Carbon pricing mechanism repeal
The Clean Energy Act 2011 has been repealed. This abolishes the carbon pricing mechanism from 1 July 2014. Liable entities must still meet their carbon price obligations for the 2013-14 financial year.
Content on the Clean Energy Regulator website will be progressively updated to reflect these changes. More information can be found on the carbon pricing mechanism repeal page.
Liable entities under the carbon price can satisfy their liability by surrendering 'eligible emissions units'. Each eligible emissions unit represents one tonne of carbon pollution emitted: carbon dioxide equivalent (CO2-e). For example, if an entity have an emissions number of 35 000, they need to surrender 35 000 eligible emissions units to satisfy their liability.
Entities surrender eligible emissions units from your account in the Australian National
Registry of Emissions Units (ANREU) by an electronic notice transmitted to the Clean Energy Regulator.
An eligible emissions unit is:
- a carbon unit
- an eligible Australian carbon credit unit (ACCU), or
- an eligible international emissions unit.
Some restrictions apply to using ACCUs and eligible international emissions units, as outlined below.
We issue carbon units under the Clean Energy Act 2011 for the purposes of satisfying liabilities under the Act. We issue each carbon unit by making an electronic entry in the relevant Australian National Registry of Emissions Units (ANREU).
For more information about the characteristics of carbon units, including how they are acquired and used to satisfy liability, see the concise description of units.
Australian Carbon Credit Units (ACCUs)
We issue ACCUs for greenhouse gas abatement activities undertaken as part of the Carbon Farming Initiative.
For more information about the characteristics of ACCUs, including how they are acquired and used to satisfy liability, see the types of units.
Importantly, in the fixed price period (2012–14), liable entities can surrender eligible ACCUs totalling no more than five per cent of a person's liability. The only exception is if the majority (at least 50 per cent) of a person's liability comes from landfill emissions. In this case, entities can surrender ACCUs up to their full liability during the fixed price period.
Emissions units—summary of requirements and transitions
Fixed price period
- We issue carbon units to the ANREU account of the purchaser; these units are automatically surrendered.
- Carbon units issued within the fixed price period can only be surrendered is the same vintage year in which they were issued; they are cancelled after the following 1 February.
- Industry assistance schemes provide free carbon units for each vintage year. These units are issued into the ANREU accounts of successful applicants.
- Free carbon units are tradable. A buy-back of free units is available for each fixed price year and free units that are not surrendered or bought back by 2 February 2014 are cancelled.
- No banking (holding over units from one vintage year to the next) or borrowing (surrendering units in advance of the vintage year) may occur.
- International units cannot be surrendered in this period.
- ACCUs are limited to five per cent of the total surrender (except if the majority, at least 50 per cent, of an entity's liability comes from landfill emissions).