Commonwealth of Australia Explanatory Memoranda Commonwealth of Australia Explanatory Memoranda[Index] [Search] [Download] [Bill] [Help]
2008 - 2009
THE PARLIAMENT OF THE COMMONWEALTH OF AUSTRALIA
HOUSE OF REPRESENTATIVES
NATIONAL GREENHOUSE AND ENERGY REPORTING AMENDMENT BILL 2009
SUPPLEMENTARY EXPLANATORY MEMORANDUM
Amendments to be Moved on Behalf of the Government
(Circulated by authority of the Minister for Climate Change and Water,
Senator the Honourable Penny Wong)
AMENDMENTS TO THE NATIONAL GREENHOUSE AND ENERGY REPORTING AMENDMENT BILL
2009
OUTLINE
This amendment will enable the voluntary transfer of reporting obligations
of a facility specified under the National Greenhouse and Energy Reporting
Act 2007 (the NGER Act) from a controlling corporation where one member of
its group has operational control of the facility to another member of a
different corporate group that has financial control of the facility. It is
intended that the entity taking on reporting obligations be a
constitutional corporation consistent with the current coverage of the NGER
Act.
The process for the transfer of reporting obligations is to be formalised
with the introduction of the 'Reporting Transfer Certificate' (RTC)
concept. Corporations that have financial control of a facility that is
under the operational control of another member of a different controlling
corporation and meets specified criteria, may apply to the Greenhouse and
Energy Data Officer (the GEDO) for an RTC.
All reporting, record keeping obligations and compliance measures under the
NGER Act, including reporting of greenhouse gas emissions, energy
production and energy consumption data, in relation to the facility for
which an RTC is issued are subsequently transferred to the holder of the
certificate.
The proposed provisions will closely reflect the existing Category B
Liability Transfer Certificate (LTC) provisions outlined in the Carbon
Pollution Reduction Scheme (CPRS) Bill 2009. By design, this will promote
consistency in the terminology, concepts and rules between the existing
NGER Act reporting regime and the future CPRS, thereby ensuring a high
degree of continuity between current and future reporting arrangements.
These provisions will be voluntary, reduce administration and economic
costs on industry and increase flexibility in establishing reporting
arrangements under the NGER system prior to the deadline for reporting for
the first NGER reporting year of 2008-2009.
This government amendment to the National Greenhouse and Energy Reporting
Amendment Bill 2009 (the NGERS Bill) will also require consequential
amendments to deal with specific takeover of functions of the GEDO by
Australian Climate Change Regulatory Authority (ACCRA). These amendments
involve no new or changed policy in relation to the CPRS. They are
necessary to ensure the NGER Act operates appropriately once the relevant
provisions of the Carbon Pollution Reduction Scheme (Consequential
Amendments) Act 2009 commence on 1 July 2011.
Financial Impact Statement
The Amendment will have no financial impact and will introduce specific
reporting requirements that will reduce the reporting burden and associated
administrative and economic costs for business in advance of the deadline
for reporting for the first NGER reporting year of 2008-2009, and future
commencement of the CPRS.
NOTES ON CLAUSES
Clause 2: Commencement
1. This clause sets out that the provisions of the Bill will commence or be
taken to commence according to the table entitled 'Commencement
information'.
2. The measures in sections 1 to 3 are to commence the day after this Act
receives Royal Assent.
3. The measures in Schedule 1 are to commence on the 28th day after the day
on which this Act receives the Royal Assent.
4. The measures in Schedule 2, Part 1 are to commence the day after this
Act receives Royal Assent.
5. The measures in Schedule 2, Part 2 are to commence on the latter of the
commencement of section 3 of the Carbon Pollution Reduction Scheme Act 2009
and immediately after the commencement of Part 1 of Schedule 2 of this Act.
6. The measures in Schedule 2, Part 3 are to commence at the same time as
Part 2 of Schedule 1 to the Carbon Pollution Reduction Scheme
(Consequential Amendments) Act 2009.
SCHEDULE 2 - AMENDMENTS RELATING TO REPORTING TRANSFER CERTIFICATES
Part 1 - General Amendments
Item 1 - Section 7
7. This item defines financial control in accordance with new section 22R,
which specifies the requirements for establishing financial control.
Item 2 - Section 7
8. This item defines interim financial year. The three financial years
following commencement of the NGER Act on 1 July 2008 are defined as
interim financial years for the purposes of enabling the RTC concept. The
RTC concept is a provisional approach that will be in effect for the three
financial years (i.e. 2008-2009 to 2010-2011 NGER reporting years) leading
up to the beginning of the CPRS. RTCs will be cancelled on 30 June 2011 and
corporations with operational and financial control of the RTC facility
will need to arrange to apply for a new "Liability Transfer Certificate"
(LTC) with the ACCRA as outlined in the CPRS Bill 2009.
