Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2010 - 2011 - 2012
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
CLEAN ENERGY AMENDMENT (INTERNATIONAL EMISSIONS TRADING
AND OTHER MEASURES) BILL 2012
CLEAN ENERGY (CHARGES-EXCISE) AMENDMENT BILL 2012
CLEAN ENERGY (CHARGES-CUSTOMS) AMENDMENT BILL 2012
EXCISE TARIFF AMENDMENT (PER-TONNE CARBON PRICE EQUIVALENT)
BILL 2012
OZONE PROTECTION AND SYNTHETIC GREENHOUSE GAS (IMPORT LEVY)
AMENDMENT (PER-TONNE CARBON PRICE EQUIVALENT) BILL 2012
OZONE PROTECTION AND SYNTHETIC GREENHOUSE GAS
(MANUFACTURE LEVY) AMENDMENT (PER-TONNE CARBON PRICE
EQUIVALENT) BILL 2012
CLEAN ENERGY (UNIT ISSUE CHARGE-AUCTIONS) AMENDMENT BILL
2012
EXPLANATORY MEMORANDUM
(Circulated by the authority of the Minister for Climate Change and Energy Efficiency,
the Hon Greg Combet AM MP)
Table of contents
Glossary .................................................................................................. 1
General outline and financial impact ....................................................... 5
Chapter 1 Amendments relating to linking with overseas
emissions trading schemes......................................... 19
Chapter 2 Other amendments ...................................................... 51
Index ..................................................................................................... 67
Glossary
The following abbreviations and acronyms are used throughout this
explanatory memorandum.
Abbreviation Definition
AIIU Australian-issued international unit
ANREU Act Australian National Registry of Emissions
Units Act 2011
ANREU Regulations Australian National Registry of Emissions
Units Regulations 2011
The bill References to `the bill' are to the Clean
Energy Amendment (International Emissions
Trading and Other Measures) Bill 2012
Carbon pricing mechanism or The carbon pricing mechanism set up by the
mechanism CE Act
CE Act Clean Energy Act 2011
CE (Charges-Customs) Act Clean Energy (Charges-Customs) Act 2011
CE (Charges-Excise) Act Clean Energy (Charges-Excise) Act 2011
CE (IUSC) Act Clean Energy (International Unit Surrender
Charge) Act 2011
CE (Unit Issue Charge- Clean Energy (Unit Issue Charge-Auctions)
Auctions) Act Act 2011
CER Certified Emission Reduction unit
CFI The Carbon Farming Initiative
The amendment bills The package of bills including the Clean
Energy Amendment (International Emissions
Trading and Other Measures) Bill 2012, the
Excise Tariff Amendment (Per-tonne Carbon
Price Equivalent) Bill 2012, the Ozone
Protection and Synthetic Greenhouse Gas
(Import Levy) Amendment (Per-tonne
Carbon Price Equivalent) Bill 2012, the
Ozone Protection and Synthetic Greenhouse
Gas (Manufacture Levy) Amendment
(Per-tonne Carbon Price Equivalent) Bill
2012, the Clean Energy (Charges-Excise)
Amendment Bill 2012, the Clean Energy
(Charges-Customs) Amendment Bill 2012,
and the Clean Energy (Unit Issue Charge-
1
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Abbreviation Definition
Auctions) Amendment Bill 2012
Clean Energy Legislative The package of Acts including:
Package · Clean Energy Act 2011;
· Clean Energy (Consequential
Amendments) Act 2011;
· Clean Energy Regulator Act 2011;
· Climate Change Authority Act 2011;
· Clean Energy (Unit Shortfall Charge-
General) Act 2011;
· Clean Energy (Unit Issue Charge-
General) Act 2011;
· Clean Energy (Charges-Excise) Act
2011;
· Clean Energy (International Unit
Surrender Charge) Act 2011;
· Ozone Protection and Synthetic
Greenhouse Gas (Manufacture Levy)
Amendment Act 2011;
· Ozone Protection and Synthetic
Greenhouse Gas (Import Levy)
Amendment Act 2011;
· Fuel Tax Legislation Amendment (Clean
Energy) Act 2011;
· Excise Tariff Legislation Amendment
(Clean Energy) Act 2011;
· Customs Tariff Amendment (Clean
Energy) Act 2011;
· Clean Energy Legislation Amendment Act
2012.
Eligible Kyoto unit A Kyoto unit that is also an eligible
international emissions unit
ERU Emissions Reduction Unit
EU European Union
EU Directive Directive 2003/87/EC of the European
Parliament and of the Council of
13 October 2003 establishing a scheme for
greenhouse gas emission allowance trading
within the Community and amending
Council Directive 96/61/EC
EU ETS The European Union Emissions Trading
System
European allowance unit An allowance within the meaning of the
European Union Greenhouse Gas Emission
2
Glossary
Abbreviation Definition
Allowance Trading Directive, but excluding
allowances issued in respect of aviation
activities
Excise Tariff Act Excise Tariff Act 1921
Fuel Tax Act Fuel Tax Act 2006
GST Goods and Services Tax
Kyoto unit An Assigned Amount Unit, a Certified
Emission Reduction unit, an Emission
Reduction Unit, a Removal Unit or a
prescribed unit issued in accordance with the
Kyoto rules
NGER Act National Greenhouse and Energy Reporting
Act 2007
OTN Obligation Transfer Number
PEN Provisional Emissions Number
Registry Australian National Registry of Emissions
Units
Regulator The Clean Energy Regulator
RMU Removal Unit
SGG (Import Levy) Act Ozone Protection and Synthetic Greenhouse
Gas (Import Levy) Act 1995
SGG (Manufacture Levy) Act Ozone Protection and Synthetic Greenhouse
Gas (Manufacture Levy) Act 1995
3
General outline and financial impact
Background
Clean Energy Legislation
The Australian Government accepts the advice of scientists that
greenhouse gas emissions are contributing to climate change and this
poses great risks to our environment, our economy and our society.
That is why Australia is joining with the rest of the world in cutting
carbon pollution dramatically over coming decades. The economies that
accept this challenge are those that will be more competitive in the years
ahead.
Delayed action is a false economy, raising the economic costs of action
and risking worse impacts from the effects of climate change. As
Australia produces more carbon pollution per head of population than any
developed country in the world and is within the top 20 in terms of
absolute emissions, we have no choice but to act strongly to reduce our
levels of pollution.
A broad-based carbon price is the most environmentally effective and
cheapest way to reduce pollution. A carbon price puts a price tag on
carbon pollution.
The carbon price is now creating powerful incentives for all businesses to
cut their pollution by investing in clean technology or finding more
efficient ways of operating. It is now creating economic incentives to
reduce pollution in the cheapest possible ways, rather than relying on
more costly approaches such as government regulation and direct
subsidies.
These incentives are now flowing through the economy. The carbon price
makes lower-polluting technologies, especially clean energy technologies,
more competitive and boosts investment in these technologies. In this
way, introducing a price on carbon is triggering the transformation of the
economy towards a clean energy future.
A cap and trade emissions trading scheme, as will be in force from 1 July
2015, places a cap on the amount of pollution that covered sectors can
emit. That cap declines over time, allowing Australia to meet our
emissions reduction targets. The carbon price is then set by the market as
it determines the least cost ways of reducing carbon pollution.
The Clean Energy Legislative Package implements the carbon pricing
mechanism and provides that it may be linked to credible overseas
emissions trading schemes and to the Carbon Farming Initiative. It also
5
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
provides for assistance to households and industry, to assist households
with the impact of the carbon price, support jobs, protect the
competitiveness of emissions-intensive trade-exposed industries and
support energy security.
Further detail about the policy context of the Clean Energy Legislative
Package is set out in the Explanatory Memorandum for the Clean Energy
Bill 2011.1
Clean Energy Amendment (International Emissions Trading and Other
Measures) Bill 2012 and related bills
The:
· Clean Energy Amendment (International Emissions Trading
and Other Measures) Bill 2012;
· Excise Tariff Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012;
· Ozone Protection and Synthetic Greenhouse Gas (Import
Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012;
· Ozone Protection and Synthetic Greenhouse Gas
(Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012;
· Clean Energy (Charges-Excise) Amendment Bill 2012;
· Clean Energy (Charges-Customs) Amendment Bill 2012; and
· Clean Energy (Unit Issue Charge-Auctions) Amendment Bill
2012
make amendments to the CE Act, the ANREU Act, the NGER Act, the
Fuel Tax Act, the Excise Tariff Act, the SGG (Import Levy) Act, the SGG
(Manufacture Levy) Act, the CE (Unit Issue Charge-Auctions) Act, the
CE (Charges-Customs) Act and the CE (Charges-Excise) Act that cover:
· arrangements to facilitate the linking of Australia's carbon
pricing mechanism to other countries' emissions trading
schemes, including the EU ETS;
· the removal of the price floor and repeal of the Clean Energy
(International Unit Surrender Charge) Act 2011;
· consequential changes to the equivalent carbon pricing of
liquid fuels and synthetic greenhouse gases;
1
The explanatory memorandum to the Clean Energy Bill 2011 is available at:
http://www.comlaw.gov.au/Details/C2011B00166/Download
6
General outline and financial impacts
· the streamlining of arrangements for relinquished carbon
units;
· limits on issue of carbon units at auction without a pollution
cap in place;
· the content of Measurement Determinations under the NGER
Act;
· the treatment of natural gas under the carbon pricing
mechanism; and
· the treatment of GST joint venture operators in the Opt-in
Scheme.
On 28 August 2012 the Australian Government and the European
Commission announced that the carbon pricing mechanism would be
linked with the EU ETS.
Under this arrangement, Australian liable entities will be able to use
European allowance units to meet up to 50 per cent of their liabilities
under the carbon pricing mechanism from the commencement of the
flexible price period on 1 July 2015. This ensures that Australian liable
entities have access to a broader range of credible, low-cost abatement
from an established market. This will allow for a smoother transition
from the fixed price to a market based, emissions trading scheme.
Full linking will also allow companies that operate in both Europe and
Australia to access units which are fully transferable in both jurisdictions,
making compliance simpler and making it easier to manage emissions
across operations.
The EU ETS is a mandatory emissions trading system that operates across
the European Union, covering all 27 EU member states, along with
Norway, Iceland and Liechtenstein. Operating since 2005, the EU ETS is
the world's largest emissions trading scheme, covering some 11,000
facilities. It has delivered cost-effective emissions reductions. In 2011,
emissions had fallen 17.5 percent below 1990 levels in the European
Union.
As part of this arrangement, the Government agreed that it would remove
the price floor and restrict the quantity of eligible Kyoto units that liable
entities can use to discharge their carbon pricing liabilities. These
changes will reduce the complexity of the linking arrangement and
facilitate the convergence of Australian and European carbon prices.
This means that from 1 July 2015 Australia's carbon price will reflect that
of our second largest trading bloc, and be consistent with at least 30 other
countries - including the United Kingdom, France and Germany.
7
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
It also means that the carbon price will be fixed for only three years,
before becoming an internationally linked emissions trading scheme
where the market sets the carbon price.
The amendment bills package makes provision for the linking of the
Australian carbon pricing mechanism with overseas emissions trading
schemes, including the EU ETS. The amendments are designed to enable
the Government to make and implement arrangements to link with a
variety of schemes, and are therefore designed to provide appropriate
flexibility for the Government in implementing these technical
arrangements.
The global carbon market is growing year by year with markets emerging
across the globe.
· The EU ETS currently operates in 30 European countries.
· Emissions trading schemes are also operating in New
Zealand, Switzerland and at the provincial level in Japan and
in nine US States.
· In 2013, emissions trading schemes are legislated to
commence in the US state of California, in the Canadian
province of Quebec. China aims to commence pilot
emissions trading schemes in seven provinces and cities.
· South Korea, Australia's fourth largest trading partner, has
also legislated an emission trading scheme which is set to
commence in 2015.
· Market-based emissions reduction policies are also under
consideration or development in Brazil, Chile, Columbia,
Costa Rica, Jordan, India, Indonesia, Mexico, Morocco,
South Africa, Thailand, Turkey, Ukraine, Vietnam and in the
Canadian provinces of British Columbia, Ontario and
Manitoba.
Under the linking arrangement, Australian liable entities may only use
eligible Kyoto units to meet 12.5 per cent of their total liability. This will
continue until at least 2020. Furthermore, the Government may, through
regulations, introduce additional or alternative quantitative limits on the
use of eligible international emissions units. This will provide the
Government the flexibility to respond to changing international
circumstances as needed.
However, the Government is conscious of the need to provide a stable
market and investment environment. It is committed to provide at least
three years' notice before new designated limits are introduced or changes
to existing designated limits are due to take effect.
Under the linked arrangement, the price floor will no longer operate in the
first three years of the flexible price period, thus facilitating the
8
General outline and financial impacts
convergence of the EU and Australian carbon prices. This will be
achieved by removing the requirement for a minimum auction reserve
price for the financial years 2015-16, 2016-17 and 2017-18 from the
CE Act, the CE (Unit Issue Charge-Auctions) Act, the CE (Charges-
Customs) Act, and the CE (Charges-Excise) Act, as well as removing the
requirement for a surrender charge on eligible international emissions
units by repealing the Clean Energy (International Unit Surrender
Charge) Act 2011.
In making these changes, it is also necessary to ensure that the equivalent
carbon price paid by users of liquid fuels and synthetic greenhouse gases
is more clearly reflective of the carbon price under the linking
arrangements. To this end, the application of an equivalent carbon price is
amended in the Fuel Tax Act, the Excise Tariff Act, the SGG (Import) Act
and the SGG (Manufacture) Act to introduce a new concept: the `per-
tonne carbon price equivalent'.
The Regulator will determine and publish the equivalent carbon price
within seven business days after the last day of each May and November
(starting in May 2015), subject to a requirement that the maximum
per-tonne carbon price equivalent is equal to the 6-monthly auction price.
Amendments to the ANREU Act ensure that linking can occur, even in
the event that it is not possible to implement a direct registry link between
the carbon pricing mechanism and an overseas emissions trading scheme.
Indirect linking may be given effect by the Government issuing AIIUs to
holders of an ANREU account, where these units are backed by foreign
emissions units. The Government has also been given powers to open and
operate an overseas registry account and to alter the way in which AIIUs
are managed in the ANREU as circumstances necessitate.
There are also technical amendments to enhance the auction scheme. The
limit on advance-auctioned carbon units is increased to 40 million units
for carbon units whose vintage is 2015-16 that are auctioned in 2013-14
and 20 million units for other advance auctions where there is no carbon
pollution cap number for that year. The final details of the auction
arrangements are determined by the legislative instrument under
section 113 of the CE Act which is expected to be made in early 2013
after further consultation with industry. The Government has decided that
there will no longer be auctions of relinquished carbon units. Instead, if a
carbon unit is relinquished, it is cancelled, and a new carbon unit will be
auctioned.
Minor and technical amendments to the CE Act and the NGER Act
provide the Minister with the power to determine methods to measure
amounts of designated fuels and methods to adjust liabilities relating to
potential greenhouse gas emissions. Minor amendments to the CE Act
also clarify the treatment of GST joint venture operators in the Opt-in
Scheme.
9
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Lastly, more flexibility is provided around how the supply and use of
natural gas is treated under the CE Act. These amendments help to
maintain competitive neutrality by supporting the complete coverage of
natural gas under the carbon pricing mechanism.
Date of effect:
Clean Energy Amendment (International Emissions Trading and Other
Measures) Bill 2012
Sections 1, 2 and 3 commence on the date the bill receives the Royal
Assent.
Schedule 1, Parts 1 and 3, which make general amendments to the
Australian National Registry of Emissions Units Act 2011 (ANREU Act)
and the CE Act, will commence on the day after the bill receives the
Royal Assent.
Schedule 1, Part 2, which makes amendments relating to fuel to the CE
Act and the NGER Act, will commence on 1 July 2013. The amendments
to the NGER Act made by this Part apply to reports relating to the
2012-13 financial year and all subsequent years.
Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Schedule 1 takes effect immediately after the commencement of Part 1 of
Schedule 1 to the Clean Energy Amendment (International Emissions
Trading and Other Measures) Act 2012.
All other sections of the bill take effect the day that Act receives the Royal
Assent.
Ozone Protection and Synthetic Greenhouse Gas (Import Levy)
Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Schedule 1 takes effect immediately after the commencement of Part 1 of
Schedule 1 to the Clean Energy Amendment (International Emissions
Trading and Other Measures) Act 2012.
All other sections of the bill take effect the day that Act receives the Royal
Assent.
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy)
Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Schedule 1 takes effect immediately after the commencement of Part 1 of
Schedule 1 to the Clean Energy Amendment (International Emissions
Trading and Other Measures) Act 2012.
All other sections of the bill take effect the day that Act receives the Royal
Assent.
10
General outline and financial impacts
Clean Energy (Charges--Excise) Amendment Bill 2012
Schedule 1 takes effect at the same time as Part 1 of Schedule 1 to the
Clean Energy Amendment (International Emissions Trading and Other
Measures) Act 2012.
The remainder of the bill takes effect the day that Act receives the Royal
Assent.
Clean Energy (Charges--Customs) Amendment Bill 2012
Schedule 1 takes effect at the same time as Part 1 of Schedule 1 to the
Clean Energy Amendment (International Emissions Trading and Other
Measures) Act 2012.
The remainder of the bill takes effect the day that Act receives the Royal
Assent.
Clean Energy (Unit Issue Charge-- Auctions) Amendment Bill 2012.
Schedule 1 takes effect at the same time as Part 1 of Schedule 1 to the
Clean Energy Amendment (International Emissions Trading and Other
Measures) Act 2012.
The remainder of the bill takes effect the day that Act receives the Royal
Assent.
Proposal announced:
The Acts which make up the Clean Energy Legislative Package passed the
Senate on 8 November 2011 and variously received the Royal Assent in
late November and early December 2011.
The measures in the Clean Energy Legislative Package are based on the
announcement on 10 July 2011 and the publication of Securing a clean
energy future: The Australian Government's climate change plan.
On 5 December 2011, the Government announced that it had agreed with
European Union Commissioner for Climate Action, Ms Connie
Hedegaard, terms of reference for discussions on linking the carbon
pricing mechanism and the EU ETS. At this time, the Minister for
Climate Change and Energy Efficiency, the Hon Greg Combet AM MP,
said that:
`Now that Australia's carbon price is the law, the Australian
Government will focus on linking our scheme to international carbon
markets and other emissions trading schemes.
