In this review I outline the Agency’s main achievements for 2012–13 with reference to the Clean Energy Regulator’s strategic objectives.
From the outset, we applied the principles published in the Regulator’s Compliance, Education and Enforcement Policy to give priority to client engagement as the pathway to compliance. We connected with our clients through workshops, webinars and face-to-face training in addition to the services provided through our contact centre and website.
Our relationships with relevant industry associations have been particularly productive.
This approach delivered measurable compliance results across all our schemes in 2012–13, most notably acquittal of over 99 per cent of the carbon price liability due by 17 June 2013. Client feedback, both unsolicited and obtained through surveys, was predominantly positive. Clients appreciate that we are open and responsive even when their issues are difficult to resolve.
The carbon pricing mechanism, the Carbon Farming Initiative and the Renewable Energy Target are all underpinned by the issuance, trade and surrender of units of various types. These units have monetary value to their owners. Security of the registry systems in which ownership is tracked is a paramount consideration.
The integrity of the schemes could also be compromised if units were issued on an unsound basis or if would-be investors were defrauded on the basis of false claims. We address these risks on many levels.
We have invested considerable resources in the systems and processes that enable clients to submit reports, receive valid entitlements on a valid basis and manage transactions securely.
Our internal control systems also play an important role. We continue to develop the tools and training that officers need to be vigilant about the security of the premises, systems and information we hold.
We have built strategic alliances with relevant law enforcement agencies within Australia and overseas, such as the Australian Securities and Investments Commission and the Australian Federal Police. These relationships will strengthen over time as we share intelligence and collaborate on investigations. This approach builds on our track record of firm enforcement action under the Renewable Energy Target.
It has been quite a challenge for the Agency and its officers to build and at the same time put into practice the new processes required for the carbon pricing mechanism. Our goals have been achieved in terms of meeting legislative milestones and other performance indicators. We acknowledge that our clients have played their part by committing significant resources to achieve compliance. We can now build on the experience of the first annual cycle to improve the efficiency of our processes from the perspectives of both the Agency and our clients.
In parallel with these new developments, we have kept the administration of our more mature schemes well in the foreground.
The Renewable Energy Target continues to build steadily toward the realisation of Australia’s 2020 targets. In April, we saw Australia reach the milestone of over 1 million solar photovoltaic panel installations on Australian homes. The Carbon Farming Initiative approved 68 projects and rewarded over 1.75 million tonnes of abatement. During the reporting period 833 corporations submitted data under the National Greenhouse and Energy Reporting Scheme, with the highest ever level of on-time reporting.
We have used our experience in the long-established Renewable Energy Certificates market as the groundwork for our role and relationships in the new carbon market. As a result we have quickly gained credibility with market participants. Equally, their advice has helped the Agency to anticipate and prepare for transactions generated in the nascent market. This has all contributed to a smooth start-up.
As an indication of confidence in the market, around 97 per cent of the carbon credits we issued under the Carbon Farming Initiative were sold into the secondary market. A little more than a third of the free units issued under the Jobs and Competitiveness Program were also traded, before either being surrendered to acquit a liability or being sold to the Regulator using the buy-back facility.
Our international relationships became increasingly important as we exchanged insights with officials from a range of mature and emerging carbon markets around the world. In particular, we commenced preparations for the planned link with the European Union Emissions Trading System from the start of the flexible price period.
We maintain a number of core data sets, including information collected through the Renewable Energy Target and the National Greenhouse and Energy Reporting Scheme and the data held in the Australian National Registry of Emissions Units and the Renewable Energy Certificates Registry. Statutory provisions require us to protect certain information and to publish information. Our publications provide useful context for private sector investment and trading decisions and for commentators who are interested in the way that climate change policies are performing.
Our data are also valuable to government policy makers and their advisers and to other regulators. In the course of the year, we exchanged memoranda of understanding with government agencies at Commonwealth level and state level, to give effect to the principle that data collected by our Agency need not be collected again by others.
We put significant effort into quality assurance and validation of data. This includes an annual program of National Greenhouse and Energy Reporting Scheme audits. The results of the 2011–12 audits were reported this year and indicated that industry capability has grown with experience. Very few errors were found. Most significantly, only 0.3 per cent of the audited emissions relevant to the carbon pricing mechanism included quantifiable errors. This has given us a high degree of confidence in the data from which carbon price liability is derived and also in the quality of the data we provide to other agencies for purposes such as compiling Australia’s National Greenhouse Gas Inventory.
As we continued to develop robust internal governance mechanisms, we:
We also welcomed a new Member of the Clean Energy Regulator.
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The Clean Energy Regulator is a Government body responsible for accelerating carbon abatement for Australia.
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