Item 3 - Section 7
9. This item defines reporting transfer certificate in accordance with new
section 22L, which gives meaning to the certificate which is issued to the
RTC applicant.
Item 4 - Section 7
10. This item defines reporting transfer test in accordance with new
section 22J, which outlines the criteria to be fulfilled in order for
assessment and issuing of an RTC to the applicant.
Item 5 - At the end of section 13
11. This item inserts a new subsection 13(3). The intention of this
subsection is that a facility which has an RTC in place will be disregarded
for the purpose of determining whether the group thresholds in section 13
of the NGER Act have been met.
Item 6 - After subsection 17(3)
12. This item inserts a new subsection 17(3A). This amendment requires the
GEDO to register a corporation if an RTC has been issued to the corporation
and it has not already been registered under Division 3 of the NGER Act.
Holders of an RTC will also need to be registered under the NGER Act, and
will need to come within the definition of 'registered corporation'.
To streamline the registration process and avoid RTC holders from having
to apply separately for registration, the GEDO will register them
automatically when an RTC is granted.
Item 7 Subsection 18(3)
13. This item repeals subsection 18(3) of the NGER Act and replaces it with
a new subsection 18(3). This subsection currently sets out what an
application for deregistration must contain and what matters the GEDO must
take into account when making a decision to deregister a corporation. The
new subsection will require the GEDO to be satisfied that the corporation
applying for deregistration is not the holder of a RTC.
Item 8 - At the end of subsection 19(1)
14. This item inserts new Note 3A in subsection 19(1) to allow reports
under section 19 and the new section 22G to be set out in the same
document.
Item 9 - Before subsection 19(6)
15. This item inserts a new subsection 19(5A). The effect of this insertion
is that a member of a corporation's group does not have operational control
of a facility for a given day during an interim financial year if another
person holds an RTC for that facility on that day.
Item 10 - At the end of section 22
16. This item inserts a new subsection 22(5). RTC holders have separate
reporting and record keeping obligations under Part 3E. Therefore section
22 does not apply to RTC holders.
Item 11 - Before Part 4
17. This item inserts a new Part 3E - Reporting obligations of holders of
reporting transfer certificates. Several amendments are made in item 11:
. This item adds a new Division 1 - Reporting obligations.
Specific reporting obligations are required for RTC holders. Current
section 19 refers specifically to reporting obligations of controlling
corporations, and it's members with operational control of facilities.
RTC holders are also 'registered corporations', but they are not
necessarily a controlling corporation and are provided with an RTC on
the basis that they have financial control.
- This item adds a new section 22G - Report to be given to Greenhouse and
Energy Data Officer.
A corporation holding an RTC for all or part of a financial year
must report to the GEDO the greenhouse gas emissions, energy
production and energy consumption from the operation of that
facility during that time in accordance with 22G. Failure to do so
may be an offence under Division 137 of the Criminal Code and a non-
compliant corporation may be liable for a civil penalty of 2000
penalty units.
Reports required under 22G must be supplied to the GEDO in an
approved manner and form. They must be based on methods determined
by the Minister under 10(3) or by a method which meets criteria
determined by the Minister. Reports under this provision must
include any information specified by the regulations for s22G and
be provided before the end of 4 months after the end of the interim
financial year.
The Regulations may provide different requirements for different
circumstances. These may include the requirement for a corporation
to provide information to the GEDO that has been requested by a
State or Territory for the GEDO to collect.
In relation to a facility, a corporation reporting under 22G(1) for
an interim year that does not meet greenhouse gas emissions of a
carbon dioxide equivalence of 25 kilotonnes or more, and did not
produce 100 terajoules or more of energy, and did not consume 100
terajoules or more of energy, regulations may specify different
reporting requirements for a report to be submitted to the GEDO. It
is not the intention, when a threshold is not met, to remove all
reporting obligations from the RTC holder.
22G(6) allows section 19 and 22G reports to be set out in the same
document.
Where no regulations are in force for the purpose of paragraph 2(c)
then current regulations for the purpose of 19(6)(c) have effect if
they were made for the purpose of 22G(2)(c), the provision in
paragraph 2(c) and the regulations are read in reference to a
facility to which an RTC relates, and those regulations were
otherwise appropriately modified.