11
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
`Expanding international carbon markets is good for the environment
and good for economic growth. It allows global emissions to be
reduced in the most cost-effective and efficient way.'2
On 28 August 2012, the Government announced arrangements to link the
carbon pricing mechanism to the EU ETS.
Those amendments which make minor and technical amendments concern
the operation of measures previously announced as part of the Clean
Energy Legislative Package and, therefore, have not been the subject of
any further specific announcements.
Financial impact:
These amendments are not anticipated to have a financial impact.
2
Minister for Climate Change and Energy Efficiency, Australia and Europe strengthen
collaboration on carbon markets, 5 December 2011. Available at:
http://www.climatechange.gov.au/en/minister/greg-combet/2012/media-
releases/March/mr20120329b.aspx
12
General outline and financial impacts
Summary of regulation impact statements
Interim partial link between the EU ETS and the Australian carbon pricing
mechanism
Impact:
The Regulation Impact Statement (RIS) for linking the carbon pricing
mechanism with the EU ETS is available at http://ris.finance.gov.au. The
RIS was prepared by DCCEE and has been assessed as adequate by the
Office of Best Practice Regulation.
Main points:
The introduction of a partial link between the EU ETS and the carbon
pricing mechanism will provide Australian liable entities with immediate
access to credible international units for compliance via the world's
largest carbon market for the first three years of the flexible price period.
Liable entities will also retain access to Kyoto units.
This arrangement will improve the overall stability and ongoing
credibility of the carbon pricing mechanism, as well as avoid potential
complexity associated with the implementation of price floor
arrangements. A link may also lower transaction costs for entities with
liabilities under both schemes. It will also support the development of
global carbon markets and ultimately, global action on climate change.
Recipients of assistance in the form of free permits, such as entities
receiving assistance under the Jobs and Competitiveness Program may
receive a higher effective rate of assistance due to price differentials
between carbon units and eligible Kyoto units.
On the other hand, the domestic carbon price will be affected by decisions
taken in Europe to support the price of European allowance units, while
for a small number of businesses the change in the treatment of
international units may create additional low-level administrative costs.
Further impacts of these arrangements on the domestic carbon price and
the cost of compliance will depend on prevailing market prices for Kyoto
units and European allowance units once the carbon pricing mechanism
commences its flexible price phase. Under the carbon price projections in
the 2012-13 Budget, drawn from the Strong Growth, Low Pollution
modelling report, there would be no impact on domestic carbon prices of
establishing a partial link to the EU ETS under these interim
arrangements. This is because the international carbon price is projected
to be above the price floor and because the projections assume a single
international unit price and do not distinguish between Kyoto unit and
European allowance unit prices.
If the market prices of Kyoto units and European allowance units differ,
with European allowance units trading at a premium to Kyoto units, the
13
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Australian domestic carbon price would be expected to equal the
prevailing European allowance unit price, as the proposed quantitative
sub-limit on the use of Kyoto units implies that some liable entities would
need to use European allowance units for compliance purposes. The
average cost of meeting a given domestic carbon liability would also be
less than the Australian carbon price because all liable entities would be
able to use lower cost Kyoto units for a portion of their liability, rather
than meeting their full liability through the surrender of carbon units and
European allowance units valued at the Australian carbon price.
On balance, the advantages of providing liable entities with access to
another secure source of international units, greater effective assistance to
recipients of free permits and reduced administrative complexity outweigh
these costs. Therefore, it was decided that the Government would
establish a partial link between the carbon pricing mechanism and the
EU ETS, including not implementing the price floor and introducing an
additional quantitative sub-limit on the use of eligible Kyoto units for
compliance with obligations under the carbon pricing mechanism. This
sub-limit percentage should be set such that some European allowance
units are used for compliance, while retaining access to Kyoto units.
Carbon Auction Schedule, frequency and collateral
Impact:
The Regulation Impact Statement (RIS) for auctions of carbon units will
be made available at http://ris.finance.gov.au. The RIS was prepared by
DCCEE and has been assessed as adequate by the Office of Best Practice
Regulation.
Main points:
From 1 July 2015 the carbon pricing mechanism will transition to an
emissions trading scheme and the carbon price will be set by the market
through auctions. The auctions will sell carbon units for a particular
`compliance year', most carbon units will be sold in their compliance
year, however some will be sold in advance of the compliance year, and
some after it. A carbon unit auction limit applies to the amount of units
from a compliance year that can be auctioned in an earlier year. It is
aimed at preventing over-allocation before the pollution cap is known for
a given compliance year.
The carbon unit auction limit will be increased from 15 million to
40 million for 2015-16 units auctioned in 2013-14, and 20 million for all
other advance auctions before a pollution cap is set. Increasing this limit
provides additional flexibility for the auctioning of units.
Increasing the carbon unit auction limit is not expected to have a financial
impact.
14
General outline and financial impacts
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary
Scrutiny) Act 2011.
Clean Energy Amendment (International Emissions Trading and Other
Measures) Bill 2012
Clean Energy (Charges-Excise) Amendment Bill 2012
Clean Energy (Charges-Customs) Amendment Bill 2012
Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Ozone Protection and Synthetic Greenhouse Gas (Import Levy)
Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy)
Amendment (Per-tonne Carbon Price Equivalent) Bill 2012
Clean Energy (Unit Issue Charge-Auctions) Amendment Bill 2012
These bills are compatible with the human rights and freedoms recognised
or declared in the international instruments listed in section 3 of the
Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the bills
These bills amend the Clean Energy Act 2011 (CE Act) to:
· give effect to the arrangement to link Australia's carbon
pricing mechanism and the European Union Emissions
Trading System (EU ETS) by removing the price floor for
carbon units and limiting the use of Kyoto units for
compliance purposes under the CE Act;
· provide for the calculation of an equivalent carbon price that
reflects liable entities' cost of compliance under a linking
arrangement;
· increase the limit on advance-auctioned carbon units;
· prevent units being issued at auction more than three years in
advance of their vintage year;
· change the treatment of relinquished carbon units;
· allow regulations to be made to determine how specific
circumstances relating to the supply and use of natural gas
are treated under the CE Act.
15
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
These bills amend the Australian National Registry of Emissions Units Act
2011 to:
· enable European allowance units to be held in the Australian
National Registry of Emissions Units (ANREU), and used
for compliance purposes under the CE Act;
· in the event that a direct link with a foreign emissions trading
scheme, including the EU ETS, is not possible, to enable the
Clean Energy Regulator to issue Australian-issued
international units (AIIUs) which correspond to foreign
emissions units withdrawn from circulation within the
relevant foreign registry, and which can be used for
compliance purposes under the CE Act.
These bills amend the Fuel Tax Act 2006, the Excise Tariff Act 1921, the
Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995
and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture
Levy) Act 1995 to:
· adjust the calculation of the equivalent carbon price to ensure
that it remains clearly equivalent to the effective carbon price
faced by liable entities under the carbon pricing mechanism.
These bills amend the National Greenhouse and Energy Reporting Act
2007 to:
· provide the Minister with the power to determine methods to
measure and adjust amounts of designated fuels for the
purpose of ascertaining potential greenhouse gas emissions.
These bills repeal the Clean Energy (International Unit Surrender
Charge) Act 2011, and amend the Clean Energy (Unit Issue Charge-
Auctions) Act 2011 to remove provisions associated with the price floor.
Human rights implications
The bills engage the right to privacy in four respects:
· The bills enable the making of regulations which could
require certain persons who receive natural gas to provide
personal information, in the form of an `own-use
notification', to the supplier of the gas. The personal
information would encompass information identifying the
person, information as to whether the person intends to
consume natural gas supplied to the person, and other
prescribed information. It is anticipated that notices would
ordinarily be given by bodies corporate, rather than
individuals. The notices are intended to enable identification
of the liable entity in relation to the supply of gas. This
purpose is both reasonable and consistent with the objectives
16
General outline and financial impacts
of the International Covenant on Civil and Political Rights
(ICCPR). A statement of compatibility with human rights,
including the right to privacy, would be prepared in relation
to any regulation made under this regulation-making power.
· The bills provide for the publication of information about any
relinquishment requirements that apply to a person in relation
to an AIIU, and any non-compliance with those
requirements, either on the Liable Entity Public Information
Database (LEPID) (if the person is a liable entity) or on the
Clean Energy Regulator's (the Regulator) website (if the
person is not). A court may order a person to relinquish
AIIUs if the person has been convicted of a dishonesty
offence and the court is satisfied that the issue of the units
was directly or indirectly attributable to the commission of
the offence. The provisions mirror existing provisions
around the publication of compliance information in relation
to carbon units, and are intended to promote transparency in
the operation of the carbon pricing mechanism and
confidence in its integrity. The nature of the information to
be published is precisely defined and the publication
requirement does not involve the exercise of any
discretionary powers. The publication of this information is
therefore considered reasonable and consistent with the
objectives of the ICCPR.
· The bills enable the making of regulations which could
require the Regulator to publish on the Regulator's website
information relating to the registered holder of prescribed
international units. The regulation-making power is intended
to promote transparency in the operation of any linking
arrangement with a foreign registry. A statement of
compatibility with human rights, including the right to
privacy, would be prepared in relation to any regulation made
under this regulation-making power.
· The bills also enable the making of regulations which could
require a person to notify a matter to the Regulator. This
could involve the disclosure of personal information to the
Regulator. Any information disclosed to the Regulator
would be subject to the secrecy provisions in Part 3 of the
Clean Energy Regulator Act 2011 and could only be
disclosed by the Regulator in the circumstances provided for
in that Part. A statement of compatibility with human rights,
including the right to privacy, would be prepared in relation
to any regulation made under this regulation-making power.
17
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Conclusion
The bills are compatible with human rights because to the extent that it
may limit human rights, those limits are reasonable, necessary and
proportionate.
Greg Combet
Minister for Climate Change and Energy Efficiency
18
Chapter 1 Amendments relating to
linking with overseas emissions trading
schemes
Outline of chapter
1.1 Chapter 1 describes the amendments necessary to facilitate the
linking of the carbon pricing mechanism with overseas emissions trading
schemes, including the following specific amendments:
· amendments to the ANREU Act to include European
allowance units as prescribed international units;
· amendments to the ANREU Act to provide flexibility to the
Government to link with emissions trading schemes where
direct linking of registries is not possible;
· amendments to the CE Act and associated acts to remove the
price floor and associated provisions;
· amendments to the CE Act to allow regulations to be made to
introduce one or more additional quantitative limits on a
liable entity's use of eligible international emissions units,
referred to as a designated limit;
· amendments to the CE Act to establish a 12.5 per cent
designated limit on the surrender of eligible Kyoto units;
· amendments to the CE Act to ensure the appropriate
interaction of designated limits, the existing 50 per cent
surrender limit on eligible international emissions units (now
referred to as the general limit) and over-surrender
provisions; and
· amendments to the CE Act, the Fuel Tax Act, the Excise
Tariff Act, the SGG (Import Levy) Act and the SGG
(Manufacture Levy) Act to adjust the calculation of the
equivalent carbon price to ensure that it remains clearly
equivalent to the effective carbon price faced by liable
entities under the carbon pricing mechanism.
Context of amendments
1.2 The CE Act allows eligible international emissions units to be
surrendered to meet liabilities under the carbon pricing mechanism after 1
July 2015. This ensures that Australian liable entities have access to
19
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
international abatement opportunities, lowering the economic cost of
meeting emissions targets.
1.3 Some units issued under the Kyoto Protocol have been defined as
eligible international emissions units and may be used to meet liabilities
after 1 July 2015. Under section 133 of the CE Act, these units are subject
to a surrender limit such that they can be used for no more than 50 per cent
of total liabilities in the first five years of the flexible price period (that is
from 1 July 2015 until 30 June 2020).
1.4 On 28 August 2012, the Government announced that it would link
the carbon pricing mechanism with the EU ETS. Under this arrangement,
European allowance units will be able to be used for compliance under the
carbon pricing mechanism.
1.5 The Government also agreed that it would remove the price floor
and restrict the quantity of eligible Kyoto units that liable entities can use to
discharge their carbon pricing liabilities. This additional restriction on the
use of Kyoto units, set at 12.5 per cent of an entity's liability, will operate
within the existing 50 per cent restriction on the use of eligible international
emissions units.
Summary of new law
Use of eligible international emissions units for compliance under the
carbon pricing mechanism
1.6 A `European allowance unit' is defined as a prescribed
international unit under section 4 of the ANREU Act. This means
European allowance units may be surrendered to discharge liabilities under
the carbon pricing mechanism from the 2015-16 financial year.
1.7 A legislative power to impose one or more designated limits on
eligible international emissions units is provided under section 123A of the
CE Act. A designated limit constrains the number of eligible international
emissions units of a certain class or classes of unit that a liable entity can
surrender in relation to a given financial year. The Government is very
conscious of the need for a stable market and investment environment going
forward. The Government is committed to providing at least three years'
notice before introducing new or modifying existing designated limits.
However, only one year's notice may be given if a designated limit is
necessary to facilitate the linking of Australia's emissions trading scheme
with another emissions trading scheme, as these links are anticipated to be
beneficial in nature.
1.8 A designated limit on the use of eligible Kyoto units of
12.5 per cent of liability will apply from 1 July 2015, the first year that
international units can be surrendered. Regulations may broaden the
application of this limit to apply to additional classes of eligible
20
Chapter 1: Amendments relating to the surrender of international units
international emissions units, known as `listed units',with the exception of
European allowance units or AIIUs issued in relation to European
allowance units. From the 2020-21 financial year the designated limit
percentage for this limit may be changed by regulations.
1.9 For the financial years from 2015-16 to 2019-20 inclusive,
designated limits will act as supplementary limits to the existing 50 per cent
limit on the surrender of eligible international emissions units, which is now
known as the `general limit'.
1.10 The 50 per cent general limit on the surrender of eligible
international emissions units will still expire on 30 June 2020.
1.11 Eligible international emissions units surrendered in excess of an
applicable designated limit or the general limit in a given financial year are
treated as having been surrendered for the next financial year.
Registry amendments to facilitate linking
1.12 The ANREU Act is amended to allow for linking to international
carbon markets where a direct (registry-to-registry) link is not possible.
1.13 A new class of prescribed international unit known as AIIUs is
created under Part 4 of the ANREU Act. Regulations will stipulate the
process for issuing AIIUs and may alter transfer provisions relating to these
units.
1.14 Amendments provide for the cancellation and relinquishment of
AIIUs.
Removal of the price floor
1.15 The price floor will not be implemented, and the requirement for a
minimum auction reserve price for the financial years 2015-16, 2016-17,
and 2017-18 is removed from the CE Act and related Acts.
1.16 The requirement for a surrender charge on eligible international
emissions units has also been removed and the Clean Energy (International
Unit Surrender Charge) Act 2011 is repealed.
1.17 The Minister may still determine an auction `reserve charge
amount' to enhance price discovery at auctions.
Equivalent carbon pricing for liquid fuels and synthetic greenhouse
gases
1.18 The CE Act, the Fuel Tax Act, the Excise Tariff Act, the SGG
(Import Levy) Act and the SGG (Manufacture Levy) Act collectively
ensure that the equivalent carbon price applied to liquid fuels and synthetic
greenhouse gases reflects the cost of compliance faced by liable entities
under the carbon pricing mechanism. The amendments mean that the
21
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
equivalent carbon price reflects the impact of quantitative limits on the
surrender of eligible international units.
1.19 The Regulator will publish auction results for the 11 months
ending 31 May 2015. This ensures that, if no auctions take place in the six
months prior to May 2015, then the average auction unit carbon price can
be calculated.
Comparison of key features of new law and current law
New Law Current Law
Use of eligible international units for compliance under the carbon pricing mechanism
European allowance units can be surrendered European allowance units are not eligible for
to discharge liabilities under the carbon use in the carbon pricing mechanism. Other
pricing mechanism from 2015-16. A than a 50 per cent limit on the surrender of
designated limit on the use of eligible Kyoto eligible international units, no additional
units of 12.5 per cent of liability will also limits will apply from 2015-16.
apply from 2015-16. Regulations may
broaden the application of this limit to apply
to additional classes of eligible international
emissions units, known as `listed units',with
the exception of European allowance units or
AIIUs issued in relation to European
allowance units. From the 2020-21 financial
year the designated limit percentage for this
limit may be changed by regulations
The Government will have the power to apply
additional designated limits on the use of
eligible international emissions units. From
2015-16 to 2019-20, designated limits will
operate within the existing 50 per cent limit on
the surrender of eligible international
emissions units (the general limit).
Units surrendered in excess of designated or
general limits will be treated as having been
surrendered in the following financial year.
Registry amendments to facilitate linking
The ANREU Act allows for linking to The Registry only provides for the direct
international carbon markets where a direct (registry-to-registry) linking of emissions
(registry-to-registry) link is not possible. trading schemes.
A new class of prescribed international unit
known as AIIUs is created under Part 4 of the
ANREU Act. Regulations will stipulate the
process for issuing AIIUs and may alter
22
Chapter 1: Amendments relating to the surrender of international units
New Law Current Law
transfer provisions relating to these units.
Provision is made for the cancellation and
relinquishment of AIIUs.
Removal of the price floor
The price floor will not be implemented. If an eligible international emissions unit is
No charge imposed on the surrender of surrendered in relation to 2015-16, 2016-17 or
eligible international emissions units. 2017-18, a charge is imposed by the Clean
Energy (International Unit Surrender Charge)
Act 2011.
No minimum auction reserve charge. Minimum auction reserve charges of $15 for
2015-16; $16 for 2016-17; and $17.05 and for
2017-18 are specified in legislation and apply
if regulations are in force for determining the
surrender charge on international units.
Equivalent carbon pricing for liquid fuels and synthetic greenhouse gases
The equivalent carbon price applied to liquid There is no provision for an equivalent carbon
fuels and synthetic greenhouse gases will price that reflects the impact of quantitative
reflect the impact of quantitative limits on the limits on the surrender of eligible international
surrender of eligible international units. This units.
will align it with the cost of compliance faced
by liable entities under the carbon pricing
mechanism.
