EXPLANATORY STATEMENT

Select Legislative Instrument 2005 No. 325

 

Issued by authority of the Minister for Revenue
and Assistant Treasurer

Energy Grants (Cleaner Fuels) Scheme Act 2004

Energy Grants (Cleaner Fuels) Scheme Amendment Regulations 2005 (No. 1)

The Energy Grants (Cleaner Fuels) Scheme Act 2004 (the Act) established the Energy Grants (Cleaner Fuels) Scheme, which provides grants to importers and domestic producers of cleaner fuels, including low sulphur fuels.  Section 9 of the Act provides that the Governor-General may make regulations prescribing matters that are required or permitted by the Act to be prescribed, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.  Section 4 of the Act provides that the meaning of a ‘cleaner fuel’, the ‘start day’ and the ‘end day’ for the grant may be prescribed by the regulations.  Subsection 8(1) of the Act provides that grants are calculated in accordance with the regulations. 

The Regulations amend the Energy Grants (Cleaner Fuels) Scheme Regulations 2004 (the Principal Regulation) to introduce the low sulphur premium unleaded petrol component of the Measures for a Better Environment - Cleaner Fuels measure, as announced in the 2003-04 Budget.  This component consists of providing a grant to importers and domestic producers of premium unleaded petrol with 50 milligrams per kilogram or less sulphur content (or low sulphur premium unleaded petrol). 

The purpose of the grant is to bring forward the production of low sulphur premium unleaded petrol before it is mandated on 1 January 2008 under the provisions included in the Fuel Standard (Petrol) Determination 2001 which is made under Section 21 of the Fuel Quality Standards Act 2000.  The early introduction of low sulphur premium unleaded petrol delivers environmental and health gains, through reduced emissions of hydrocarbons, oxides of nitrogen and particulates.  It also facilitates the quicker adoption of more fuel efficient and greenhouse friendly engine technologies.

The Regulations prescribe:

·        low sulphur premium unleaded petrol with 50 milligrams or less of sulphur per kilogram as a ‘cleaner fuel’;  and

·        a ‘start day’ of  1 January 2006 and an ‘end day’ of 31 December 2007; 

·        the grant rate for supplying low sulphur premium unleaded petrol as 1.1 cents per litre;  and

·        the method for calculating the amount of grant to which a recipient is entitled.

The grant scheme is administered under the Product Grants and Benefits Administration Act 2000.  That Act provides the administration and compliance framework for the grant schemes administered by the Australian Taxation Office.

The Act specifies no conditions that need to be met before the power to make the proposed Regulations may be exercised.

The Regulations are a legislative instrument for the purposes of the Legislative Instruments Act 2003.

The Regulations commence on 1 January 2006.

The Regulations have been prepared in consultation with the Australian petroleum refining industry.  This industry supports the making of the proposed Regulations.