ATTACHMENT

 

Details of the Ozone Protection and Synthetic Greenhouse Gas Management Amendment Regulation 2014

 

Section 1 - Name

 

This section provides that this is the Ozone Protection and Synthetic Greenhouse Gas Management Amendment Regulation 2014 (the Regulation).

 

Section 2 - Commencement

 

This section provides that the instrument commences on the day after it is registered.

 

Section 3 - Authority

 

This section provides that the instrument is made under the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (the Act).

 

Section 4 - Schedules

 

This section provides that each instrument specified in a Schedule to the Regulation is amended or repealed as set out in the applicable terms in the Schedule concerned, and any other item in a Schedule to this instrument has effect according to its terms.

 

Schedule 1 - Amendments

 

Item 1 - Before regulation 2A

 

This item inserts regulation 2AA to prescribe for the definition of heel allowance percentage in section 7 of the Act, a figure of 5% for each substance referred to in Schedule 1 to the Act.

 

The heel is a residual amount of gas left in a cylinder after all useable gas has been decanted or offloaded. Removal of the heel risks damaging the cylinder through changes in pressure and thereby introducing contaminants into the cylinder and gas contained within it in subsequent uses. Removing the heel also increases the safety risks for the handler. Currently, the Department of the Environment's (the Department) practice is to deduct a heel allowance of 5% (by weight) to the imported amount of gas reported in quarterly activity reports by controlled substances licensees (a controlled substance licence allows a person to manufacture, import or export hydrochlorofluorocarbons, methyl bromide or synthetic greenhouse gases). The import amount, less the heel, is used to calculate the hydrochlorofluorocarbon quota allocated to licence holders under the Act and the amount of levy paid. The amendment reflects current Departmental practice.

 

Item 2 - At the end of regulation 3

 

Currently, the Act requires all importers of ozone depleting substances and synthetic greenhouse gas equipment to have a relevant licence (i.e. ODS/SGG equipment licence), unless an existing exemption applies. Subregulation 3C(5) of the Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995 (the Principal Regulations) allows the Minister or a Senior Executive Service employee of the Department to waive part of the application fee for an ODS/SGG equipment licence. To be eligible for a partial fee waiver, applicants must demonstrate that they will import no more than five pieces of ozone depleting substance equipment or synthetic greenhouse gas equipment in a single consignment which contains less than ten kilograms in total of hydrochlorofluorocarbons, hydrofluorocarbons, perfluorocarbons or sulfur hexafluoride, and the applicant has not had part of a licence fee waived in the two years prior to the licence application and they have paid a licence levy in relation to the import under section 69 of the Act.

 

Holding an ODS/SGG equipment licence places an administrative burden on low volume importers which outweighs the small amount of gas imported, the small amount of revenue collected and the small potential for emissions to occur. The Omnibus Repeal Day (Autumn 2014) Act 2014 (the Omnibus Act) amended subsection 13(6A) of the Act to exempt low volume importers from the requirement to hold an ODS/SGG equipment licence in certain circumstances, with the thresholds and conditions to be prescribed either in the Principal Regulations or legislative instrument made by the Minister for the Environment.

 

This item inserts subregulations 3(5) and 3(6) in the Principal Regulations to support amendments made to the Act by the Omnibus Act. Subregulations 3(5) and 3(6) detail, for subparagraphs 13(6A)(c)(i)-(ii) of the Act, the thresholds and conditions a low volume importer of ozone depleting substance equipment or synthetic greenhouse gas equipment must meet to qualify for an exemption from licence requirements under the Act.

 

A low volume importer will not require an ODS/SGG equipment licence if, within a period of two years prior to the date that the importation occurs, a person imports no more than five units of ozone depleting substance equipment and synthetic greenhouse gas equipment in total, and the equipment contains, in total, less than ten kilograms of each of the following: hydrochlorofluorocarbons, hydrofluorocarbon, perfluorocarbon, or sulfur hexafluoride.

 

Item 3 - Subregulation 3C(5) and Item 4 - Paragraphs 6A(a) and (b)

 

Item 3 repeals subregulation 3C(5) of the Principal Regulations as a consequence of Item 2. Subregulation 3C(5) provides a partial waiver of the application fee for an ODS/SGG equipment licence for importers who can demonstrate they meet conditions specified in subregulation 3C(5). The exemption for low volume importers from holding an ODS/SGG equipment licence inserted by Item 2 renders this fee waiver redundant and therefore, subregulation 3C(5) is repealed.

 

Item 4 repeals paragraphs 6A(a) and (b) of the Principal Regulations as a consequence of Item 2 and replaces those paragraphs with proposed paragraphs 6A(a)-(c). Previously, paragraph 6A(b) of the Principal Regulations provided that decisions made under subregulations 3C(5) were appealable to the Administrative Appeals Tribunal. Given the repeal of subregulation 3C(5) by Item 2, the reference to the subregulation in paragraph 6A(b) is redundant. Subparagraphs 6A(a)(i), (ii) and (iii) are renumbered as paragraphs 6A(a), (b) and (c), but otherwise remain unchanged.