Detailed explanation of new law
Preliminaries
1.20 The bill, once enacted, will be called the `Clean Energy
Amendment (International Emissions Trading and Other Measures) Act
2012'. [Clause 1, Clean Energy Amendment (International Emissions Trading and
Other Measures) Bill 2012]
1.21 The bills in the amendment bills package amend other legislation,
namely the CE Act, the ANREU Act, the NGER Act, the CE (Charges-
Excise) Act, the CE (Charges-Customs) Act, the Fuel Tax Act, the Excise
Tariff Act, the SGG (Import Levy) Act the SGG (Manufacture Levy) Act
and the CE (Unit Issue Charge - Auctions) Act, and do not contain any
substantive provisions of their own. The bill repeals the Clean Energy
(International Unit Surrender Charge) Act 2011. [Clause 3, Clean Energy
Amendment (International Emissions Trading and Other Measures) Bill 2012] [Clause 3,
Clean Energy (Charges-Excise) Amendment Bill 2012] [Clause 3, Clean Energy
(Charges-Customs) Amendment Bill 2012] [Clause 3, Excise Tariff Amendment (Per-
tonne Carbon Price Equivalent) Bill 2012] [Clause 3, The Ozone Protection and
Synthetic Greenhouse Gas (Import Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012] [Clause 3, The Ozone Protection and Synthetic Greenhouse Gas
23
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
(Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012] [Clause
3, The Clean Energy (Unit Issue Charge-Auctions) Amendment Bill 2012]
1.22 Sections 1, 2 and 3 of the bill commence on the date the bill
receives the Royal Assent. Schedule 1, Parts 1 and 3, which make general
amendments to the Australian National Registry of Emissions Units Act
2011 (ANREU Act) and the CE Act, will commence on the day after the
bill receives the Royal Assent. [Clause 2, Clean Energy Amendment (International
Emissions Trading and Other Measures) Bill 2012]
1.23 Schedule 1 of all other bills in the amendment bills package take
effect at the same time as Part 1 of Schedule 1 to the Clean Energy
Amendment (International Emissions Trading and Other Measures) Act
2012. The remainder of these bills take effect the day the relevant Acts
receive the Royal Assent. [Clause 2, Clean Energy (Charges-Excise) Amendment
Bill 2012] [Clause 2, Clean Energy (Charges-Customs) Amendment Bill 2012] [Clause 2,
The Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012] [Clause 2,
The Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment (Per-
tonne Carbon Price Equivalent) Bill 2012] [Clause 2, The Ozone Protection and
Synthetic Greenhouse Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012] [Clause 2, The Clean Energy (Unit Issue Charge-Auctions)
Amendment Bill 2012]
1.24 The Clean Energy (Charges-Excise) Amendment Bill 2012 once
enacted, will be called the `Clean Energy (Charges-Excise) Amendment
Act 2012'. [Clause 1, Clean Energy (Charges-Excise) Amendment Bill 2012]
1.25 The Clean Energy (Charges-Customs) Amendment Bill 2012 once
enacted, will be called the `Clean Energy (Charges-Customs) Amendment
Act 2012'. [Clause 1, Clean Energy (Charges-Customs) Amendment Bill 2012]
1.26 The Excise Tariff Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012 once enacted, will be called the `Excise Tariff
Amendment (Per-tonne Carbon Price Equivalent) Act 2012'. [Clause 1, The
Excise Tariff Amendment (Per-tonne Carbon Price Equivalent) Bill 2012]
1.27 The Ozone Protection and Synthetic Greenhouse Gas (Import
Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012 once
enacted, will be called the `Ozone Protection and Synthetic Greenhouse Gas
(Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Act 2012'.
[Clause 1, The Ozone Protection and Synthetic Greenhouse Gas (Import Levy)
Amendment (Per-tonne Carbon Price Equivalent) Bill 2012]
1.28 The Ozone Protection and Synthetic Greenhouse Gas
(Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012 once enacted, will be called the `Ozone Protection and Synthetic
Greenhouse Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Act 2012'. [Clause 1, The Ozone Protection and Synthetic Greenhouse
Gas (Manufacture Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill 2012]
1.29 The Clean Energy (Unit Issue Charge-Auctions) Amendment Bill
2012 once enacted, will be called the `Clean Energy (Unit Issue Charge-
24
Chapter 1: Amendments relating to the surrender of international units
Auctions) Amendment Act 2012'. [Clause 1, The Clean Energy (Unit Issue
Charge-Auctions) Amendment Bill 2012]
Use of eligible international emissions units for compliance under the
carbon pricing mechanism
European allowance units as prescribed international units
1.30 A `European allowance unit' is defined as an allowance that is
issued by, or under the authority of, a country implementing the European
Union Greenhouse Gas Emission Allowance Trading Directive (the
EU Directive) as amended [Item 5, section 4, ANREU Act] [Item 33A, section 5, CE
Act]. The Directive is numbered 2003/87/EC and was made by the
European Parliament and the Council of the European Union on
13 October 2003. [Item 6, section 4, ANREU Act] It establishes a scheme for
greenhouse gas emission allowance trading within the European Union.3
Each European Union member state implements the EU Directive through
its respective national laws. The other states participating in the EU ETS,
which at present include Iceland, Liechtenstein and Norway, have also
implemented the EU Directive through their own laws.4
1.31 The definition of `European allowance unit' includes all units
issued under the EU Directive, except those issued for aviation activities as
set out in Annex 1 of the EU Directive. European aviation allowances are a
subclass of European allowance units that can currently only be used for
compliance by aircraft operators that have a liability under the EU ETS. As
this class of units is not intended to be eligible for surrender in the carbon
pricing mechanism, they have been explicitly excluded from the definition.
[Item 5, section 4, ANREU Act]
1.32 European allowance units are included in the definition of
`prescribed international unit' in section 4 of the ANREU Act. [Item 12,
section 4, ANREU Act] [Item 13, section 4, ANREU Act] This means that existing
provisions for prescribed international units under Part 4 of the
ANREU Act apply to European allowance units. Section 122 of the CE Act
provides for eligible international emissions units (which includes European
allowance units as a prescribed international unit) to be surrendered for
compliance under the carbon pricing mechanism from the 2015-16 financial
year.
1.33 Provision has been made to enable the linking of emissions
trading schemes, including to the EU ETS, in cases where direct (registry-
to-registry) linking is not possible. Specifically this will occur through the
3
The EU Directive is available here:
http://europa.eu/legislation_summaries/energy/european_energy_policy/l28012_en.htm
4
With respect to the EU Directiv, the European Commission publishes details of relevant
implementing legislation of EU member states, which are available here:
http://eur-lex.europa.eu/LexUriServ/LexUriServ.do?uri=CELEX:72009L0029:EN:NOT
25
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
issuance of AIIUs in relation to given international units where certain
criteria have been met. These amendments are discussed in paragraphs 1.60
to 1.114 below.
Surrender limits on eligible international emissions units
1.34 A surrender limit on eligible international emissions units was
included in section 123 of the CE Act, to safeguard the environmental
integrity of Australia`s pollution reduction efforts. As part of the
arrangement to link the carbon pricing mechanism to the EU ETS, the
Government agreed to introduce an additional limit on the use of eligible
Kyoto units. A 12.5 per cent limit on Kyoto units will give effect to this
arrangement and facilitates the convergence of the price of European
allowance units and Australian carbon units. [Item 69, section 123A, CE Act]
`Kyoto unit' is defined to have the same meaning as under the ANREU Act.
[Item 34, section 5, CE Act]
1.35 The `general limit' maintains the existing 50 per cent surrender
limit on eligible international emissions units, operating from financial year
2015-16 to 2019-20. The term `general limit' is used rather than `surrender
limit' as multiple limits on the surrender of eligible international emissions
units may apply. [Item 71, subsection 133(7E), CE Act]
1.36 A `designated limit' constrains the number of eligible
international emissions units of a certain class or classes that a liable entity
can surrender in a given financial year. This designated limit is set as a
percentage of a liable entity's annual liability; this is known as the
`designated limit percentage'. [Item 32, section 5, CE Act] [Item 33, section 5, CE
Act] [Item 69, section 123A, CE Act]
Example 1.1 Designated limit
Under a designated limit percentage of 10 per cent, a liable entity with
an annual liability of 100 units may only use 10 units of the unit class
covered by the designated limit.
1.37 The Government may, by regulations, introduce one or more
designated limits on eligible international emissions units other than Kyoto
units. Each designated limit is to be identified in the regulations by a
unique name to enable the application of ranking provisions regarding the
application of designated limits as set out in the amended section 133 of the
CE Act. [Item 69, subsection 123A(2), CE Act] [Item 71, subsection 133(7C), CE Act]
The setting of designated limits through regulations reflects the requirement
for flexibility in both setting and changing limits over time, reflecting the
maturation of Australia's emissions trading arrangements, the enhancement
of existing links with overseas emissions trading schemes and the
development of new links and international emissions trading systems. All
regulations made concerning designated limits are disallowable legislative
instruments for the purposes of the Legislative Instruments Act 2003 to
ensure appropriate parliamentary oversight of changes to market access to
units.
26
Chapter 1: Amendments relating to the surrender of international units
1.38 Designated limits may only apply from the start of the flexible
price period, that is, the 2015-16 financial year, which is the first year that
international units can be surrendered. [Item 69, subsection 123A(3), CE Act]
1.39 The regulations for each designated limit will specify the years in
which it is to apply. However, in accordance with the notice provisions, a
limit can come into effect no earlier than one to three financial years after
the the year in which the relevant regulation is registered. [Item 69,
subsections 123A(1)-123A(5), CE Act] A designated limit may apply for a limited
number of financial years (for example, the financial years 2015-16, 2016-
17 and 2017-18) or indefinitely (for example, the financial year 2015-16
and each later financial year). [Item 69, subsection 123A(1), CE Act]
1.40 The ability to set or amend designated limits on classes of eligible
international emissions units provides the Government with flexibility to
respond to changing international circumstances and is designed to facilitate
future linking with other emissions trading schemes. For example, the
Government may wish to have designated limits sunset in line with an
international agreement taking effect or change designated limits to enable
links with prospective schemes in the United States of America or the
People's Republic of China. The Government is also very conscious of the
need for a stable market and investment environment. The Government is
committed to provide at least three years' notice before new designated
limits are introduced or changes to existing designated limits are due to take
effect. If it is necessary to facilitate linking with another emissions trading
scheme, then the Government will provide at least one year's notice. The
notice period is shorter in this case because providing access to additional
unit types is anticipated to benefit liable entities and support Australia's
international climate change objectives. [Item 69, subsection 123A(4), CE Act]
[Item 69, subsection 123A(5), CE Act]
1.41 When setting designated limits on the surrender of eligible
international emissions units, the Minister may consider the following
matters: [Item 69, subsection 123A(11), CE Act]
· Australia's international objectives and obligations, so as to
ensure that limits are consistent with the efficient and
credible operation of international carbon markets;
· the environmental integrity of the carbon pricing mechanism;
· whether the units are accepted by either the European Union
or New Zealand emissions trading schemes;
· the extent to which the regulations would facilitate linking of
the scheme embodied in the CE Act and the associated
provisions with other emissions trading schemes; and
· such other matters as the Minister considers relevant.
27
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
1.42 These considerations mirror the considerations that the Minister
may consider when setting qualitative limits on international units under the
current subsection 123(2) of the CE Act. However, these criteria are
amended such that the Minister now must consider the expert
recommendations of the Climate Change Authority when recommending a
qualitative restriction or a designated limit. [Item 67A, subsection 123(1A), CE
Act] [Item 67B, subsection 123(2), CE Act] [Item 69, subsection 123A(10), CE Act] The
Climate Change Authority must take into account the principles in
section 12 of the Climate Change Authority Act 2011 in providing this
advice and is expected to address the substantive issues involved in a
particular restriction such as the relevant considerations listed above. This
confirms the key role that the Climate Change Authority is expected to play
concerning the environmental integrity of international units accepted into
Australia's emissions trading scheme.
1.43 The Minister may also take into account an additional
consideration, which is added to both new section 123A(11) of the CE Act
concerning designated limits and the existing section 123(2) of the CE Act
concerning qualitative restrictions, to the effect that the Minister may
consider whether a qualitative limit or a designated limit facilitates linking.
This consideration draws the Minister's attention to the importance of
ensuring that any regulations setting quantitative and qualitative limits
would, for example, take account of the Government's link between the
carbon pricing mechanism and the EU ETS, or such other emissions trading
schemes as it may link with in the future. [Item 69, subsection 123A(11) CE Act]
[Item 68, subsection 123(2) CE Act]
1.44 In considering relevant matters, the Minister could consider the
need for any particular transitional arrangements. However, as international
units can be sold into other markets or banked for future use, the notice
period should be sufficient to avoid the need for additional transitional
arrangements.
1.45 The 12.5 per cent designated limit on Kyoto units is established in
legislation through the `listed unit designated limit'. This provides clarity
and certainty about the designated limit for eligible Kyoto units. This
designated limit percentage cannot be changed until the 2020-21 financial
year. This encourages a stable investment environment as it ensures, until
2020, that liable entities use of Kyoto units will not be further restricted
through designated limits. From the 2020-21 financial year regulations may
change the designated limit percentage for the listed unit designated limit.
[Item 69, section 123A, CE Act]
Example 1.2 Limits on eligible Kyoto units
A liable entity with a liability of 1,000 units could surrender up to
125 eligible Kyoto units in a given compliance year.
1.46 Regulations may broaden the application of this listed unit
designated limit such that it applies to additional classes of eligible
28
Chapter 1: Amendments relating to the surrender of international units
international emissions units, with the exception of European allowance
units or AIIUs issued in relation to European allowance units. [Item 69,
subsection 123A(8), CE Act] [Item 69, subsection 123A(9), CE Act]
Excess surrender provisions
1.47 In some circumstances a liable entity may surrender too many
units when meeting its liability for a given financial year under the carbon
pricing mechanism. When this occurs, there will be rules setting out the
treatment of units that are surrendered in excess of a designated limit and/or
the general limit on the surrender of eligible international emissions units.
1.48 The excess surrender provisions are expected to apply only rarely,
as it is not in a liable entity's interest to surrender units in excess of the
relevant surrender limit. If a liable entity surrenders units in excess of a
limit, it will lose control of the use to which these units will be put. For this
reason, liable entities would reasonably not be expected to surrender units
in excess of surrender limits. In addition, liable entities are unlikely to
surrender units in advance of knowing their emissions number for a given
financial year.
1.49 When a liable entity surrenders eligible international emissions
units for a given financial year, these units will be tested to see if there is an
`unacceptable designated limit situation' and/or an `unacceptable general
limit situation'. These limits are to be applied consecutively, with all
designated limits to be applied before the general limit is applied. [Item 71,
subsection 133(7B), CE Act] [Item 71, subsection 133(7D), CE Act]
1.50 An unacceptable general limit situation applies when an entity
surrenders more units than is allowed by the general limit, that is, a liable
entity surrenders eligible international emissions units for more than
50 per cent of its liability. [Item 71, subsection 133(7E), CE Act] Similarly, an
unacceptable designated limit situation applies when an entity surrenders
units in excess of that allowed by a given designated limit, for example if an
entity surrenders Kyoto units for more than 12.5 per cent of its liability.
[Item 71, subsection 133(7F), CE Act]
1.51 If an unacceptable designated limit situation applies, and/or if an
unacceptable general limit situation applies, those units covered by the
applicable situation (that is, those units in excess of the limit) are treated as
having not been surrendered in the current eligible financial year and as
having been surrendered for liabilities in the next eligible financial year.
[Item 71, subsection 133(7), CE Act] [Item 71, subsection 133(7A), CE Act]
Example 1.3 Unacceptable general limit situation
If, in December 2016, a liable entity with a carbon pricing liability of
100 units for 2015-16 surrenders 60 eligible international emissions
units for 2015-16, then 10 of these units are covered by the
unacceptable general limit situation. These units will be treated as
having not been surrendered in 2015-16 and as having been
surrendered for the liable entity's liability in 2016-17.
29
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
1.52 Units must be ordered to determine which units are covered by an
unacceptable designated limit situation or an unacceptable general limit
situation. Units subject to a particular limit will be ordered according to the
time at which they were surrendered. The most recently surrendered unit
will be ranked first, while the next most recently surrendered will be ranked
second and so on. Those units that have a ranking that is less than or equal
to the number of units that were surrendered in excess of a given limit are
those units that will be covered by the relevant unacceptable designated
limit situation or unacceptable general limit situation. [Item 71, subsection
133(7E)(e), CE Act] [Item 71, subsection 133(7F)(f), CE Act]
Example 1.4 Ranking of units under an unacceptable situation
If an entity surrenders a total of three units - one ERU on 1 December,
one CER on 2 December and one EUA on 3 December, for the
purposes of applying the general limit, then the EUA would be ranked
first, the CER ranked second and the ERU ranked third.
1.53 To enable the ranking of units when more than one unit is
surrendered in a single transaction, the Minister may, through a
disallowable determination, state the order in which units surrendered in a
single transfer are ranked for the purposes of applying a surrender limit.
[Item 71, subsection 133(7G)(a), CE Act] For example, this may be used to ensure
that firms receive the most advantageous treatment by ensuring that lower
cost unit types are treated as having been surrendered before higher cost
units.
1.54 If a determination is not in force, then units surrendered in a
single transaction will be treated as having been surrendered in the
numerical order of their serial numbers, disregarding any alphabetical
characters included in those serial numbers. [Item 71, subsection 133(7G)(b), CE
Act]
Example 1.5 Simultaneous surrender
The Regulator will treat a unit with the serial number ABC123 as
having been surrendered before a unit with the serial number ABC124.
Similarly, the Regulator will treat a unit with the serial number
XYZ234 as having been surrendered before a unit with the serial
number ABC456 or a unit with serial number 12345.
1.55 Surrender limits are to be applied consecutively, with all
designated limits to be applied before the general limit is applied. [Item 71,
subsection 133(7D), CE Act]
1.56 As more than one designated limit may apply at a given time,
eligible international emissions units may be subject to more than one
unacceptable designated limit situation. In this case, designated limits will
be applied consecutively in an order determined by a legislative instrument
made by the Minister. This will be a disallowable legislative instrument for
the purposes of the Legislative Instruments Act 2003. The order of
application of designated limits can influence which units are treated as
30
Chapter 1: Amendments relating to the surrender of international units
excess surrendered. By providing the Minister the power to determine the
order in which designated limits are applied, the Minister may apply them
in an order that minimises the number of units considered excess
surrendered or to ensure that the surrender of lower cost international units
is maximised. [Item 71, subsection 133(7B), CE Act]
1.57 If a legislative instrument is not in force, because it has not been
made or has been disallowed, designated limits will be applied
consecutively beginning with the designated limit that has the smallest
designated limit percentage. [Item 71, subsection 133(7B)(b), CE Act]
Example 1.6 Consecutive application of designated limits by size
If eligible international emissions units are subject to designated
limit A of 15 per cent and designated limit B of 10 per cent, then
designated limit B will be applied before designated limit A.
