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Role

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The role of the Clean Energy Regulator is determined by climate change law. In particular, the Clean Energy Regulator has administrative responsibilities in relation to the:

  • National Greenhouse and Energy Reporting Scheme, under the National Greenhouse and Energy Reporting Act 2007
  • carbon pricing mechanism, under the Clean Energy Act 2011
  • Australian National Registry of Emissions Units, under the Australian National Registry of Emissions Units Act 2011
  • Carbon Farming Initiative, under the Carbon Credits (Carbon Farming Initiative) Act 2011
  • Renewable Energy Target, under the Renewable Energy (Electricity) Act 2000.
Table 2.1: Regulatory schemes
Scheme Description
National Greenhouse and Energy Reporting Scheme

In 2007, the Australian Government introduced the National Greenhouse and Energy Reporting Scheme, a single, national framework under which corporations must report on greenhouse gas emissions, energy use and energy production. Corporations that meet a specified emissions threshold must register under the framework and provide a report each year. Information collected through the scheme provides the basis for assessing liable entities under the carbon pricing mechanism.

The data reported under the scheme is also a key input to Australia’s National Greenhouse Gas Inventory. It is used in projections and reporting under the United Nations Framework Convention on Climate Change and the Kyoto Protocol, and reporting to the International Energy Agency. It is also a critical input to policy development relating to greenhouse gas emissions and energy production and consumption, for both the Australian Government and, increasingly, the governments of the states and territories.

Carbon pricing mechanism

Australia introduced a price on carbon, commencing on 1 July 2012, to create an incentive for businesses to cut emissions by investing in clean technology and finding more efficient ways of operating.

In the first three years, the price is fixed, starting at $23 per tonne in 2012–13. From 2015–16, it transitions to a flexible market price under a ‘cap and trade’ scheme.

In both the fixed and the flexible price periods, liable entities have to report on their emissions and pay a price for every tonne of carbon pollution or equivalent greenhouse gases that they emit. The reporting on emissions is administered through the National Greenhouse and Energy Reporting Scheme.

Australian National Registry of Emissions Units

The Australian National Registry of Emissions Units is a secure electronic system designed to accurately track the location and ownership of:

  • emissions units issued under the Kyoto Protocol of the United Nations Framework Convention on Climate Change
  • Australian Carbon Credit Units (ACCUs) issued under the Carbon Farming Initiative
  • carbon units issued under the carbon pricing mechanism.

Organisations or individuals that have an emissions liability or wish to hold, transfer, cancel, surrender or relinquish such units are required to have an Australian National Registry of Emissions Units account.

Carbon Farming Initiative

The Carbon Farming Initiative allows land managers to earn ACCUs by storing carbon or reducing greenhouse gas emission on the land.

Activities that count towards Australia’s national target under the Kyoto Protocol—including reforestation, avoided deforestation, and reduced emissions from livestock, manure, fertiliser and waste deposited in landfills before 1 July 2012—can earn Kyoto ACCUs. These credits can be used to acquit liabilities under the carbon pricing mechanism. Other credits can be sold to people and organisations wishing to offset their emissions in the voluntary market.

Renewable Energy Target

The Renewable Energy Target creates a financial incentive for investment in renewable energy sources through the creation and sale of certificates that can be used to offset emissions liabilities. Electricity retailers are required to offset a proportion of their demand by buying and surrendering certificates.

The Renewable Energy Target is split into two parts: the Large-scale Renewable Energy Target and the Small-scale Renewable Energy Scheme.

The Renewable Energy Target has an internet-based registry system that facilitates the creation, registration, auditing, transfer and surrender of large-scale generation certificates and small-scale technology certificates.

Responsibilities

The responsibilities of the Clean Energy Regulator include:

  • providing education and information on the five regulatory schemes that the Clean Energy Regulator administers
  • monitoring, facilitating and enforcing compliance with each regulatory scheme
  • collecting, analysing, assessing, providing and publishing information and data
  • allocating emissions units, including freely allocated units, fixed price units and auctioned units
  • accrediting auditors for the National Greenhouse and Energy Reporting Scheme, the carbon pricing mechanism and the Carbon Farming Initiative
  • working with other law enforcement and regulatory bodies.

Approach

The Clean Energy Regulator’s monitoring and enforcement powers include powers to:

  • conduct independent audits, information gathering and inspections
  • suspend or revoke permissions
  • accept enforceable undertakings from a regulated entity
  • issue infringement notices
  • pursue legal action for breaches of civil penalty provisions.

The Clean Energy Regulator encourages scheme participants to comply voluntarily with legislative requirements and recognises that engagement, education and support assist regulated entities to comply with their obligations. The Clean Energy Regulator’s approach is outlined in its Compliance, Education and Enforcement Policy.

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