Western Australia’s environmental protection authority has announced tough new measures aimed at curbing greenhouse gas emissions from large projects.

The EPA, which works independently and makes recommendations to the WA government about whether new developments should be granted environmental approval, said on Thursday it was setting a “higher bar” for how it would assess the impact of major projects on the climate.

The authority’s chairman Tom Hatton told reporters in WA the move was necessary because Australia was not on track to meet its Paris targets and the current policies of the federal government “are not going to deliver the outcomes as currently applied that are necessary for Australia to meet its international obligations under the Paris agreement”.

Under the guidelines developers proposing projects with direct emissions of more than 100,000 tonnes of carbon dioxide equivalent per annum would be required to demonstrate they have taken all “reasonable and practicable design measures”, including use of renewable energy, to reduce or avoid emissions.

They will also have to offset all net direct emissions associated with the project.

The EPA’s guidelines note that the Australian government’s key climate policy, the emissions reduction fund and its safeguard mechanism, lacks “an effective carbon restraint or rate”.

The EPA also expressed concerned about the trajectory of WA’s emissions, which had increased by 27% from 2000 to 2016.

“Western Australia has the second highest per capita emissions of all Australian states and territories, with emissions per capita well above those of other developed economies, including resource-based economies such as Canada,” the guidelines state.

Environment groups have welcomed the policy as a “balanced approach” that would bring environmental benefits and require polluters to make greater effort to reduce their carbon pollution.

The Wilderness Society said it was “a sensible policy for modern times”.

“This is a huge step forward for policy,” Kit Sainsbury, the state director for TWS, said. “It’s really going to a limit a lot of projects going forward, particularly LNG (liquefied natural gas) and, potentially, also fracking.”

Sainsbury said it was an example of states stepping in, in the absence of effective federal policy to combat climate change.

Australia’s emissions continue to increase and the federal government has faced criticism this week for suggesting the opposite, based on one particular measurement of data from a single quarter.

Much of the increase has been attributed to rising emissions associated with the LNG industry, particularly WA’s Gorgon LNG plant.

The Conservation Council of Western Australia said the new policy would deliver jobs and environmental benefits for the state.

“While this policy does not explicitly rule out new fossil fuel developments, it is a big step forward that could make a huge contribution to controlling pollution growth while helping to drive new sustainable industries for WA,” the council’s director Piers Verstegen said.

The guidelines could have implications for major developments proposed for WA, including Woodside Energy’s proposed $11bn Scarborough offshore gas project.

A spokeswoman for Woodside said tackling climate change “while providing the energy the world needs” was a complex challenge.

“The projects that Woodside is proposing in WA will not only underpin jobs, investment and gas supplies – they will also make a significant contribution to emissions reduction by offering countries the opportunity to switch to cleaner burning natural gas,” she said.

“To make investments like these, business needs stable, national – preferably international – policy frameworks, such as a global carbon price.”

She said the “direct and arbitrary” regulation proposed by the EPA “appears out of step with Australia’s international targets and the associated emissions trajectory, raises further potential for conflict between regulation and jobs, and may perversely penalise investment in cleaner fuels such as natural gas which have a big role to play in global emissions reduction.

The spokeswoman said the EPA had not consulted with proponents of projects that might be affected.

The WA government said the guidance, released by the EPA as an independent authority, was not a government policy but set the EPA’s expectations when considering greenhouse gas emissions related to a proposal.

“The McGowan Government is fully supportive of our job-creating LNG industry and will listen to their views as part of our response to the EPA,” the environment minister, Stephen Dawson, said.