1.58 If there are two or more designated limits that apply, and those
limits have the same designated limit percentage, then the limits will be
applied consecutively based on the alphabetical order of the unique names
of the limits. [Item 71, subsection 133(7C), CE Act]
Example 1.7 Consecutive application of alphabetically ordered
designated limits
If eligible international emissions units are subject to designated
limit B of 10 per cent and designated limit A of 10 per cent, then
designated limit A will be applied before designated limit B.
1.59 Units found to be in an unacceptable designated limit situation are
treated as if they were surrendered for the next eligible financial year. As
limits are applied consecutively, units found to be in an unacceptable
designated limit situation regarding one designated limit are not ranked for
the purposes of applying subsequent designated limits or the general limit.
[Item 71, subsection 133(7D), CE Act] [Item 71, subsection 133(7E), CE Act] [Item 71,
subsection 133(7F), CE Act]
Example 1.8 Treatment of units covered by a designated limit
Take the case where there are three designated limits, designated limit
A applies a 10 per cent limit to Reforestation units, designated limit B
applies a 10 per cent limit to Afforestation units. Both Reforestation
units and Afforestation units belong to the International land sector
units class, which is subject to designated limit C of 15 per cent. Note
that the 50 per cent general limit also applies.
Assume an entity has a liability of 100 units for the 2015-16 financial
year and it surrenders 15 Afforestation units on 1 December 2016, 30
European allowance units on 2 December 2016 and 15 Reforestation
units on 3 December 2016. In this case designated limits A, B and C
all apply. Ranking these limits in order from lowest to highest
percentage, this means that designated limits A and B apply before
designated limit C. As designated limits A and B have the same
31
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
designated limit percentage, these limits are ranked in alphabetical
order, meaning that designated limit A will be applied first.
Applying designated limit A, 5 Reforestation Units will be treated as
not having been surrendered in relation to the 2015-16 financial year,
but will be treated as having been surrendered in the 2016-17 financial
year. Applying designated limit B, 5 Afforestation units will be treated
as not having been surrendered in relation to the 2015-16 financial
year, but will be treated as having been surrendered in the 2016-17
financial year. Applying designated limit C, 5 additional Reforestation
units will be treated as not having been surrendered in relation to the
2015-16 financial year, but will rather be treated as having been
surrendered in the 2016-17 financial year. As the Reforestation units
were surrendered after the Afforestation units they are the unit captured
by the unacceptable designated limit situation regarding designated
limit C.
Further note that in this example, the unacceptable general limit
situation does not apply, as after the application of designated limits A,
B and C, only 45 eligible international emissions units are treated as
having been surrendered for the 2015-16 financial year (10
Afforestation units, 5 Reforestation units and 30 European allowance
units).
Registry amendments to facilitate indirect linking of emissions trading
schemes
Supporting the development of international emissions trading
1.60 Generally, the Government will seek to implement direct linking
between the carbon pricing mechanism and overseas emissions trading
schemes by means of a direct link between their respective registries. This
would enable the direct transfer of units from one registry to another,
subject to appropriate safeguards.
1.61 In some circumstances, direct linking may not be possible, either
temporarily or permanently, as a consequence of specific issues such as
potential delays in changing relevant legislation or due to the design of the
electronic registries in which the emissions units are held. The ANREU
Act provides a framework for linking when the direct linking of registries is
not possible. This includes provisions for the Regulator to open and operate
a foreign registry account on behalf of the Commonwealth and provisions
for the issuance and transfer of AIIUs. By providing the Government
powers to alter arrangements through disallowable legislative instruments,
the Government has the necessary capacity to implement specific
arrangements to facilitate linking with other overseas emissions trading
schemes and provide for the specific operating requirements of those future
linking arrangements. In most cases, these arrangements will be of a highly
technical nature, reflecting the practicalities of linking the Registry with
other registries and specific issues concerning the acceptance of
international emissions units. These regulations will be the subject of
32
Chapter 1: Amendments relating to the surrender of international units
Parliamentary oversight as they will be legislative instruments for the
purposes of the Legislative Instruments Act 2003 and the subject of
disallowance.
1.62 These powers enable the Government to give effect to
international agreements or arrangements for linking. An `international
arrangement' is defined in section 4 of the ANREU Act as an arrangement
between Australia and a foreign government body or an international
organisation. [Item 8, section 4, ANREU Act] An `international organisation' is
defined in section 4 of the ANREU Act to cover international organisations
such as the European Union and its constituent bodies, such as the
European Commission, and other international entities that are not
sovereign states, but which may operate emissions trading schemes. [Item 9,
section 4, ANREU Act]
Opening and operating Commonwealth foreign accounts
1.63 The Commonwealth may open and operate an account in a foreign
registry, known as a `Commonwealth foreign registry account'. [Item 3,
section 4, ANREU Act] [Item 27, subsection 86A(1)(a), 86A(2), ANREU Act] This
power allows the Regulator, acting on behalf of the Commonwealth, to
operate an account in a foreign registry that may be required to facilitate a
link (for example, to hold or transfer foreign units).
1.64 The Minister may, through a disallowable legislative instrument,
direct the Regulator to open and operate a Commonwealth foreign registry
account on behalf of the Commonwealth. [Item 27, subsection 86A(4)] The
power of the Regulator to apply to open an account in a foreign registry and
then operate that account must only be exercised in accordance with a
ministerial direction, which is appropriate for the operation of a foreign
registry account in the name of the Commonwealth [Item 27, subsections
86A(4), 86A(5), ANREU Act]. As the Commonwealth foreign registry account
will operate under the rules of a foreign registry, any legislative instrument
will be consistent with the relevant rules of the foreign registry.
1.65 The administrator of the foreign registry will ultimately determine
whether the Commonwealth may open and operate an account in the
foreign registry, having regard to the rules and requirements applicable to
its own registry.
1.66 In addition to opening and operating a foreign registry account,
the Commonwealth may do anything incidental to, or ancillary to, the
opening or operation of such an account [Item 27, subsection 86A(1)(b), ANREU
Act]. This recognises that the Government may need to perform operations,
in addition to opening and operating a foreign registry account, in order to
facilitate a link. For example, this may allow the Commonwealth to open
and operate a trading platform on a foreign registry to obtain transaction
data to support linking arrangements.
33
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Issuance of AIIUs
1.67 Part 4 of the ANREU Act sets out the rules in relation to dealings
with prescribed international units. Amendments will divide Part 4 of the
ANREU Act into three Divisions so as to include provisions about the issue
of AIIUs. [Item 16, section 48, ANREU Act] [Item 17, section 48, ANREU Act] [Item
18, section 48, ANREU Act]
1.68 The Regulator may issue AIIUs on behalf of the Commonwealth.
[Item 18, section 48A, ANREU Act] [Item 10, section 4, ANREU Act] [Item 2, section 4,
ANREU Act] [Item 29A, section 5, CE Act] Amendments include AIIUs in the
definition of prescribed international units under section 4 of the ANREU
Act. [Item 12, section 4, ANREU Act] [Item 13, section 4, ANREU Act] This means
that AIIUs can be surrendered for compliance under the carbon pricing
mechanism. It also triggers the application of Part 4 of the ANREU Act
which contains general provisions relating to prescribed international units.
1.69 The issuance process for AIIUs is similar to the process for
issuing carbon units, set out in Part 4, Division 2 of the CE Act. To hold an
AIIU, a person must have a Registry account. [Item 18, subsection 48C(3),
ANREU Act] The Regulator will issue an AIIU by making an entry for the
unit in an account in the Registry. [Item 18, subsection 48C(1), ANREU Act] Each
AIIU will have a unique identification number known as the `serial
number'. [Item 18, section 48B, ANREU Act] [Item 18, subsection 48C(2), ANREU
Act)]
1.70 Consistent with the treatment of other types of emissions units
issued under Australian law, AIIUs will be treated as personal property both
generally and for the purposes of certain Australian laws including the
bankruptcy law, corporations law, laws relating to deceased estates and for
other laws as prescribed. If the transfer of AIIUs is permitted, the
protection to good faith purchasers would be afforded to the purchasers of
AIIUs.
1.71 The Regulator must not issue an AIIU unless conditions set out in
regulations are satisfied. [Item 18, subsection 48D(1), ANREU Act] Conditions
on the issuance of AIIUs must give effect to the principle that an AIIU must
not be issued unless a corresponding foreign emissions unit has been
withdrawn from circulation within a foreign registry. [Item 18, subsection
48D(2), ANREU Act] A corresponding foreign emissions unit means a unit
(however described) that is issued outside Australia. This could include a
European allowance unit. [Item 18, subsection 48D(3), ANREU Act] To ensure
appropriate parliamentary oversight, these regulations are disallowable.
1.72 It is intended that the Australian income tax treatment of any
AIIUs that are issued in accordance with Regulations made under new
section 48D of the ANREU Act will be consistent with the income tax
treatment applying to similar transactions involving other eligible
international emissions units.
34
Chapter 1: Amendments relating to the surrender of international units
1.73 The issuance provisions establish a principle based framework to
guide the development of indirect linking arrangements while maintaining
appropriate capacity to implement the highly technical aspects of linking
arrangements. For example, the regulations could provide that an AIIU
must be issued if a European allowance unit has been transferred to, and is
held within, a Commonwealth foreign registry account. The regulations
could also provide for the issue of an AIIU to a person if that person has
cancelled a European allowance unit for a purpose other than meeting
requirements under the EU Directive.
1.74 To ensure that appropriate provision is made for the issue of
AIIUs under the requirements of a potentially wide range of future linking
arrangements, the regulations may make further provision concerning
AIIUs, including requiring a person to notify the Regulator about a
prescribed matter. [Item 18, subsection 48E(2), ANREU Act] If a person does not
comply with a requirement specified in the regulations, then that person, or
a person who aids or abets in such non-compliance, may be liable to a civil
penalty. [Item 18, subsection 48E(2), ANREU Act] These regulations are
legislative instruments for the purposes of the Legislative Instruments Act
2003 and may be disallowed.
Transfer of AIIUs
1.75 Provisions giving effect to transfers of prescribed international
units are set out in new Division 3 of Part 4 of the ANREU Act.
1.76 The Government may, by regulations, modify the provisions of
new Division 3 of Part 4 of the ANREU Act in relation to a specified class
of AIIUs. [Item 19, section 57, ANREU Act] [Item 20, section 57, ANREU Act]
1.77 If regulations do not specify particular arrangements for the
transfer of AIIUs, then the general provisions relating to prescribed
international units will apply. For example, AIIUs, as prescribed
international units, would be transferable within the Registry unless
regulations made under new subsection 57(2) of the ANREU Act modify
the operation of the domestic transfer provisions in Part 4, Division 3 of the
ANREU Act by declaring that once issued, AIIUs are not transferable.
1.78 Modifications may be made to provisions relating to:
· making entries in the Registry for prescribed international
units;
· ownership of prescribed international units;
· transfer of prescribed international units including domestic
transfers and incoming and outgoing international transfers;
· transmission prescribed international units by operation of
laws;
35
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
· property rights in relation to prescribed international units;
and
· equitable interests in relation to prescribed international units
including the registration of equitable interests.
1.79 Any modifications under new subsection 57(2) will prevail over
the existing provisions in Part 4, Division 3 of the ANREU Act.
1.80 This regulation-making power provides the Government with
necessary flexibility to implement future international linking
arrangements, which may differ in their nature and scope. This flexibility is
necessary to ensure that the current form of the ANREU Act does not
unduly limit the capacity of Australia to effectively negotiate future linking
arrangements in its best interests and to ensure that Australia can also
implement the operating requirements for any such future linking
arrangements.
1.81 This approach also provides the Government with an efficient
way to modify the rules governing a specific international linking
arrangement to ensure compliance with any requirements under the relevant
international arrangement. Subsequent to an international agreement, this
approach may also expedite access by liable entities to new types or classes
of eligible international emissions units where a direct link to a foreign
registry is not possible, which would further encourage the development of
a deep and liquid international carbon market.
1.82 Any regulations modifying the operation of the existing
provisions of Part 4, Division 3 of the ANREU Act are legislative
instruments for the purposes of the Legislative Instruments Act 2003 and
may be disallowed. The regulation-making power is limited in scope to
amendments concerning a specified class of AIIUs and does not apply more
generally. Furthermore, if the transfer of AIIUs is permitted within the
Registry, then modifications under new subsection 57(2) of the ANREU
Act will not be required.
Cancellation of AIIUs
1.83 The Regulator must cancel an AIIU held in a person's Registry
account if the conditions set out in the regulations are satisfied. [Item 23,
section 66A, ANREU Act] The circumstances set out in regulations may, for
example, include an option to voluntarily cancel AIIUs. In the case where
an indirect link is preliminary to a direct link, the Government may wish to
specify that AIIUs must be surrendered before a direct link is established or
be cancelled. By providing for conditions to be set out in regulations, the
Government may take account of the specific requirements for the
implementation of differing linking arrangements over time. These
regulations are legislative instruments for the purposes of the Legislative
Instruments Act 2003 and may be disallowed.
36
Chapter 1: Amendments relating to the surrender of international units
1.84 To cancel a unit, the Regulator must remove the entry for the unit
from the person's Registry account and set out a record of each
cancellation. [Item 23, subsections 66A(3)-(4), ANREU Act]
1.85 In the interests of due process, a decision by the Regulator to
cancel an AIIU will be a reviewable decision. [Item 26, section 82, ANREU Act]
General power of correction
1.86 Section 21 of the ANREU Act provides that the Regulator may
alter the Registry to ensure compliance with provisions of an international
agreement relating to prescribed international units.5
1.87 This general power of correction is extended to include
corrections necessary to comply with requirements of an `international
arrangement' relating to prescribed international units. [Item 15, subsection
21(1), ANREU Act] An `international arrangement' means an arrangement
between Australia and a foreign government body or an international
organisation. [Item 8, section 4, ANREU Act] A `foreign government body'
includes foreign governments, sub-national governments and their
authorities and an `international organisation' includes both bilateral and
multilateral international bodies and groups of international bodies, as well
as the subsidiary bodies through which they work (including commissions,
councils and committees). [Item 7, section 4, ANREU Act] [Item 9, section 4,
ANREU Act] The Regulator can alter the Registry to comply with linking
arrangements that have been agreed, for example through a protocol or an
exchange of letters. This mirrors the existing approach, such that the
Registry will be corrected if it is inconsistent with the Kyoto rules.
Relinquishment
1.88 A person may be required to relinquish AIIUs in certain
circumstances. [Item 14, section 4, ANREU Act] The purpose of the
relinquishment provisions are to ensure that fraudulent conduct relating to
AIIUs (and the international units to which they are linked) is treated in a
similar way to fraudulent conduct relating to other carbon units. These
provisions are based on the comparable provisions included in Parts 10 and
11 of the CE Act.
1.89 Upon application by the Commonwealth Director of Public
Prosecutions or the Regulator, a court may order a person to relinquish a
specified number of AIIUs if a person is convicted of: [Item 23, sections 66B-
66C, ANREU Act]
· an offence relating to fraudulent conduct under a specified
section of the Criminal Code6; or
5
This is further discussed in paragraphs 1.31 to 1.33 of the Explanatory Memorandum for the
Australian National Registry of Emissions Units Bill 2011, available at:
http://www.comlaw.gov.au/Details/C2011B00062/Download
37
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
· an offence relating to a foreign law that corresponds to the
specified sections of the Criminal Code.
1.90 A person must comply with such an order even when the person is
not the registered holder of any AIIUs nor the holder of those units required
to be relinquished. [Item 23, section 66C, ANREU Act]
1.91 The purpose of these provisions is to ensure that relinquishment
can be required in cases where the fraudulent conduct occurs overseas,
which is particularly important given the basis on which AIIUs are issued.
1.92 Similar to relinquishment of carbon units, AIIUs are relinquished
by electronic notice transmitted to the Regulator. The notice must specify,
among other things, that the relinquishment relates to AIIUs and the
specific order under which relinquishment is required. Upon
relinquishment, the AIIU is cancelled and the Regulator must remove the
entry from the unit holder's Registry account. [Item 23, section 66D, ANREU
Act]
1.93 Regulations may make specific provisions regarding the process
of relinquishment. [Item 23, section 66D, ANREU Act] This reflects that
differing approaches may be required because AIIUs may be relinquished
for different types of international units, and given the potential for
different classes of AIIU to have different restrictions on their transfer. The
range of these approaches will depend on the nature and scope of future
linking arrangements entered into by Australia. These regulations are
legislative instruments for the purposes of the Legislative Instruments Act
2003 and may be disallowed.
1.94 If a person required to relinquish AIIUs does not hold a sufficient
number of these units, the person may transfer an equal number of
substitute units, in place of AIIUs, in accordance with the regulations.
Transfer of the substitute units has the effect as if relinquishment of the
AIIUs had occurred. The transfer is actioned by electronic notice and must
specify that the transfer is instead of the relinquishment of AIIUs. A carbon
unit or an eligible Australian carbon credit unit are considered substitutes.
All other unit types, including Kyoto units, are not considered substitutes
[Item 23, section 66E, ANREU Act]. Please note that a carbon unit that is
substituted for an AIIU is considered to have been transferred rather than
relinquished. This means that provisions for relinquished carbon units in
Part 11 of the CE Act do not apply.
1.95 If a person is required to relinquish a particular number of AIIUs
and does not do so before a particular time (that is, the compliance
deadline), then they are liable to pay an administrative penalty or a late
payment penalty. [Item 23, section 66F, ANREU Act] [Item 23, section 66G, ANREU
Act] The amount of the penalty is the same as the amount of the penalties
6
As implemented by the Criminal Code Act 1995
38
Chapter 1: Amendments relating to the surrender of international units
for non-compliance with relinquishment requirements under Part 11 of the
CE Act. This represents the opportunity cost of buying an Australian
carbon unit.