 

Item 5 - Regulation 70

 

Item 5 repeals regulation 70 and substitutes it with regulations 70 - 73, made pursuant to subclause 10(1A) of Schedule 4 to the Act. Subclause 10(1A) provides that the ban in subclause 10(1) of Schedule 4 to the Act on the import and manufacture of refrigeration and air conditioning equipment and insulating foam in refrigeration and air conditioning equipment containing hydrochlorofluorocarbons or chlorofluorocarbons does not apply to equipment specified in the Principal Regulations. Regulations 70 - 73 amend various sunsetting dates for the exemptions to the ban.

 

Regulation 70 specifies for subclause 10(1A) of Schedule 4 to the Act, hydrochlorofluorocarbon pre-charged refrigeration equipment. The hydrochlorofluorocarbon pre-charged refrigeration equipment exemption was provided in the Principal Regulations in 2011 as alternative technology was not available for all refrigeration applications at the time. Industry has advised that the exemption is no longer required as alternative technology is available and being used. Regulation 70 sunsets on 30 June 2015, which is the sunsetting date in current subregulation 70(1) of the Principal Regulations.

 

Regulation 71 specifies for subclause 10(1A) of Schedule 4 to the Act, chillers charged with HCFC-123. The sunsetting date for regulation 71 is 31 December 2015. This date aligns with the final step-down in Australia's accelerated phase-out of hydrochlorofluorocarbons under the Montreal Protocol on Substances that Deplete the Ozone Layer (the Montreal Protocol), where hydrochlorofluorocarbon imports are intended to be used for servicing existing equipment.

 

Regulation 72 specifies for subclause 10(1A) of Schedule 4 to the Act, components for existing high static ducted spilt system air conditioners. The exemption for components for existing high static systems was made as it was impractical to replace these types of systems with an alternative technology as they are integrated into the fabric of existing buildings. Alternatives are available however industry has advised that some additional time is required to adapt those alternatives to the Australian market. For this reason, the sunsetting date for this exemption is 30 June 2016.

 

Subregulation 73(1) specifies for subclause 10(1A) of Schedule 4 to the Act, the equipment listed in paragraphs 73(1)(a)-(c) (i.e. replacements parts for existing hydrochlorofluorocarbon air conditioning and refrigeration equipment, equipment insulated with foam manufactured with hydrochlorofluorocarbons, and equipment for which the Minister considers it is impracticable to ban). The sunsetting date for equipment listed in paragraphs 73(1)(a)-(c) is 31 December 2019. The replacement parts exemption is required to avoid premature retirement of existing equipment. The foam exemption is required as it is impracticable to determine the chemical used to manufacture insulating foam in sealed refrigeration systems.

 

Subregulation 73(2) allows the Minister to delegate his or her powers under paragraph 73(1)(c) (i.e. equipment for which the Minister considers it is impracticable to ban) to an SENIOR EXECUTIVE SERVICE employee or an acting SENIOR EXECUTIVE SERVICE employee in the Department. Under subregulation 73(3) delegates are required to comply with any directions of the Minister.

 

Subregulation 73(4) provides that applications may be made to the Administrative Appeals Tribunal for a review of a decision made by the Minister under paragraph 73(1)(c).

 

Subregulation 73(5) clarifies that the term replacement part does not include a complete, or substantially complete, indoor or outdoor unit of a split system air conditioning unit.

 

Subregulation 73(6) provides that regulation 73 expires at the end of 31 December 2019 as if it had been repealed by another regulation.

 

Item 5 also inserts the headings "Division 5.1 - Exemptions for refrigeration and air conditioning equipment" and "Division 5.2 - Application fees for exemptions".

 

Item 6 - Regulation 200 (paragraph (j) of the definition of Non-QPS Exemption List)

 

This item amends paragraph (j) of the definition of Non-QPS Exemption List in regulation 200 to make the reference to the document called "Exemption List for Non-QPS Applications to Methyl Bromide in 2014" consistent in style with other references to similar documents published earlier and listed in the definition of Non-QPS Exemption List in regulation 200.

 

Item 7 - Regulation 200 (after paragraph (j) of the definition of Non-QPS Exemption List)

 

This item inserts paragraph (k) in the definition of Non-QPS Exemption List under regulation 200. Paragraph (k), under the definition of Non-QPS Exemption List, for the year 2015, refers to the document called Exemption List for Non-QPS Applications of Methyl Bromide in 2015. This allows the supply and use of methyl bromide approved by the Montreal Protocol for non-quarantine and pre-shipment category uses by critical use exemption holders during 2015.

 

Methyl bromide is a controlled substance listed in Part VII of Schedule 1 to the Act. Methyl bromide contributes to the depletion of the ozone layer when released into the atmosphere, and most uses are emissive by nature. The Principal Regulations regulate the supply and end use of non-quarantine and pre-shipment methyl bromide through record keeping and reporting systems.

 

Australia's obligations under the Montreal Protocol require that stocks of methyl bromide are used for authorised purposes. Under the Montreal Protocol, non-quarantine and pre-shipment uses of methyl bromide were phased out from 1 January 2005 except where critical use exemptions are granted by Parties to the Montreal Protocol (which in Australia in 2015, will be restricted to the strawberry runner industry in Victoria) or where an emergency use is granted by the Minister and subsequently reported to the Montreal Protocol.