- This item adds a new section 22H Records to be kept.
The RTC holder who is or was required to provide a report under
section 22G for an interim financial year must keep records of the
corporation's activities that:
. allow the corporation to report accurately under section 22G;
and
. enable the GEDO to ascertain whether the corporation has
complied with the corporation's obligations under
section 22G.
In line with existing record keeping provisions in the Act, the RTC
holder must retain the records for 7 years from the end of the
financial year in which the activities take place.
. This item adds a new Division 2 - Reporting transfer certificates.
- This item adds a new section 22J Reporting transfer test.
An RTC allows the reporting obligation of a facility to be
transferred to a corporation that has financial control of the
facility which is under the operational control of another member
of a different controlling corporation.
The transferee corporation must be a company registered under Part
2A.2 of the Corporations Act 2001. The corporation must be a
constitutional corporation and not a foreign corporation. The
transferee cannot be within the same controlling corporation's
group as the transferor corporation (operator).
Financial control for the purposes of the NGER Act (refer to Clause
22R), is intended to encompass a corporation that has significant
ability to control a facility through financial means only and
therefore give effect to decisions relating to greenhouse gas
emissions reductions.
The meaning of financial control recognises that more than one
person may have financial control over a facility. For example,
several persons may be participants in a joint venture or
partnership that collectively have financial control of a facility.
In these circumstances, the person with the equal or greatest share
in the economic benefits from a facility will have financial
control for the purposes of the NGER Act.
[pic]
Member Y, which is part of Controlling Corporation A's group, is the
operator of Facility 1. Member F, which is part of Controlling
Corporation B's group, has financial control over Facility 1. Member F
(with consent from Corporation A and Corporation B) applies to the GEDO
for a reporting transfer certificate.
A certificate is issued and Member F takes on all reporting obligations
and liabilities for Facility 1 under the National Greenhouse and Energy
Reporting Act 2007, including reporting in relation to greenhouse gas
emissions, energy production and energy consumption. Facility 1
emissions do not count toward Corporation A's nor Corporation B's
thresholds.
- This item adds a new section 22K - Application for reporting transfer
certificate.
An application to obtain a RTC must be made in writing in a form
approved by the GEDO. An application by a corporate group member
that has financial control of a facility must be accompanied by the
written consent of its controlling corporation to take on the
reporting obligations established by the NGER Act.
Also, for the applicant to acquire an RTC they must obtain the
written consent of the controlling corporation of the transferor
that it has agreed to give the applicant such information as
necessary for the applicant to comply with obligations that will be
imposed on the applicant by the NGER Act in relation to the
facility if the certificate is issued.
The application must also include any information and documents
that are specified in the form approved by the GEDO.
- This item adds a new section 22KA - Further information.
The GEDO may request further information in relation to an
application within a period specified in a notice given by the
GEDO. If the applicant does not meet this request within the time
specified, the GEDO may refuse to consider the application or
refuse to take any action, or any further action, in relation to
the application.
- This item adds a new section 22L - Issue of reporting transfer
certificate.
After considering the application, the GEDO may issue to the
applicant an RTC for a facility on the grounds it has satisfied
certain criteria.
The GEDO must be satisfied the applicant passes the RTC transfer
test (Clause 22J) and it has the capacity and access to the
required information to comply with its obligations under the NGER
Act.
The threshold criteria ensures that only facilities that are
expected to meet the facility level threshold are considered for an
RTC. The thresholds for the operation of the facility during an
interim year are:
. emissions of greenhouse gases that have a carbon dioxide
equivalence of 25 kilotonnes or more;
. production of energy of 100 terajoules or more; and
. consumption of energy of 100 terajoules or more.
The GEDO is required to take all reasonable steps to ensure that a
decision is made on an application for a reporting transfer
certificate within 90 days of receiving an application or within 90
days of being given further information. The GEDO must inform an
applicant in writing if it decides to refuse to issue a RTC.
- This item adds a new section 22M - Duration of reporting transfer
certificate.
An RTC comes into force on the day specified in the certificate as
the day on which the certificate is to come into force (the start
day). The start day may be earlier than the day on which the
certificate is issued, so long as it occurs either in the same
financial year as the day on which the certificate is issued, or
the financial year preceding the financial year in which the
certificate is issued.
The start day may only be earlier than the day on which the
certificate is issued if the applicant and the relevant parties
consent to the specification of that start day.
An RTC remains in force until the end of 30 June 2011.
- This item adds a new section 22N - Surrender of reporting transfer
certificate.