Table 1.1 Penalties relating to the relinquishment of AIIUs
Item/New Section Description Administrative Penalty
Item 23 Administrative penalty - Determined according to
new section Failure to relinquish AIIUs at the formula in new section
66F(2) all 66F(2)
Item 23 Administrative penalty - Determined according to
new section Failure to relinquish sufficient the formula in new section
66F(4) units 66F(4)
Item 23 Late payment penalty - An amount calculated at the
new section 66 relinquishment rate of 20 per cent per
annum or such rate as is
specified in regulations
1.96 Liability for administrative and late payment penalties is an
automatic consequence of non-compliance and the Regulator has no
discretion about whether the person is liable.
1.97 The Regulator does not have a general power to remit late
payment penalties but must apply specified criteria in determining whether
to remit a late payment penalty, [Item 23, subsection 66G(2), ANREU Act]namely:
· the person did not contribute to the delay in payment and has
taken reasonable steps to mitigate the causes of the delay; or
· the person contributed to the delay in payment and has taken
reasonable steps to mitigate the causes of the delay and,
having regard to the reasons for the delay, it would be fair
and reasonable to remit some or all of the amount; or
· the Regulator is satisfied that there are special circumstances
that make it reasonable to remit some or all of the amount.
1.98 In the interests of due process, a decision by the Regulator to
refuse to remit the whole or part of late payment penalty is a reviewable
decision. [Item 26, line 16 at the end of the table, ANREU Act]
1.99 Late payment penalties are debts due and payable to the
Commonwealth and may be recovered by the Regulator, on the
Commonwealth's behalf, in a court of competent jurisdiction. [Item 23,
section 66H, ANREU Act]
1.100 The Regulator may set off penalties for non-compliance with
relinquishment requirements, if the amount owing is of a kind specified in
the regulations. [Item 23, section 66J, ANREU Act] The Commonwealth must
refund an overpayment of a late payment penalty made by a person [Item 23,
section 66K, ANREU Act]. This effectively allows for the person and the
39
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Commonwealth to net-out money owed. It is appropriate to specify the
types of debts that can be set off in regulations as the amount may vary
according to the debts to be set off. These are disallowable regulations.
1.101 To maintain the integrity of relinquishment provisions, entering
into `schemes' aimed at ensuring that a body corporate or trust becomes
unable to pay an existing or future liability to pay an administrative penalty
under section 66F (for non-compliance with a relinquishment requirement
in relation to an AIIU) is a criminal offence. [Item 23, sections 66L-66M,
ANREU Act]
1.102 These provisions are, in substance, closely modelled on sections
275 and 276 the CE Act, which deal with schemes to avoid payment of an
existing or future liability to pay an administrative penalty under section
212 of the CE Act (for non-compliance with a relinquishment requirement
in relation to a carbon unit). `Scheme' and `trust' have the same respective
meanings as in Part 19 of the CE Act. [Item 23, section 66N, ANREU Act]
1.103 These provisions are comparable to those which apply to various
taxes. They are aimed at artificial schemes involving, for instance, `asset-
stripping' whereby a corporation's assets are moved leaving only liabilities,
and creating a situation where the corporation is forced into liquidation. By
avoiding their liabilities under the CE Act, such schemes may allow
dishonest persons to accrue very large financial gains. For this reason, the
maximum sanction is 10 years' imprisonment or 10,000 penalty units, or
both.
Civil penalties
1.104 Civil penalty orders are one of a range of measures designed to
encourage compliance with registry rules and requirements.
1.105 Civil penalty provisions, including ancillary contraventions, will
apply if a person contravenes or aids a contravention of a requirement
relating to AIIUs set out in the regulations [Item 18, section 48E, ANREU Act].
Failure to comply with the regulations may lead to the imposition of a civil
penalty. [Item 18, subsection 48E(4), ANREU Act]
1.106 Pecuniary penalties for contravention of a civil penalty are set out
in Part 7 of the ANREU Act. Subsection 69(4)(b) provides that the
pecuniary penalty payable by a body corporate must not exceed
10,000 penalty units for each contravention of a civil penalty provision.
Subsection 69(5)(b) of the ANREU Act provides that the pecuniary penalty
payable by a person other than a body corporate must not exceed
2,000 penalty units for each contravention. The maximum levels of civil
penalties reflect the seriousness of the contraventions and represent clear
and strong disincentives for non-compliance. Any civil penalties provided
for in the ANREU Act are maximums and any penalty that may be imposed
by a court will be determined according to the circumstances of the
particular case. The integrity of the carbon pricing mechanism could be
40
Chapter 1: Amendments relating to the surrender of international units
compromised by liable entities or other market participants acting in a
manner that undermines the linking arrangement.
1.107 In a proceeding for a civil penalty order against a person for
contravention of a requirement relating to AIIUs set out in regulations, it is
not necessary to prove that person's state of mind, including the person's
intention, knowledge, recklessness, negligence or any other state of mind.
[Item 24, section 79, ANREU Act] [Item 25, section 79, ANREU Act] Implicit in this is
a reasonable expectation that those subject to the provision will take steps
to prevent inadvertent contraventions. This mirrors the current provisions
in section 79 of the ANREU Act.
Publication of information
1.108 To promote transparency, the Regulator is to publish information
about prescribed international units, including information about the issue
of AIIUs.
1.109 For each class of prescribed international units, the Regulator
must publish, on its website the total number of each class of units held in
the Registry and other information relating to the units or their registered
holders as specified in the regulations. [Item 21, section 59A, ANREU Act] The
Regulator must publish this information as soon as practicable after the end
of each quarter. [Item 21, section 59A, ANREU Act] `Quarter' means a period of
three months beginning on 1 July, 1 October, 1 January or 1 April of a
given year. [Item 13A, section 4, ANREU Act]
1.110 The Regulator must also publish, and keep up-to-date, statements
setting out concise descriptions of the characteristics of European allowance
units and AIIUs [Item 22, section 61, ANREU Act]. These statements will assist
in providing information to retail investors about emissions units. No
product disclosure statement or prospectus will be issued by the
Commonwealth under the relevant provisions of the Corporations Act 2001
concerning these units. This approach is consistent with that taken to other
types of emissions units, including eligible international emissions units.
The Regulator must publish the concise descriptions of European allowance
units and AIIUs within 30 days of the commencement of the relevant
regulations. [Item 22, subsections 61(5)-(6), ANREU Act]
1.111 To promote transparency of the relinquishment process, the
Regulator must publish certain information relating to the relinquishment of
prescribed units. These publication requirements are either through a
requirement to publish the information on the Information Database or on
the Regulator's website (www.cleanenergyregulator.gov.au).
1.112 If a relinquishment requirement relates to a person in the
Information Database, the Regulator must enter in the Information Database
any requirement to relinquish AIIUs and the number of units required to be
relinquished or substitute units transferred. [Item 22A, section 63B, ANREU Act]
[Item 22A, section 63D, ANREU Act] If the person is not already in the
41
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Information Database, the Regulator must publish the person's name, the
details of the relinquishment requirement and the number of relinquished
AIIUs (or substitute units transferred) on its website. [Item 22A, section 63E,
ANREU Act] [Item 22A, section 63G, ANREU Act]
1.113 The Regulator must enter in the Information Database the
information relating to the number of units relinquished as soon as
practicable after receiving either the relinquishment notice or the notice of
substitute unit transfer. [Item 22A, section 63D, ANREU Act] [Item 22A, section
63G, ANREU Act]
1.114 If the relinquishment requirement relates to a person in the
Information Database, the Regulator must enter on the Information
Database any details of unpaid administrative penalties relating to non-
compliance with an AIIU relinquishment requirement [Item 22A, section 63C,
ANREU Act]. If the person is not in the Information Database, the Regulator
must publish the name of the person and the details of the unpaid penalty
amount on its website. [Item 22A, section 63F, ANREU Act]
Removal of the price floor
1.115 The CE Act and associated acts currently provide for a price floor
(a minimum carbon price) for the financial years 2015-16, 2016-17, and
2017-18. The price floor would be implemented through a minimum
auction reserve price and a charge on the surrender of eligible international
emissions units.
1.116 The capacity to impose a price floor is removed as part of the
Government's arrangement to link the carbon pricing mechanism to the EU
ETS. Further details on the price floor, as originally proposed, are available
in the paragraphs 3.83 to 3.88 and paragraph 3.109 of the Explanatory
Memorandum to the Clean Energy Bill 2011.7
Removal of surrender charge on eligible international emissions units
1.117 Section 124 of the CE Act, which introduced the surrender charge
on eligible international emissions units, is repealed, as is the entire Clean
Energy (International Unit Surrender Charge) Act 2011. Section 124 of
the CE Act provided for a charge to be imposed by the Clean Energy
(International Unit Surrender Charge) Act 2011 if an eligible international
emissions unit was surrendered in relation to the financial years 2015-16,
2016-17, or 2017-18. [Item 70, section 124, CE Act] [Item 95, CE (IUSC) Act]
1.118 The Simplified Outline of Part 6 of the CE Act is amended to
remove reference to the charge for the surrender of international units. [Item
65, section 121, CE Act] [Item 66, section 121, CE Act] [Item 67, section 121, CE Act]
7
Available from:
http://www.comlaw.gov.au/Details/C2011B00166/Explanatory%20Memorandum/Text
42
Chapter 1: Amendments relating to the surrender of international units
1.119 The Clean Energy (International Unit Surrender Charge) Act
2011 is no longer an `associated provision' of the CE Act within the
meaning of section 307 of the CE Act. [Item 28, section 5, CE Act] [Item 81,
section 307, CE Act] [Item 82, section 307, CE Act]
1.120 The Climate Change Authority is no longer required to conduct
reviews under sections 288 and 293 of the CE Act of provisions that relate
to charges for the surrender of eligible international emissions units. [Item
79, section 288, CE Act] [Item 80, section 293, CE Act]
Removal of minimum auction reserve price
1.121 Subsection 111(5) of the CE Act no longer provides for a
minimum auction reserve charge. Subsection 111(5) of the CE Act
provided for a minimum auction reserve charge in relation to the 2015-16,
2016-17, and 2017-18 financial years. [Item 58, section 111, CE Act]
1.122 A minimum auction reserve charge no longer applies under
section 8 of the Clean Energy (Charges-Customs) Act, section 8 of the
Clean Energy (Charges-Excise) Act and section 8 of the Clean Energy (Unit
Issue Charge-Auctions) Act. [Item 2, section 8, CE (Charges-Excise) Act] [Item 2,
section 8, CE (Charges-Customs) Act] Superflous definitions have been repealed.
[Item 1, section 3, CE (Charges-Excise) Act] [Item 1, section 3, CE (Charges-Customs)
Act] [Items 1-2, section 3, CE (Unit Issue Charge-Auctions) Act] [Item 3, subsection 8(3),
CE (Unit Issue Charge-Auctions) Act]
1.123 The Minister may establish a `reserve charge amount' through a
Ministerial determination for a specified auction. The Minister may
establish a means to calculate a reserve charge amount in relation to the
specified auction. This determination is a legislative instrument for the
purposes of the Legislative Instruments Act 2003 and is a disallowable
instrument. Specifying a calculation for the reserve charge amount in a
determination would provide market participants certainty regarding the
method of determining future auction reserve charges. [Item 59, subsection
111(6), CE Act] [Item 3, subsection 8(4), CE (Charges-Excise) Act] [Item 3, subsection
8(4), CE (Charges-Customs) Act] [Item 4, subsection 8(4), 10, CE (Unit Issue Charge-
Auctions) Act]
1.124 Under section 113 of the CE Act the Minister may establish the
policies, procedures and rules for auctioning through a determination. The
scope of the Minister's power to make this determination is modified to
reflect the changes to the arrangements for relinquished units (see
paragraphs 1.88 to 1.103 above). [Item 61, subsection 113(2)(m), CE Act] [Item
62, subsection 113(2)(r), CE Act] [Item 63, subsection 113(2)(r), CE Act] [Item 64,
subsection 113(2)(s), CE Act]
1.125 The `auction reserve charge amount' is a mechanism aimed at
enhancing the price discovery of the auction. A reserve charge amount can
serve to counteract bid shading (that is, bidding an amount which is less
than the amount that the participant believes that the unit is worth) or
collusion by auction participants by minimising the potential gains from
such behaviour. When there is a secondary market for carbon units, the
43
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
reserve charge will ensure that the clearing price of the auction does not
significantly diverge from the secondary market price.
1.126 In February 2012, the Department of Climate Change and Energy
Efficiency published a `Position paper on the legislative instrument for
auctioning carbon units in Australia's carbon pricing mechanism'8. The
paper proposed that an ascending clock auction format be used. For an
ascending clock auction, the reserve charge would typically also represent
the first price for which bidders can indicate their demand, the starting
price. A starting price will improve the speed and efficiency of the auction.
1.127 The Climate Change Authority is no longer required to conduct
reviews under sections 288 and 293 of the CE Act of provisions that relate
to minimum reserve auction charges. [Item 79, section 288, CE Act] [Item 80,
section 293, CE Act]
1.128 The definition of `auction' is amended to reflect the changes to
the arrangements for relinquished units. [Item 29, section 5, CE Act]
Equivalent carbon pricing for liquid fuels and synthetic greenhouse
gases
1.129 The use of eligible international emissions units up to the
designated limits can lead to a liable entity having a cost of compliance that
is lower than the price of carbon units.
1.130 Under the existing provisions of relevant Acts in the Clean Energy
Legislative Package,9 the equivalent carbon price that applied to liquid fuels
and synthetic greenhouse gases was to be determined by reference to the
price of carbon units sold at domestic auctions. For synthetic greenhouse
gases the Regulator would use the benchmark average auction charge to
calculate the equivalent carbon price. For liquid fuels the Regulator would
use the auction results for the six months ending on 31 May and the six
months ending 30 November to calculate the equivalent carbon price. [Item
2A, section 4, ANREU Act]
1.131 The equivalent carbon price that now applies to synthetic
greenhouse gases and liquid fuels provides a more accurate estimate of the
cost of compliance faced by liable entities under the carbon pricing
mechanism, taking into account links with other international schemes,
including the EU ETS. This equivalent carbon price is now known as the
`per-tonne carbon price equivalent'. [Item 36, section 5, CE Act] [Item 76, section
196A, CE Act]
8
Available at:
http://www.climatechange.gov.au/government/submissions/closed-consultations/auctioning-
carbon-units/~/media/submissions/auctioning-carbon-units/auction-carbon-credits-position-
paper-pdf.pdf
9
The CE Act, the Fuel Tax Act, the Excise Tariff Act, the SGG (Import Levy) Act and the
SGG (Manufacture Levy) Act.
44
Chapter 1: Amendments relating to the surrender of international units
Per-tonne carbon price equivalent
1.132 The Regulator will calculate the per-tonne carbon price equivalent
based on a weighted average of prices for domestic units and international
units. Specifically, the weighted average of domestic units will reflect the
six-monthly auction results, and the weighted average of international units
will reflect the sum of the reference prices for eligible international
emissions units subject to a designated limit.
Example 1.9 Calculation of the Per-tonne carbon price equivalent
If the reference price for Kyoto units is $11, with a designated limit of
12.5 per cent, and if the six month average auction price is $13 then the
per-tonne carbon price equivalent will therefore be equal to
($11 × 12.5%) + ($13 × (1 - 12.5%)), which is $12.75.
1.133 To ensure clarity and consistency in the calculation of the per-
tonne carbon price equivalent and to provide certainty to affected entities,
the Minister may determine the approach that the Regulator is to take when
determining reference prices for prescribed classes of international units
subject to a designated limit through a Ministerial determination. This
determination is a legislative instrument for the purposes of the Legislative
Instruments Act 2003 and is a disallowable instrument. This will allow the
Minister to set an appropriate reference price for different unit types. For
example, these reference prices may need to account for trade in units
across different exchanges and the proportion of units traded on and off
exchanges.
1.134 The Regulator must publish the per-tonne carbon price equivalent
for a designated six month period (which ends on 31 May or 30 November,
starting on 31 May 2015) within seven business days after the end of each.
designated six month period. [Item 76, subsection 196A(1), CE Act]
The average carbon unit auction price for a six month period
1.135 From May 2015 onwards, the Regulator must publish the `average
carbon unit auction price'. This price is the average price for auctions of
carbon units for the previous six month period, ending at the end of May or
the end of November respectively. This must occur within seven business
days of May 31, and within seven business days of November 30. [Item 30,
section 5, CE Act] [Item 72, subsections 196(1AA)-(1AB), CE Act] [Item 73, subsection
196(1), CE Act] [Item 74, subsection 196(1A), CE Act] [Item 75, subsection 196(2A), CE
Act]
1.136 The average carbon unit auction price for the six month period
ending at the end of May 2015 will be calculated using the auction results
from the previous 11 months. This is to ensure that if no auctions take
place in the six months prior to May 2015 the average carbon unit auction
price can still be calculated. [Item 72, subsections 196(1AA)-(1AB), CE Act]
45
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Reference prices
1.137 If a designated limit applies to a particular class of eligible
international emissions units for a particular financial year, then from
31 May 2015, the Regulator must declare a reference price for the class of
units within seven days after 31 May and after 30 November of that
financial year. [Item 76, subsection 196A(5), CE Act]
1.138 To ensure clarity and consistency in the calculation of the
reference price and to provide certainty to affected entities, the Minister
may determine, by a legislative instrument, the method used by the
Regulator to make such a declaration. [Item 76, subsection 196A(6), CE Act] This
determination is a legislative instrument for the purposes of the Legislative
Instruments Act 2003 and is a disallowable instrument. In making such a
determination, the Minister must have regard to prices paid for eligible
international units that are in that class, and such other matters (if any) that
they consider to be relevant. [Item 76, subsection 196A(7), CE Act] For example,
these reference prices may need account for trade in units across multiple
different exchanges and the proportion of units traded on and off
exchanges.
1.139 The declaration of a reference price by the Regulator must comply
with such a determination, and be published on the Regulator's website.
[Item 76, subsections 196A(8)-196A(9), CE Act]
1.140 The declaration of a reference price by the Regulator is not a
legislative instrument for the purposes of the Legislative Instruments Act
2003. [Item 76, subsection 196A(10), CE Act] The declaration is not of a
legislative character and is therefore not within the meaning of section 5 of
the Legislative Instruments Act 2003. This provision is included to assist
readers and indicate that an exemption from the Legislative Instruments Act
2003 is neither sought nor required.
