would not reimpose state regulations on the projects, despite the carbon tax being repealed by the Abbott government as of 1 July, 2014.

“I do not intend on reviewing or reapplying any greenhouse gas emission conditions that have been removed by the previous minister for environment,” Jacob said.

“The government’s view is that decisions on the design, implementation and timing of the regulation of greenhouse emissions are primarily matters for the commonwealth government and the federal parliament.”

Labor’s environment spokesman, Chris Tallentire, said the 2012 decision was justified, but there was no justification for leaving the projects unregistered in the absence of a national scheme.

He estimated the project had been “gifted a windfall profit of at least $54m a year” as a result of the regulation vacuum.

“It’s a betrayal of the environmental impact assessment process that we have here in WA,” Tallentire said.

An EPA report on the Wheatstone project said it would “substantially” increase the state’s greenhouse gas output, emitting 10m tonnes of carbon dioxide a year – a 13.5% increase on the state’s 2006-07 emission levels.

Its report on the request to lift state-based reporting requirements said the recommended offset target was non-complementary to the carbon tax but all other greenhouse gas reporting requirements should remain in place.

Piers Verstegen, director of the Conservation Council of Western Australia, said the decision to not reinstate emissions requirements took the state back to the 1980s.

“Some of the the nation’s biggest polluters are located in WA and now have no controls on their carbon pollution whatsoever,” he said.

“With the removal of a carbon price, both the state and commonwealth governments have completely abrogated their responsibility to control pollution, to protect our environment and to address climate change.”

It is the third time in a month the Barnett government has been criticised for apparently putting the needs of the mining and resources industry above environmental considerations.

In December, Marmion – who is now mining minister – announced a 50% rebate on iron ore royalties for junior miners after the price of iron ore fell. A week later he said the government had given $1bn previously held in environmental bonds back to mining companies, six months after replacing the bond scheme for mine site rehabilitation with an annual levy.

The decision to leave the greenhouse gas emissions of two large projects unregulated was disappointing but not surprising, said the WA campaign director of the Wilderness Society, Peter Robinson.

“Western Australia is clearly a pace-setter in terms of giving the mining industry a big free break,” he said.