 

Item 8 - Subregulation 213(6) (paragraph (j) of the definition of Non-QPS Intermediate Supplier List)

 

This item amends paragraph (j) of the definition of Non-QPS Intermediate Supplier List in subregulation 213(6) to make the references to the document called "Intermediate Supplier List for Non-QPS Applications of Methyl Bromide in 2014" consistent in style with other references to similar documents published earlier and listed in the definition of Non-QPS Intermediate Supplier List in subregulation 213(6).

 

Item 9- Subregulation 213(6) (after paragraph (j) of the definition of Non-QPS Intermediate Supplier List)

 

This item inserts paragraph (k) in the definition of Non-QPS Intermediate Supplier List under subregulation 213(6). Paragraph (k), under the definition of Non-QPS Intermediate Supplier List, for the year 2015, refers to the document called Intermediate Supplier List for Non-QPS Applications of Methyl Bromide in 2015. This allows the supply and use of methyl bromide for non-quarantine and pre-shipment category uses by critical use exemption holders during 2015.

Item 10 - After regulation 900

 

The Omnibus Act amended sections 46-46A of the Act to specify that the quarterly reporting obligations of all manufacturers, importers and exporters covered under the Act include reporting "nil amounts", i.e. where no import, export or manufacture occur in a quarter. These amendments ensure the requirement for a person to report a "nil amount" applies consistently to all manufacturers, importers and exporters covered under the Act. Reports must be given to the Minister in accordance with the Principal Regulations.

 

It is important that the reporting obligations of all licence holders under the Act are consistent as this data is used by the Australian Government to meet its reporting obligations under the Montreal Protocol and Kyoto Protocol to the United Nations Framework Convention on Climate Change. The submission of reports declaring nil imports, manufacture or exports of ozone depleting substance and synthetic greenhouse gas also provides an important indicator of industry activity and compliance.

 

This item inserts regulation 900A. Regulation 900A, prescribes for subsection 46(1AA) of the Act, the requirements for manufacturers, importers and exporters of scheduled substances (other than synthetic greenhouse gases and substances in ozone depleting substance equipment or synthetic greenhouse gas equipment) to submit nil reports.

 

Subregulation 900A(2) requires a person to keep a copy of the report for five years from the date the report is given to the Minister. Subregulation 900A(3) specifies the information that must be provided in the report.

 

Item 11 - Subregulation 901(1)

 

This item omits "and (3)" from subregulation 901(1) and substitutes in "(3) and (4)" to reflect the amendments made to section 46A by the Omnibus Act.

 

Item 12 - At the end of Part 7

 

This item inserts regulation 902. Regulation 902, for subsections 46A(4A) and (4B) of the Act, prescribes the requirements for manufacturers, importers and exporters of synthetic greenhouse gases, ozone depleting substance equipment or synthetic greenhouse gas equipment to submit nil reports.

 

Subregulation 902(2) requires a person to keep a copy of the report for five years from the date the report is given to the Minister. Subregulation 902(3) specifies the information that must be provided in the report.

 

Statement of Compatibility with Human Rights

 

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Ozone Protection and Synthetic Greenhouse Management Amendment Regulation 2014

 

 

Overview of the Legislative Instrument

 

The Ozone Protection and Synthetic Greenhouse Gas Management Amendment Regulation 2014 (the Regulation) amends the Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995 to:  

*         prescribe for the definition of heel allowance percentage in section 7 of the Act a figure of 5% for each substance referred to in Schedule 1 to the Act. The heel is a residual amount of gas left in a cylinder after all useable gas has been decanted or offloaded. Removal of the heel risks damaging the cylinder through changes in pressure and risks contaminating the gas within the cylinder;

*         prescribe the conditions a low volume importer must meet to qualify for an exemption from licence requirements under the Act;

*         exempt specified refrigeration and air conditioning equipment containing hydrochlorofluorocarbons from the ban in subclause 10(1) of Schedule 4 to the Act. Subclause 10(1) of Schedule 4 to the Act bans the import and manufacture of refrigeration and air conditioning equipment containing a hydrochlorofluorocarbon or chlorofluorocarbon refrigerant or foam;

*         insert a reference to the Exemption and Intermediate Supplier Lists for Non-Quarantine and Pre-Shipment applications of Methyl Bromide for 2015; and

*         require licence holders under the Act who have not manufactured, imported or exported a scheduled substance (i.e. a substance listed in Schedule 1 to the Act), or equipment containing an ozone depleting substance or synthetic greenhouse gas in a quarter to submit a report in respect to "nil amounts" of the scheduled substance, or ozone depleting substance equipment or synthetic greenhouse gas equipment.

 

Human rights implications

 

The Regulation has been assessed against the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011. The Regulation does not engage any of the applicable rights or freedoms.

 

Conclusion

 

The Regulation is compatible with Australia's human rights obligations.

 

 

The Hon Greg Hunt MP, Minister for the Environment