1.141 The adjusted reference price for a class of units that has a
designated limit is the product of the reference price for the class of units
with the designated limit percentage for that class of units. [Item 76,
subsection 196A(11), CE Act]
Basic rule for calculating the per-tonne carbon price equivalent
1.142 The per-tonne carbon price equivalent, for a designated six month
period, is defined by the equation below, and worked out to two decimal
places (rounding up if the third decimal place is 5 or more). [Item 76,
subsection 196A(2), CE Act]
total of adjusted
reference prices
total of designated average carbon unit
1
limit percentages auction price
46
Chapter 1: Amendments relating to the surrender of international units
where:
· the total of adjusted reference prices is the sum of the adjusted
reference prices for that six month period - it is in effect the
weighted sum of the reference prices, weighted by the
corresponding designated limit percentages;
· the total of the designated limit percentages is the sum of the
designated limit percentages for classes of eligible emissions
units that are subject to designated limit percentages in the
financial year in which the designated six month period ends;
and
· the average carbon unit auction price is the average carbon
unit auction price for the six month period that is specified in
section 196 of the CE Act.
1.143 The basic rule for calculating the per-tonne carbon price
equivalent is modified in certain circumstances that are outlined below.
[Item 76, subsection 196A(3), CE Act]
Modifications to the basic rule for calculating the per-tonne carbon
price equivalent
1.144 The calculation of a per-tonne carbon price equivalent will take
into account the possibility that one or more reference prices are higher than
the average auction price, and the possibility that no legislative instruments
are in force for determining reference prices.
1.145 If the number worked out under the basic rule for calculating the
per-tonne carbon price equivalent is greater than the average carbon unit
auction price, the per-tonne carbon price equivalent is equal to the average
carbon unit auction price. [Item 76, subsection 196A(4), CE Act]
1.146 If there is no legislative instrument in force to specify the method
used by the Regulator to declare a reference price, the per-tonne carbon
price equivalent is equal to the average carbon unit auction price. [Item 76,
subsection 196A(4), CE Act]
1.147 If there is a reference price for a class of eligible international
emissions units that is greater than the average carbon unit auction price,
then the basic rule for calculating the per-tonne carbon price equivalent is
modified in the following way. The adjusted reference price for that class
is disregarded when calculating the total of adjusted reference prices; and
the designated limit percentage for that class is disregarded when
calculating the total of designated limit percentages. [Item 76, subsection
196A(12), CE Act] This is equivalent to setting the reference price for that
class to be the average carbon unit auction price. This provision reflects
that if the price for a class of eligible international emissions units is higher
than the price of carbon units, they are unlikely to be used.
47
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
1.148 The basic rule is also modified in the event that new designated
limits are made, for which the limit applies to a class of units that is
contained within another class of units for which a different designated
limit applies.
1.149 If there is a class of eligible international emissions units subject
to a designated limit for a particular financial year; and there is a class of
eligible international emissions units that is included in the original class
and that is subject to a smaller designated limit percentage, then the
designated limit percentage for that class is disregarded when calculating
the total of designated limit percentages. [Item 76, subsection 196A(13), CE Act]
1.150 If a class of eligible international emissions units is subject to a
designated limit for a particular financial year, and there is a class of
eligible international emissions units that is included in the original class
and that is subject to a smaller designated limit percentage, and the
reference price for that class is greater than or equal to the reference price
for the original class, the adjusted reference price for the class subject to the
smaller designated limit percentage is disregarded when calculating the
total of adjusted reference prices. [Item 76, subsection 196A(14), CE Act] This
reflects that in this circumstance, liable entities would prefer not to
purchase units that are in the smaller class, because they would be more
expensive.
Example 1.10 Example where the reference price is disregarded
There are international emissions units called Reforestation units with
a designated limit of 5 per cent. Units in this class are also
International land sector units, which have a designated limit of
12.5 per cent, the reference price for Reforestation units is $15, the
reference price for International land sector units is $10 and the
average carbon unit auction price is $20.
In this situation, subsection 196A(13) of the CE Act specifies that the
designated limit of 5 per cent for Reforestation units is disregarded
when calculating the total of designated limit percentages, so the total
of designated limit percentages is 12.5 per cent. Subsection 196A(14)
of the CE Act specifies that because the price of Reforestation units is
greater than the price of International land sector units, the adjusted
reference price for Reforestation units is disregarded when calculating
the total of adjusted reference prices.
If there are no other designated limits, the total of adjusted reference
prices will be equal to $1.25 ($1.25 = $10 × 12.5%); the total of
designated limit percentages will be equal to 12.5 per cent; and the per-
tonne carbon price equivalent will therefore be equal to $1.25 + (100%
- 12.5%) × $20, which is $18.75.
1.151 If a class of eligible international emissions units is subject to a
designated limit for a particular financial year, and there are one or more
classes of eligible international emissions units subject to a smaller
designated limit, which are contained in the original class, and for which
48
Chapter 1: Amendments relating to the surrender of international units
the reference prices are less than the reference price for the original class,
the adjusted reference price for the original class would be given by: [Item
76, subsection 196A(15), CE Act]
Designated limit Total of designated
Reference price
percentage for limit percentages
for principal class
principal class for secondary classes
Where:
· the reference price for principal class refers to the reference
price of the original class of eligible international emissions
units for the designated six month period;
· the designated limit percentage for principal class is the
designated limit percentage for the original class; of eligible
international emissions units; and
· the total of designated limit percentages for secondary classes
is the sum of the designated limit percentages for each class
contained in the original class that has a reference price that is
less than the reference price for the principal class.
Example 1.11 Calculation of per-tonne carbon price equivalent
There are international emissions units called Reforestation units,
which have a designated limit of 5 per cent; and there are international
emissions units called Afforestation units, which have a designated
limit of 2.5 per cent. Units in these classes are also International land
sector units, which have a designated limit of 12.5 per cent and that
the reference price for Reforestation units is $8; the reference price for
Afforestation units is $5; the reference price for International land
sector units is $10; and the average carbon unit auction price is $20.
There are no other designated limits.
In this situation, subsection 196A(13) of the CE Act specifies that the
designated limit of 5 per cent for Reforestation units is disregarded
when calculating the total of designated limit percentages; and the
designated limit of 2.5 per cent for Afforestation units is disregarded
when calculating the total of designated limit percentages. The total of
designated limit percentages is 12.5 per cent.
Subsection 196A(15) of the CE Act specifies that because the price of
Afforestation units and Reforestation units is less than the price of
International land sector units, the adjusted reference price for
International land sector units is $10 × (12.5% - (5%+2.5%)), which is
$0.50. The adjusted reference price for Afforestation units is $0.125
($5×2.5%) and the adjusted reference price for Reforestation units is
$0.40 ($8×5%). The total of adjusted reference prices will be equal to
$1.025.
The per-tonne carbon price equivalent will therefore be equal to
$1.025 + (100% - 12.5%) × $20, which is $18.53, due to rounding.
49
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
How classes of eligible international units are defined
1.152 Eligible international emissions units will be divided into classes
for the purposes for calculating the per-tonne carbon price equivalent.
Listed units, as defined under 123A(10) of the CE Act, will form one class.
[Item 76, section 196A (17), CE Act] Other classes will be established by
regulations made for the purposes of subsection 123A(1) of the CE Act.
[Item 76, section 196A (18), CE Act]
How the per-tonne carbon price equivalent is used
1.153 The per-tonne carbon price equivalent applied to synthetic
greenhouse gases will be the most recently published (under section 196A
of the CE Act) before the start of the quarter in which the manufacture or
import of the synthetic greenhouse gas occurs. This will ensure that the
per-tonne carbon price equivalent applied to synthetic greenhouse gases is
consistent with compliance costs of liable entities under the carbon pricing
mechanism with linking arrangements. [Items 1-4, section(2A), (3A), and (4A),
SGG (Import Levy) Act] [Items 1-3, section (2A), (3A), SGG (Manufacture Levy) Act]
1.154 The relevant fuel tax legislation is amended to ensure that its
imposition of the equivalent carbon price is consistent with compliance
costs of liable entities under the carbon pricing mechanism with linking
arrangements. [Items 1-4, section 3, 6FA(3), 6FB(3), Excise Tariff Act] [Item 83,
subsections 43-8(2)(a) and 43-8(2)(b), Fuel Tax Act].
50
Chapter 2 Other amendments
Outline of chapter
2.1 Chapter 2 explains the other technical amendments to the CE Act
and the NGER Act, including:
· amendments to the CE Act concerning the streamlining of
the processes relating to the advance auctions of carbon units
and relinquishment of carbon units;
· technical amendments to the NGER Act to provide the
Minister with the power to determine methods to measure
amounts of designated fuels and methods to adjust liabilities
relating to potential greenhouse gas emissions;
· amendments to the CE Act permitting regulations to be made
to determine how specific circumstances relating to the
supply and use of natural gas are treated under CE Act; and
· a minor amendment to the provisions of the CE Act
concerning the eligibility test for the Opt-in Scheme to
expressly include GST joint venture operators as well as GST
joint venture participants.
Context of amendments
Advance auctions of carbon units
2.2 Under Part 4 of the CE Act, the Regulator may auction carbon
units before the first year for which they can be surrendered (that is, their
vintage year). These auctions are known as `advance auctions'.
2.3 The amount of carbon units that can be advance auctioned is
currently limited to a maximum of 15 million carbon units for each vintage
per year, where the auction occurs more than 6 months before the beginning
of the relevant vintage year and there is no carbon pollution cap number for
that year. This limit prevents the advance auctioning of a large number of
units which could reduce the Government's capacity to set future carbon
pollution cap levels.
2.4 This limit is increased to 40 million units for carbon units whose
vintage is 2015-16 that are auctioned in 2013-14; and 20 million units for
other advance auctions where there is no carbon pollution cap number for
that year. The new limit will ensure that liable entities have access to
sufficient quantities of carbon units to enable risk management through
51
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
forward contracting. It avoids the risk auctions are delayed because of the
disallowance period applicable to pollution caps.
Changes to the treatment of relinquished carbon units
2.5 Parts 7, 10 and 11 of the CE Act provide that carbon units may be
relinquished voluntarily, or as a result of a court order to relinquish units.
The rules concerning relinquishment are to be streamlined, so that the
current requirement that relinquished units be transferred to a
`Commonwealth relinquished units account' is removed and those units will
instead be cancelled, and a new unit issued by the Regulator in their place.
Amendments relating to measuring and adjusting amounts of designated
fuels for the purpose of ascertaining potential greenhouse gas emissions
2.6 Section 7B of the NGER Act defines potential greenhouse gas
emissions embodied in an amount of designated fuel, including natural gas
and taxable fuel.10 `Potential greenhouse gas emissions' are used to assign
liability for emissions, before they are produced, relating to natural gas and
fuels covered under the carbon price opt-in scheme.
2.7 Section 7B of the NGER Act gives the Minister power to
determine methods for ascertaining the potential greenhouse gas emissions
embodied in an amount of designated fuel. Subsection 10(3) of the
NGER Act gives the Minister power to determine methods to measure
amounts of emissions, energy consumption and energy production.
2.8 The amendments enable the Minister to adjust the liability
resulting from potential greenhouse gas emissions embodied in an amount
of designated fuel to account for discrepancies in the calculation of liability
in the previous eligible financial year.
Changes to the treatment of some natural gas supply and use
arrangements
2.9 The natural gas industry involves a complex array of supply
arrangements which can change over time. Currently, the natural gas
provisions cater for the vast majority of supply arrangements in use. In
order for the carbon pricing mechanism to maintain effective and complete
coverage of natural gas, a power will be included in the CE Act to allow
regulations to be made to provide for coverage of alternative natural gas
arrangements. This will help maintain competitive neutrality by supporting
the complete coverage of natural gas under the carbon pricing mechanism
over time.
10
Taxable fuel has the same meaning as in the Clean Energy Act 2011.
52
Chapter 2: Other Amendments
2.10 Part 3, Division 2 of the CE Act provides for liability for natural
gas emissions to apply to a person who is a liable entity for a facility where
gas is used. Part 3 Division 3 of the CE Act provides for liability to arise
for a natural gas supplier when they supply natural gas to a person and the
natural gas is withdrawn from a natural gas supply pipeline for use. It also
establishes the Obligation Transfer Number (OTN) to apportion liability
between suppliers and end users.
2.11 Where the existing provisions in Part 3, Division 2 or Part 3
Division 3 of the CE Act do not apply, regulations may set out specific
circumstances in which liability would arise for a supplier or end user of
natural gas. `Own-use notifications' and `follow-up notifications' are
mechanisms intended to enable suppliers to identify when the gas they
supply is applied to a person's use. This will allow suppliers to determine
where liability applies. Regulations may modify the definition of supply
for the purpose of the new provisions and determine when supply occurs to
facilitate their application.
2.12 These provisions are intended to apply to specific commercial
arrangements in the natural gas sector. In general, they are not intended to
cover natural gas used at large gas consuming facilities as liability would
ultimately arise from the direct emitter provisions. Furthermore, the
amendments are not intended to apply to small end users, such as
households, as they obtain gas through generic supply arrangements which
give rise to liability for a supplier under section 33 of the CE Act.
Changes to the Opt-in Scheme eligibility test
2.13 Under the Opt-in Scheme, a designated opt-in person must pass
the eligibility test in respect of each acquisition, manufacture or import of
fuel in order to be liable for the potential emissions embodied in the fuel.
The eligibility test for GST joint venture participants is extended to also
include GST joint venture operators.
Summary of new law
2.14 The limit on advance auctioned units under section 101 of the
CE Act is increased to 40 million units for carbon units whose vintage is
2015-16 that are auctioned in 2013-14; and 20 million units for other
advance auctions where there is no carbon pollution cap number for that
year.
2.15 The Regulator must not auction units more than three years in
advance of their vintage.
2.16 Relinquished carbon units will be cancelled and a new carbon unit
will be auctioned in its place.
53
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
2.17 The Minister, from 1 July 2013, may adjust the liability resulting
from potential greenhouse gas emissions embodied in an amount of
designated fuel. These adjustments are designed to account for
discrepancies in the calculation of liability in the previous eligible financial
year which are the result of complexities in the market arrangements for
designated fuels.
2.18 The Government may set out, through regulations, the specific
circumstance in which liability would arise for a supplier or end user of
natural gas where the use of the natural gas is not already covered by Part 3,
Division 2 or Part 3 Division 3 of the CE Act.
Comparison of key features of new law and current law
New Law Current Law
Advance auctions of carbon units
No more than 20 million carbon units will be No more than 15 million carbon units are to
auctioned in a financial year before their be auctioned in a financial year before their
vintage year if no carbon pollution cap has vintage year if no carbon pollution cap has
been set for that vintage year. been set for that vintage year.
However, in 2013-14, up to 40 million carbon
units of the 2015-16 vintage can be auctioned
if no carbon pollution cap has been set for
2015-16.
The Regulator may only auction units of a
particular vintage, if the year in which the
auction occurs is within 36 months of the
relevant vintage year
Changes to the treatment of relinquished carbon units
If a carbon unit is relinquished, it is cancelled. If a relinquished carbon unit has a vintage
If its vintage year is a flexible charge year, a year that is a flexible charge year, then it is
new carbon unit will be issued by the transferred to the Commonwealth relinquished
Regulator. units account. There would be secondary
market auctions of relinquished carbon units.
Amendments to the NGER Act
The Minister's determination making power is The Minister may determine, by legislative
extended to include methods for measuring instrument, methods to measure and ascertain
fuels for the purposes of ascertaining potential greenhouse gas emissions, energy
greenhouse gas emissions. In addition, the consumption and production and emission
Minister may determine a method for reductions, removals and offsets.
adjusting a person's PEN relating to potential
greenhouse gas emissions.
An executive officer of the corporation Applications for registration and reporting
54
Chapter 2: Other Amendments
New Law Current Law
making the application may sign-off on transfer certificates must have approval from
applications for registration and reporting the chief executive officer of the corporation
transfer certificates. making the application.
Changes to the treatment of some natural gas supply and use arrangements gas
Regulations may set out the circumstances in Liability arises under the natural gas supply
which liability applies to a natural gas end provisions where natural gas is supplied and it
user or natural gas supplier where natural gas is withdrawn from a natural gas supply
is used and the use is not covered by the pipeline for use. Alternatively it can arise
existing direct emitter or natural gas supply where it counts towards a facility's direct
provisions. emissions.
Liability can apply to a natural gas supplier, a
person who is a liable entity for a large gas
consuming facility or a person who quotes the
person's OTN for natural gas supplied to
them.
The Opt-in Scheme eligibility test
The eligibility test that must be passed for a The eligibility test that must be passed for a
designated opt-in person to be liable for the designated opt-in person to be liable for the
potential emissions embodied in an amount of potential emissions embodied in an amount of
fuel includes both GST joint venture fuel is limited to GST joint venture
participants and GST joint venture operators. participants.
Detailed explanation of new law
Preliminaries
2.19 Schedule 1, Parts 1 and 3, which make general amendments to the
ANREU Act and the CE Act, will commence on the day after the bill
receives the Royal Assent. [Clause 2, Clean Energy Amendment (International
Emissions Trading and Other Measures) Bill 2012]
2.20 Schedule 1, Part 2, of the bill which makes amendments relating
to fuel to the CE Act and the NGER Act, will commence on 1 July 2013.
The amendments to the NGER Act made by this Part apply to reports
relating to the 2012-13 financial year and all subsequent years. [Clause 2,
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill
2012]
Advance auctions of carbon units
2.21 The limit on advance auctioned units under section 101 of the
CE Act is increased so that the Regulator can auction: [Item 50, section 101, CE
Act] [Item 51, section 101, CE Act] [Item 52, section 101, CE Act]
· up to 40 million units of the 2015-16 vintage in 2013-14, if
no carbon pollution cap is in place for 2015-16; and
55
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
· up to 20 million carbon units of a particular vintage before
their vintage year, if no carbon pollution cap is in place for
that vintage year.