If an RTC holder wishes to surrender a RTC it must obtain written
consent from the GEDO to do so. The GEDO must not consent to the
surrender unless:
. where applicable, the controlling corporation(s) that agreed
to the making of the application for the certificate agrees
to the surrender, and
. the GEDO is satisfied that there are special circumstances
that warrant the giving of its consent to the surrender.
- This item adds a new section 22P - Cancellation of reporting transfer
certificate.
The GEDO must, by written notice, cancel an RTC in the following
circumstances:
. if a company ceases to pass the reporting transfer test in
relation to the facility concerned;
. if the corporation has become an externally-administered body
corporate (within the meaning of the Corporations Act 2001);
or
. if regulations specify one or more other grounds for
cancellation and at least one of those grounds is applicable
to the company.
The cancellation or surrender of an RTC will result in future
obligations and liability returning to the person that would have
had obligations and liability in the absence of the RTC.
- This item adds a new section 22Q - Reporting transfer certificate is
not transferable.
An RTC is not transferable.
- This item adds a new section 22R - Financial control.
This clause outlines the allowable scenarios for the application of
financial control for the purposes of the NGER Act. It is intended
to encompass a corporation that has significant ability to control
a facility through financial means only and therefore give effect
to decisions relating to greenhouse gas emissions reductions. It is
not intended to include an agent or person acting on behalf of a
corporation that has financial or operational control of a facility
who may not have any direct influence on greenhouse gas emissions
reductions.
The meaning of financial control recognises that more than one
person may have financial control over a facility. For example,
several persons may be participants in a joint venture or
partnership that collectively have financial control of a facility.
In these circumstances, the person with the equal or greatest share
in the economic benefits from a facility will have financial
control for the purposes of the NGER Act.
Item 12 Before subsection 24(1B) - Publishing of information
18. This item specifies that the GEDO must publish on a website the scope
1, scope 2, and energy consumption figures from interim financial year
reports submitted by the RTC holder. The GEDO may also publish the methods,
and ratings to each measure in accordance with those methods under the
determination under section 10(3).
This amendment is aligned with existing NGER obligations.
Item 13 Before subsection 24(2) - Publishing information
19. This item specifies that the GEDO is restricted from publishing certain
information where an application has been made under section 25 and has
been accepted by the GEDO
This amendment is aligned with existing NGER Act obligations.
Item 14 Subsection 25(1) - Requests for information not to be published
20. This item specifies that an RTC holdert may apply to request the GEDO
not to publish information if it could be demonstrated that the information
could be capable of revealing trade secrets or have other negative impacts
on matters of commercial value.
Item 15 Before subsection 30(3) - Continuing contraventions
21. This item imposes a civil penalty of 100 penalty units per day for
failing to comply with s22G requirements. This is analogous with standard
NGER continuing contraventions.
Item 16 After paragraph 56(d)
22. An application may be made to the Administrative Appeals Tribunal for
the review of a decision of the GEDO to a refusal to issue an RTC, consent
to the surrender of an RTC, or cancelling an RTC.
Part 2 - Consequential amendments relating to the Australian Climate Change
Regulatory Authority
Items 17 to-32 (References to the Greenhouse and Energy Data Officer)
23. These items will only commence on the commencement of section 3 of the
Carbon Pollution Reduction Scheme Act 2009.
Amendments at Items 17 - 32 omit references to the GEDO in provisions to
be inserted by the parliamentary amendments moved in relation to the NGER
Bill 2009, and insert references to the ACCRA. The ACCRA will administer
the CPRS, the reporting regime and the renewable energy requirements. It
will be established by the ACCRA Bill 2009.
Part 3 - Consequential amendments relating to publication of information
Item 33 - Paragraphs 24(1AD)(a) and (b)
24. Item 12 above amends section 24 by inserting subsections 24(1AD) and
24(1AE). These sections address the matters which the Regulator is
required to or may publish in relation to reports by holders of RTCs.
The inserted subsections foreshadow that Regulations will define
'greenhouse gas emissions that are scope 1 emissions' and 'greenhouse gas
emissions that are scope 2 emissions'.
This item amends paragraphs 24(1AD)(a) and (b) by omitting references to
the Regulations for the meaning of scope 1 and scope 2 emissions. The
reason for this amendment is that the combined effect of Items 137-138
and 156-157 of the CPRS (Consequential Amendments) Bill 2009 is that
Regulations will be made under section 10 to define scope 1 and scope 2
emissions of greenhouse gas from 1 July 2011.
Index]
[Search]
[Download]
[Bill]
[Help]