2.22 The Regulator may not auction units of a particular vintage,
unless the year in which the auction occurs is within 36 months of the
relevant vintage year. [Item 53, section 101, CE Act]
Changes to the treatment of relinquished carbon units
2.23 As relinquished carbon units will be cancelled rather than
auctioned, section 112 of the CE Act, which provides for auctions of
relinquished carbon units, is repealed. [Item 60, section 112, CE Act] References
to section 112 of the CE Act are no longer required and are removed from
section 113(2) and subsection 102(3) of the CE Act. [Item 57, section 102, CE
Act] [Items 61-64, section 113, CE Act] As it is no longer required, there will no
longer be a Commonwealth relinquished units account. [Item 31, section 5, CE
Act]
2.24 All relinquished units will be cancelled. Relinquished carbon
units with a flexible charge vintage year will be cancelled and a new carbon
unit will be subsequently auctioned in its place. [Item 77, section 210, CE Act]
2.25 To ensure that carbon unit supply is not affected by changes to the
treatment of relinquished units, section 102 of the CE Act is amended so
that the total number of carbon units issued by the Regulator takes into
account the number of relinquished units. [Item 54, section 102, CE Act] [Item
55, section 102, CE Act] [Item 56, section 102, CE Act]
2.26 In particular, the number of carbon units with a particular vintage
year that are issued by the Regulator will be equal to the total of: [Item 54,
section 102, CE Act] [Item 55, section 102, CE Act] [Item 56, section 102, CE Act]
· the carbon pollution cap number for that year;
· the total number of carbon units with the corresponding
vintage year that were relinquished before the start of the
relevant vintage year; and
· the total number of carbon units with the relevant vintage
year or an earlier vintage year that were relinquished during
the relevant vintage year.
2.27 This approach ensures that if a carbon unit is relinquished, a new
carbon unit will be issued, even if there will be no further auctions
corresponding to the vintage year of that carbon unit.
Amendments relating to measuring amounts of designated fuels for the
purpose of ascertaining potential greenhouse gas emissions
2.28 Complex commercial arrangements in markets for designated
fuels can lead to difficulties in measuring amounts of fuel and therefore
56
Chapter 2: Other Amendments
ascertaining potential greenhouse gas emissions embodied in an amount of
fuel. Specifically:
· In the natural gas market there are time delays associated
with the incorporation of natural gas supply meter readings
into financial accounts. This delay means that reconciliation
of accounts and meters are often required. These
reconciliations may occur sometime after supply takes place.
· A key component of determining opt-in eligibility for taxable
fuels is the entity's entitlement to a fuel tax credit for fuel
acquisition, manufacture or import. Entitlement to a fuel tax
credit is affected by the sector in which the fuel is used. This
creates complexities where the fuel is not used (or the type of
use is not known) until the following eligible financial year.
2.29 To account for these commercial complexities, the Minister's
power to determine, by disallowable legislative instrument, the methods for
measuring amounts of emissions and energy is expanded to include the
capacity to determine methods for measuring fuels for the purposes of
ascertaining potential greenhouse gas emissions. Additionally, the Minister
has the power to determine adjustments to a person's `provisional emissions
number' (PEN) relating to potential greenhouse gas emissions. The
purpose of the original determination-making power, and these amendments
is to ensure the transparency, comparability, accuracy and completeness of
reporting under the National Greenhouse and Energy Reporting System.
2.30 Under section 10 of the NGER Act, the Minister may determine
methods, or criteria for methods, for measuring amounts of designated fuel
for the purposes of ascertaining potential greenhouse gas emissions. This
includes the capacity to determine methods for measuring natural gas,
taxable fuel, liquefied natural gas, or liquefied petroleum gas. This means
that the Minister can include measurement methods in the National
Greenhouse and Energy Reporting (Measurement) Determination 2008 for
natural gas and opt-in scheme fuels to quantify potential greenhouse gas
emissions. The Minister may also determine that different measurement
criteria apply under different circumstances.In keeping with existing
determinations under section 10 of the NGER Act, this determination is a
legislative instrument for the purposes of the Legislative Instruments Act
2003 and is a disallowable instrument. [Item 92, section 10, NGER Act] [Item 93,
subsection 10(5), NGER Act]
2.31 The Minister may also determine adjustments to a person's PEN,
where that PEN results from a provision under Divisions 3 or 3A of Part 3
of the CE Act or in the Opt-in Scheme.11
11
Note that the Regulations establishing the Opt-in Scheme under Part 3, Division 7 of the
CE Act are yet to be made.
57
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
2.32 Where a person's PEN in the previous eligible financial year is
found to exceed the actual PEN for that year, if for example due to full
activity data not being available, the PEN in the current eligible financial
year may be reduced to reflect the previous year's discrepancy. Reductions
to a person's PEN can only occur where conditions specified in the
determination are satisfied and where the person's PEN reported in the
previous eligible financial year was less than the actual PEN resulting from
the actual amount of designated fuel supplied, acquired, manufactured or
imported in that year. [Item 93, subsection 10(6), NGER Act]
2.33 Similarly, where a person's PEN in the previous eligible financial
year is found to be less than the actual PEN for that year, if for example due
to full activity data not being available, the PEN in the current eligible
financial year may be increased to reflect the previous year's discrepancy.
Increases to a person's PEN can only occur where conditions specified in
the determination are satisfied and where the person's PEN reported in the
previous eligible financial year was greater than the actual PEN resulting
from the actual amount of designated fuel supplied, acquired, manufactured
or imported in that year. [Item 93, subsection 10(8), NGER Act]
2.34 The power to adjust PENs is limited as for both positive and
negative adjustments to a person's PEN; the adjustment cannot be more
than the amount of the discrepancy in the previous eligible financial year.
The intent is to allow persons in situations that satisfy the conditions
specified in the determination to reconcile fuel amounts between eligible
financial years and not be subject to a shortfall charge. [Item 93, subsections
10(7)-10(9), NGER Act]
Example 2.1 Indicative example of how a PEN may be adjusted
In 2013-14 a natural gas supplier (IVY Corp) reported its PEN to be
50,000, based on the methods included in the Minister's Determination
for measuring the amount of natural gas supplied. In 2014-15 IVY
Corp ascertains that its 2013-14 PEN is 55,000 based on the amount of
natural gas actually supplied. IVY Corp calculates its 2014-15
unadjusted PEN to be 60,000. Once adjusted, IVY Corp's 2014-15
PEN is 65,000, noting that the details regarding adjustment will be set
out in the Minister's Determination.
2.35 To facilitate these adjustments, the definition of `provisional
emission number' has been amended in section 5 of the CE Act to refer to
the adjustment provisions included in the amended NGER Act. [Item 84,
section 5, CE Act]
2.36 `Liquefied natural gas' and `liquefied petroleum gas' are defined
to have the meanings given in Regulation 1.03 of the National Greenhouse
and Energy Reporting Regulations 2008.12 `Taxable fuel' is defined in
12
Liquified petroleum gas is, in turn, defined by reference to subsection 3 (1) of the Excise
Tariff Act 1921.
58
Chapter 2: Other Amendments
section 5 of the CE Act to have the same meaning as in section 110-5 of the
Fuel Tax Act 2006. The terms `natural gas supplier', `Opt-in scheme',
`OTN' and `supply' are all defined in section 5 of the CE Act. [Item 85,
section 7, NGER Act] [Item 86, section 7, NGER Act] [Item 87, section 7, NGER Act]
[Item 88, section 7, NGER Act] [Item 89, section 7, NGER Act] [Item 90, section 7,
NGER Act] [Item 91, section 7, NGER Act]
2.37 The amendments to sections 7 and 10 of the NGER Act apply
from 1 July 2013. Therefore, no adjustments are possible for PENs,
preliminary emission numbers or interim emission numbers that relate to
the 2012-13 eligible financial year. [Item 94, timing of application of amendments,
NGER Act]
Changes to application signoff under the NGER Act
2.38 Currently, applications for registration and reporting transfer
certificates must have approval from the chief executive officer of the
corporation making the application. This requirement is altered to provide
that approval from an executive officer of the corporation is sufficient for
the purposes of registration and reporting transfers. An `executive officer'
is defined in section 7 of the NGER Act to include a broader category of
senior officers of a body corporate, including directors, the chief financial
officer and the secretary of a body corporate. Allowing an executive officer
to sign-off on applications for registration and reporting transfers,
streamlines the application process and aligns corporate sign off with other
parts of the National Greenhouse and Energy Reporting System. [Item 83A,
subsection 12(3), NGER Act] [Item 83B, subsection 12K(5)(d)(iii), NGER Act] [Section
2, Clean Energy Amendment (International Emissions Trading and Other Measures) Bill
2012]
Changes to the treatment of some natural gas supply and use
arrangements
2.39 Currently, liability arises under Part 3 Division 3 of the CE Act,
where natural gas is supplied and it is withdrawn from a natural gas supply
pipeline for use. Alternatively liability can arise where emissions from the
use of natural gas count towards a facility's direct emissions under Part 3,
Division 2 of the CE Act. Liability can apply to a natural gas supplier, a
person who is a liable entity for a large gas consuming facility or a person
who quotes the person's OTN for natural gas supplied to them.
2.40 Currently, there is the potential for certain commercial
arrangements to lead to situations which may not be captured by the current
provisions of the CE Act concerning emissions embodied in natural gas.
Regulations may set out the circumstances in which liability applies to a
supplier or end user in specific circumstances, enabling the Government to
maintain competitive neutrality across the industry by supporting the
complete coverage of natural gas under the carbon pricing mechanism. The
specific provisions would be consistent with the current natural gas
provisions in that liability would arise where the use of the natural gas
results in greenhouse gas emissions. These specific regulations would
59
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
refect the commercial arrangements in place from time to time, ensuring
that the maximum amount of natural gas is covered by the carbon pricing
mechanism, consistent with the principle that all emissions embodied in
natural gas should be covered, and opportunities to develop new
commercial arrangements to avoid liability are minimised. Please note that
the amendments concerning the treatment of natural gas do not take effect
unless necessary regulations are made and the Government would consult
on the development of any such regulations prior to their being
recommended to the Governor-General-in-Council.
2.41 New Sections 35A and 35B of the CE Act allow the Government,
through a regulation, to apply liability to a natural gas supplier or end user
respectively. In making any necessary regulations, consideration would be
given to the administrative efficiency of placing the liability on either the
supplier or end user. [Item 48, section 35A, CE Act] [Item 48, section 35B, CE Act]
The regulation would be a legislative instrument for the purposes of the
Legislative Instruments Act 2003 and is a disallowable instrument.
2.42 Where natural gas is supplied and no liability has arisen from
that or any previous supply of the natural gas under sections 33 and 35 of
the CE Act, and there is a reasonable expectation that no liability will arise
from the use of natural gas as a result of Part 3, Division 2 of the CE Act,
liability may be placed on the natural gas supplier under new section 35A of
the CE Act. Regulations may specify an eligible financial year or years in
which these arrangements would apply. To provide parties with sufficient
notice regarding these arrangements, the specified eligible financial year
must be later than the financial year in which the regulations are registered
under the Legislative Instruments Act 2003. [Item 48, section 35A, CE Act].
Liability would apply to a natural gas supplier if:
· it supplies natural gas;
· no liability has arisen as a result of sections 33 or 35 of the
CE Act;
· the supplier does not reasonably expect use of the natural gas
will be covered by the direct emitter provisions in Part 3,
Division 2 of the CE Act at the time the gas is supplied; and
· the conditions in the regulations are satisfied.
2.43 In certain circumstances, natural gas suppliers may not have
sufficient information to determine the intended use of the gas supplied.
For example, a supplier may not be reasonably expected to know the
intended use of natural gas supplied to a person at an inlet flange of a
natural gas supply pipeline where that person arranges their own transport
of the gas. So that a supplier may form a reasonable expectation that the
natural gas is supplied for use and know the amount supplied for use, an
`own-use notification' and a `follow-up notification' from the end user
could be required as conditions in the regulations. Further information
60
Chapter 2: Other Amendments
about own-use notifications and follow-up notifications is set out in
paragraphs 2.44 to 2.48 below. [Item 48, subsection 35A(1)(d), CE Act] The
definition of `accept' in section 5 of the CE Act has been updated to reflect
these changes to the treatment of natural gas suppliers. [Item 27A, section 5,
CE Act]
2.44 If an own-use notification were to apply, the supplier could have a
preliminary emissions number for the embodied emissions in the whole
amount of natural gas supplied. The sum of preliminary emissions numbers
for a supplier is a PEN, but this can be reduced by netted out numbers. A
supplier may have a netted-out number where a follow-up notification has
been provided by the end user to its supplier to report the amount of natural
gas applied to own use. The remainder of the natural gas supplied, not
subject to the follow-up notification, would be the netted-out number. [Item
48, section 35A, CE Act]
2.45 The Government may make regulations that allow or require a
person to give an own-use notification to their natural gas supplier. This
could allow or require the person to notify their supplier and therefore have
liability for the natural gas rest with the supplier. This facilitates the
application of liability to a supplier where, in the absence of such a
notification, they could not readily form an expectation that the natural gas
is supplied for use or know the portion of a supply which is for the person's
use. [Item 35, section 5, CE Act] [Item 49, sections 64A-64C, CE Act]
2.46 Regulations may be made that allow or require a supplier to
accept an own-use notification from their customer. This could allow or
require the supplier to accept the notification of own use and therefore have
liability for the natural gas rest with the supplier. Where conditions in the
regulations are satisfied, this could allow the supplier to effectively reject
an own-use notification. [Item 35, section 5, CE Act] [Item 49, sections 64D-64E,
CE Act]
2.47 A person must not provide an own-use notification if they are not
permitted or required to do so under section 64A or 64B of the CE Act. If a
person provides an own-use notification where they are not permitted or
required to do so, then the own-use notification is taken not to have been
given. This limitation is provided to avoid the risk of misuse of an own-use
notification, where the misuse could lead to avoidance of liability. [Item 49,
section 64F, CE Act]
2.48 To ensure that such misuse does not occur, a person is also liable
to pay a civil penalty if a court finds that the person has provided an own-
use notification and they are not permitted or required to do so by the
CE Act (see paragraphs 2.56 to 2.58 below). [Item 49, section 64F(3), CE Act]
2.49 Regulations may be made that allow a person to give a follow-up
notification to their natural gas supplier in relation to a supply of natural gas
which is subject to an own-use notification. This could allow the person to
inform their supplier of the amount of natural gas taken for own use. A
61
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
supplier would not have the ability to not accept a follow-up notification.
[Item 33B, section 5, CE Act] [Item 49, sections 64G-64H, CE Act]
2.50 A person must not provide a follow-up notification if they are not
permitted or required to do so under section 64G of the CE Act. If a person
provides a follow-up notification where they are not permitted or required
to do so, the follow-up notification is taken not to have been given. This
limitation is provided to avoid the risk of misuse of a follow-up notification,
where the misuse could lead to avoidance of liability. [Item 49, section 64J, CE
Act] To ensure that such misuse does not occur, a person is also liable to pay
a civil penalty if a court finds that the person has provided a `follow-up'
notification and they are not permitted or required to do so by the CE Act
(see paragraphs 2.56 to 2.58 below). [Item 49, section 64J(3), CE Act]
2.51 Where a supplier has a liability under section 35A and an own-use
notification is provided in relation to an amount of natural gas, or the
conditions in the regulations are satisfied, the emissions attributable to the
gas do not count under sections 20 to 25 of the CE Act. This ensures
liability does not arise for both the supplier and user of the gas. However,
the amount of natural gas associated with the own-use notification does
count for the purposes of determining whether a facility meets relevant
thresholds for liability. [Item 42, section 20, CE Act] [Item 43, section 21, CE Act]
[Item 44, section 22, CE Act] [Item 45, section 23, CE Act] [Item 46, section 24, CE Act]
[Item 47, section 25, CE Act]
2.52 Section 5 of the CE Act defines supply as supply (including
re-supply) by way of sale, exchange or gift. Regulations can determine
whether there is or is not a supply of natural gas for the purposes of new
section 35A of the CE Act. It allows an act or circumstance, which might
be combination of acts and conditions, to constitute a supply. New section
35A of the CE Act will generally operate consistently with the commercial
arrangements that industry would consider constitutes a supply natural gas.
For example, the transfer of title from an owner or operators of natural gas
supply pipelines to an end user for the purpose of providing pipeline service
would not generally be considered a supply. In such circumstances another
entity such as a producer or retailer of natural gas would typically be
considered to be making a supply to the end user. [Item 37, section 5, CE Act]
[Item 38, section 5, CE Act] [Item 39, section 5A, CE Act]
2.53 To provide sufficient notice of any changed arrangements to
affected liable entities, the Government may make regulations which
specify an eligible financial year or years in which these arrangements
would apply. The specified eligible financial year must be later than the
financial year in which the regulations are registered under the Legislative
Instruments Act 2003. [Item 37, section 5, CE Act] [Item 38, section 5, CE Act]
[Item 39, section 5A, CE Act] The regulation would be a legislative instrument
for the purposes of the Legislative Instruments Act 2003 and is a
disallowable instrument.
62
Chapter 2: Other Amendments
2.54 Section 6 of the CE Act specifies when supply of natural gas
occurs. Currently regulations made for the purpose of the existing
definition of supply provide for supply to occur in reference to the time of
withdrawal. As new section 5A of the CE Act provides for modifying the
definition of supply for the purposes of new section 35A of the CE Act, and
as the concept of withdrawal might not apply in 35A, the regulations will
need to determine when a supply of natural gas occurs in relation to section
35A.
2.55 To provide sufficient notice of any changed arrangements to
affected liable entities, the Government may make regulations which
specify an eligible financial year or years in which these arrangements
would apply. The specified eligible financial year must be later than the
financial year in which the regulations are registered under the Legislative
Instruments Act 2003. [Item 40, section 6, CE Act] [Item 41, section 6, CE Act] The
regulation would be a legislative instrument for the purposes of the
Legislative Instruments Act 2003 and is a disallowable instrument.
2.56 Where no liability has arisen from the use of natural gas as a
result of Part 3, Division 2 or sections 33 and 35 or new section 35A of the
CE Act, liability may be placed on the natural gas end user under new
section 35B of the CE Act. Liability would apply to a person where natural
gas is applied to a person's own use if: [Item 48, section 35B, CE Act]
· no liability has arisen as a result of sections 33 or 35 or new
section 35A of the CE Act;
· use of the natural gas will not be covered by the direct
emitter provisions in Part 3, Division 2 of the CE Act; and
· the conditions in the regulations are satisfied.
2.57 To provide sufficient notice of any changed arrangements to
affected liable entities, the Government may make regulations which
specify an eligible financial year or years in which these arrangements
would apply. The specified eligible financial year must be later than the
financial year in which the regulations are registered under the Legislative
Instruments Act 2003. [Item 48, section 35B, CE Act] The regulation would be
a legislative instrument for the purposes of the Legislative Instruments Act
2003 and is a disallowable instrument.
Civil penalties and infringement notices
2.58 New sections 64B, 64D, 64E, 64F and 64J of the CE Act are
covered by existing civil penalty provisions in Part 17 of the CE Act.
Subsection 252(4) of the CE Act provides that the pecuniary penalty
payable by a body corporate must not exceed 10,000 penalty units
(currently $1.1 million) for each contravention of a civil penalty
provision. Subsection 252(6) of the CE Act provides that the pecuniary
penalty payable by a person other than a body corporate must not exceed
2,000 penalty units (currently $220,000) for each contravention. The
63
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
maximum levels of civil penalties reflect the seriousness of the
contraventions and represent clear and strong disincentives for non-
compliance. Any civil penalties provided for in the CE Act are
maximums and any penalty that may be imposed by a court will be
determined according to the circumstances of the particular case. The
integrity of the carbon pricing mechanism could be compromised by liable
entities or other market participants acting in a manner that is designed to
avoid liability or mislead the Regulator by misusing the natural gas
notification provisions. For further information about the application of
civil penalties under the CE Act see paragraphs 7.73 to 7.94 of the
Revised Explanatory Memorandum to the Clean Energy Bill 2011. [Item
49, new section 64B(3), CE Act] [Item 49, new section 64D(3), CE Act] [Item 49, new
section 64E(3), CE Act] [Item 49, new section 64F(3), CE Act] [Item 49, new section
64J(3), CE Act]
2.59 As a civil penalty applies to misusing the natural gas notification
provisions, a person may also be the subject of an infringement notice
under Part 18 of the CE Act. The applicable infringement notice penalty
would be 2,000 penalty units (currently $220,000) for a corporation or
400 penalty units (currently $44,000) for any other person. For further
information about the application of infringement notices under the CE
Act see paragraphs 7.58 to 7.72 of the Revised Explanatory Memorandum
to the Clean Energy Bill 2011.
2.60 In a proceeding for a civil penalty order against a person for
misusing the natural gas notification provisions, it is not necessary to
prove that person's state of mind, including the person's intention,
knowledge, recklessness, negligence or any other state of mind under
section 262 of the CE Act. Implicit in this is a reasonable expectation that
those subject to the provision will take steps to prevent inadvertent
contraventions. [Item 78, subsections 262(1)(ma)-262(1)(me), CE Act]
Changes to the Opt-in Scheme eligibility test
2.61 The Opt-in Scheme is to be set out in regulations. A person who
meets the Opt-in Scheme's criteria can choose to have emissions from
specified liquid fuels covered directly under the carbon pricing
mechanism instead of paying an equivalent carbon price through the fuel
tax system. The amendments augment the existing provisions of Part 3,
Division 7 of the CE Act.13
2.62 The eligibility test that must be passed by a designated opt-in
person for that person to be liable for the potential emissions embodied in
an amount of fuel makes reference to three classes of persons: members of
13
A description of the Opt-in Scheme is set out in paragraphs 1.216 to 1.232 of the Revised
Explanatory Memorandum to the Clean Energy Bill 2011 and paragraphs 1.24 to 1.43 of the
64
Chapter 2: Other Amendments
a GST group, participants in a GST joint venture, and persons that are
entitled to fuel tax credits for the fuel.
2.63 To provide consistency and clarity for all GST joint ventures,
the eligibility test for the Opt-in Scheme is amended to include an explicit
reference to GST joint venture operators as well as GST joint venture
participants. [Item 49A, section 92A, CE Act] [Item 49B, section 92A, CE Act] [Item
49C, section 92A, CE Act] [Item 49D, section 92A, CE Act]
65
Index
Clean Energy Amendment (International Emissions Trading
and Other Measures) Bill 2012
Bill reference Paragraph number
Clause 1, Clean Energy Amendment (International Emissions 1.20
Trading and Other Measures) Bill 2012
Clause 2, Clean Energy Amendment (International Emissions 1.22, 2.19, 2.20
Trading and Other Measures) Bill 2012
Clause 3, Clean Energy Amendment (International Emissions 1.21
Trading and Other Measures) Bill 2012
Item 2, section 4, ANREU Act 1.68
Item 2A, section 4, ANREU Act 1.130
Item 3, section 4, ANREU Act 1.63
Item 5, section 4, ANREU Act 1.30, 1.31
Item 6, section 4, ANREU Act 1.30
Item 7, section 4, ANREU Act 1.87
Item 8, section 4, ANREU Act 1.62, 1.87
Item 9, section 4, ANREU Act 1.62, 1.87
Item 10, section 4, ANREU Act 1.68
Item 12, section 4, ANREU Act 1.32, 1.68
Item 13, section 4, ANREU Act 1.32, 1.68
Item 13A, section 4, ANREU Act 1.109
Item 14, section 4, ANREU Act 1.88
Item 15, subsection 21(1), ANREU Act 1.87
Item 16, section 48, ANREU Act 1.67
Item 17, section 48, ANREU Act 1.67
Item 18, section 48, ANREU Act 1.67
Item 18, section 48A, ANREU Act 1.68
Item 18, section 48B, ANREU Act 1.69
Item 18, section 48E, ANREU Act 1.105
Item 18, subsection 48C(1), ANREU Act 1.69
Item 18, subsection 48C(2), ANREU Act) 1.69
67
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Bill reference Paragraph number
Item 18, subsection 48C(3), ANREU Act 1.69
Item 18, subsection 48D(1), ANREU Act 1.71
Item 18, subsection 48D(2), ANREU Act 1.71
Item 18, subsection 48D(3), ANREU Act 1.71
Item 18, subsection 48E(2), ANREU Act 1.74
Item 18, subsection 48E(4), ANREU Act 1.105
Item 19, section 57, ANREU Act 1.76
Item 20, section 57, ANREU Act 1.76
Item 21, section 59A, ANREU Act 1.109
Item 22, section 61, ANREU Act 1.110
Item 22, subsections 61(5)-(6), ANREU Act 1.110
Item 22A, section 63B, ANREU Act 1.112
Item 22A, section 63C, ANREU Act 1.114
Item 22A, section 63D, ANREU Act 1.112, 1.113
Item 22A, section 63E, ANREU Act 1.112
Item 22A, section 63F, ANREU Act 1.114
Item 22A, section 63G, ANREU Act 1.112, 1.113
Item 23, section 66A, ANREU Act 1.83
Item 23, section 66C, ANREU Act 1.90
Item 23, section 66D, ANREU Act 1.92, 1.93
Item 23, section 66E, ANREU Act 1.94
Item 23, section 66F, ANREU Act 1.95
Item 23, section 66G, ANREU Act 1.95
Item 23, section 66H, ANREU Act 1.99
Item 23, section 66J, ANREU Act 1.100
Item 23, section 66K, ANREU Act 1.100
Item 23, section 66N, ANREU Act 1.102
Item 23, sections 66B-66C, ANREU Act 1.89
Item 23, sections 66L-66M, ANREU Act 1.101
Item 23, subsection 66G(2), ANREU Act 1.97
Item 23, subsections 66A(3)-(4), ANREU Act 1.84
Item 24, section 79, ANREU Act 1.107
Item 25, section 79, ANREU Act 1.107
Item 26, line 16 at the end of the table, ANREU Act 1.98
Item 26, section 82, ANREU Act 1.85
Item 27, subsection 86A(1)(a), 86A(2), ANREU Act 1.63
68
Index
Bill reference Paragraph number
Item 27, subsection 86A(1)(b), ANREU Act 1.66
Item 27, subsection 86A(4) 1.64
Item 27, subsections 86A(4), 86A(5), ANREU Act 1.64
Item 27A, section 5, CE Act 2.43
Item 28, section 5, CE Act 1.119
Item 29, section 5, CE Act 1.128
Item 29A, section 5, CE Act 1.68
Item 30, section 5, CE Act 1.135
Item 31, section 5, CE Act 2.23
Item 32, section 5, CE Act 1.36
Item 33, section 5, CE Act 1.36
Item 33A, section 5, CE Act 1.30
Item 33B, section 5, CE Act 2.49
Item 34, section 5, CE Act 1.34
Item 35, section 5, CE Act 2.45, 2.46
Item 36, section 5, CE Act 1.131
Item 37, section 5, CE Act 2.52, 2.53
Item 38, section 5, CE Act 2.52, 2.53
Item 39, section 5A, CE Act 2.52, 2.53
Item 40, section 6, CE Act 2.55
Item 41, section 6, CE Act 2.55
Item 42, section 20, CE Act 2.51
Item 43, section 21, CE Act 2.51
Item 44, section 22, CE Act 2.51
Item 45, section 23, CE Act 2.51
Item 46, section 24, CE Act 2.51
Item 47, section 25, CE Act 2.51
Item 48, section 35A, CE Act 2.41, 2.42, 2.44
Item 48, section 35B, CE Act 2.41, 2.56
Item 48, subsection 35A(1)(d), CE Act 2.43
Item 49, new section 64B(3), CE Act 2.58
Item 49, new section 64D(3), CE Act 2.58
Item 49, new section 64E(3), CE Act 2.58
Item 49, new section 64F(3), CE Act 2.58
Item 49, new section 64J(3), CE Act 2.58
Item 49, section 64F(3), CE Act 2.48
69
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Bill reference Paragraph number
Item 49, section 64F, CE Act 2.47
Item 49, section 64J(3), CE Act 2.50
Item 49, section 64J, CE Act 2.50
Item 49, sections 64A-64C, CE Act 2.45
Item 49, sections 64D-64E, CE Act 2.46
Item 49, sections 64G-64H, CE Act 2.49
Item 49A, section 92A, CE Act 2.63
Item 49B, section 92A, CE Act 2.63
Item 49C, section 92A, CE Act 2.63
Item 49D, section 92A, CE Act 2.63
Item 50, section 101, CE Act 2.21
Item 51, section 101, CE Act 2.21
Item 52, section 101, CE Act 2.21
Item 53, section 101, CE Act 2.22
Item 54, section 102, CE Act 2.25, 2.26
Item 55, section 102, CE Act 2.25, 2.26
Item 56, section 102, CE Act 2.25, 2.26
Item 57, section 102, CE Act 2.23
Item 58, section 111, CE Act 1.121
Item 59, subsection 111(6), CE Act 1.123
Item 60, section 112, CE Act 2.23
Items 61-64, section 113, CE Act 2.23
Item 61, subsection 113(2)(m), CE Act 1.124
Item 62, subsection 113(2)(r), CE Act 1.124
Item 63, subsection 113(2)(r), CE Act 1.124
Item 64, subsection 113(2)(s), CE Act 1.124
Item 65, section 121, CE Act 1.118
Item 66, section 121, CE Act 1.118
Item 67, section 121, CE Act 1.118
Item 67A, subsection 123(1A), CE Act 1.42
Item 67B, subsection 123(2), CE Act 1.42
Item 68, subsection 123(2) CE Act 1.43
Item 69, section 123A, CE Act 1.34, 1.36, 1.45
Item 69, subsection 123A(1), CE Act 1.39
Item 69, subsection 123A(10), CE Act 1.42
Item 69, subsection 123A(11) CE Act 1.43
70
Index
Bill reference Paragraph number
Item 69, subsection 123A(11), CE Act 1.41
Item 69, subsection 123A(2), CE Act 1.37
Item 69, subsection 123A(3), CE Act 1.38
Item 69, subsection 123A(4), CE Act 1.40
Item 69, subsection 123A(5), CE Act 1.40
Item 69, subsection 123A(8), CE Act 1.46
Item 69, subsection 123A(9), CE Act 1.46
Item 69, subsections 123A(1)-123A(5), CE Act 1.39
Item 70, section 124, CE Act 1.117
Item 71, subsection 133(7), CE Act 1.51
Item 71, subsection 133(7A), CE Act 1.51
Item 71, subsection 133(7B)(b), CE Act 1.57
Item 71, subsection 133(7B), CE Act 1.49, 1.56
Item 71, subsection 133(7C), CE Act 1.37, 1.58
Item 71, subsection 133(7D), CE Act 1.49, 1.55, 1.59
Item 71, subsection 133(7E)(e), CE Act 1.52
Item 71, subsection 133(7E), CE Act 1.35, 1.50, 1.59
Item 71, subsection 133(7F)(f), CE Act 1.52
Item 71, subsection 133(7F), CE Act 1.50, 1.59
Item 71, subsection 133(7G)(a), CE Act 1.53
Item 71, subsection 133(7G)(b), CE Act 1.54
Item 72, subsections 196(1AA)-(1AB), CE Act 1.135, 1.136
Item 73, subsection 196(1), CE Act 1.135
Item 74, subsection 196(1A), CE Act 1.135
Item 75, subsection 196(2A), CE Act 1.135
Item 76, section 196A (17), CE Act 1.152
Item 76, section 196A (18), CE Act 1.152
Item 76, section 196A, CE Act 1.131
Item 76, subsection 196A(1), CE Act 1.134
Item 76, subsection 196A(10), CE Act 1.140
Item 76, subsection 196A(11), CE Act 1.141
Item 76, subsection 196A(12), CE Act 1.147
Item 76, subsection 196A(13), CE Act 1.149
Item 76, subsection 196A(14), CE Act 1.150
Item 76, subsection 196A(15), CE Act 1.151
Item 76, subsection 196A(2), CE Act 1.142
71
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Bill reference Paragraph number
Item 76, subsection 196A(3), CE Act 1.143
Item 76, subsection 196A(4), CE Act 1.145, 1.146
Item 76, subsection 196A(5), CE Act 1.137
Item 76, subsection 196A(6), CE Act 1.138
Item 76, subsection 196A(7), CE Act 1.138
Item 76, subsections 196A(8)-196A(9), CE Act 1.139
Item 77, section 210, CE Act 2.24
Item 78, subsections 262(1)(ma)-262(1)(me), CE Act 2.60
Item 79, section 288, CE Act 1.120, 1.127
Item 80, section 293, CE Act 1.120, 1.127
Item 81, section 307, CE Act 1.119
Item 82, section 307, CE Act 1.119
Item 83, subsections 43-8(2)(a) and 43-8(2)(b), Fuel Tax Act 1.154
Item 83A, subsection 12(3), NGER Act 2.38
Item 83B, subsection 12K(5)(d)(iii), NGER Act 2.38
Item 84, section 5, CE Act 2.35
Item 85, section 7, NGER Act 2.36
Item 86, section 7, NGER Act 2.36
Item 87, section 7, NGER Act 2.36
Item 88, section 7, NGER Act 2.36
Item 89, section 7, NGER Act 2.36
Item 90, section 7, NGER Act 2.36
Item 91, section 7, NGER Act 2.36
Item 92, section 10, NGER Act 2.30
Item 93, subsection 10(5), NGER Act 2.30
Item 93, subsection 10(6), NGER Act 2.32
Item 93, subsection 10(8), NGER Act 2.33
Item 93, subsections 10(7)-10(9), NGER Act 2.34
Item 94, timing of application of amendments, NGER Act 2.37
Item 95, CE (IUSC) Act 1.117
Clean Energy (Charges Excise) Amendment Bill 2012
Bill reference Paragraph number
Clause 1, Clean Energy (Charges-Excise) Amendment Bill 2012 1.24
72
Index
Clause 2, Clean Energy (Charges-Excise) Amendment Bill 2012 1.23
Clause 3, Clean Energy (Charges-Excise) Amendment Bill 2012 1.21
Item 1, section 3, CE (Charges-Excise) Act 1.122
Item 2, section 8, CE (Charges-Excise) Act 1.122
Item 3, subsection 8(4), CE (Charges-Excise) Act 1.123
Clean Energy (Charges-Customs) Amendment Bill 2012
Bill reference Paragraph number
Clause 1, Clean Energy (Charges-Customs) Amendment Bill 2012 1.25
Clause 2, Clean Energy (Charges-Customs) Amendment Bill 2012 1.23
Clause 3, Clean Energy (Charges-Customs) Amendment Bill 2012 1.21
Item 1, section 3, CE (Charges-Customs) Act 1.122
Item 2, section 8, CE (Charges-Customs) Act 1.122
Item 3, subsection 8(4), CE (Charges-Customs) Act 1.123
Excise Tariff Amendment (Per-tonne Carbon Price Equivalent)
Bill 2012
Bill reference Paragraph number
Clause 1, The Excise Tariff Amendment (Per-tonne Carbon Price 1.26
Equivalent) Bill 2012
Clause 2, The Excise Tariff Amendment (Per-tonne Carbon Price 1.23
Equivalent) Bill 2012
Clause 3, Excise Tariff Amendment (Per-tonne Carbon Price 1.21
Equivalent) Bill 2012
Items 1-4, section 3, 6FA(3), 6FB(3), Excise Tariff Act 1.154
Ozone Protection and Synthetic Greenhouse Gas (Import
Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012
Bill reference Paragraph number
Clause 1, The Ozone Protection and Synthetic Greenhouse Gas 1.27
(Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012
73
Clean Energy Amendment (International Emissions Trading and Other Measures) Bill 2012
and related bills
Bill reference Paragraph number
Clause 2, The Ozone Protection and Synthetic Greenhouse Gas 1.23
(Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012
Clause 3, The Ozone Protection and Synthetic Greenhouse Gas 1.21
(Import Levy) Amendment (Per-tonne Carbon Price Equivalent) Bill
2012
Items 1-4, section(2A), (3A), and (4A), SGG (Import Levy) Act 1.153
Ozone Protection and Synthetic Greenhouse Gas
(Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012
Bill reference Paragraph number
Clause 1, The Ozone Protection and Synthetic Greenhouse Gas 1.28
(Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012
Clause 2, The Ozone Protection and Synthetic Greenhouse Gas 1.23
(Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012
Clause 3, The Ozone Protection and Synthetic Greenhouse Gas 1.21
(Manufacture Levy) Amendment (Per-tonne Carbon Price
Equivalent) Bill 2012
Items 1-3, section (2A), (3A), SGG (Manufacture Levy) Act 1.153
Clean Energy (Unit Issue Charge-Auctions) Amendment Bill
2012
Bill reference Paragraph number
Clause 1, The Clean Energy (Unit Issue Charge-Auctions) 1.29
Amendment Bill 2012
Clause 2, The Clean Energy (Unit Issue Charge-Auctions) 1.23
Amendment Bill 2012
Clause 3, The Clean Energy (Unit Issue Charge-Auctions) 1.21
Amendment Bill 2012
Items 1-2, section 3, CE (Unit Issue Charge-Auctions) Act 1.122
Item 3, subsection 8(3), CE (Unit Issue Charge-Auctions) Act 1.122
Item 4, subsection 8(4), 10, CE (Unit Issue Charge-Auctions) Act 1.123
74