Obligation transfer numbers

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The Clean Energy Act 2011 has been repealed.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.

The information below applies to reporting obligations under the NGER Act 2007 and obligations under the Clean Energy Act 2011 for the 2012-13 and 2013-14 financial years, including the obligation to report by 31 October 2014 and to acquire and surrender sufficient units by the final surrender deadline of 2 February 2015 or pay a unit shortfall charge.

An Obligation Transfer Number (OTN) is used to transfer carbon price liability for the potential greenhouse gas emissions embodied (embodied emissions) in an amount of natural gas, liquefied petroleum gas (LPG) or liquefied natural gas (LNG) supplied from a gaseous fuel supplier to the recipient of that gas.

From 1 July 2013 an OTN can be quoted for supplies of LPG or LNG under the carbon pricing mechanism, in addition to natural gas supply.

If you supply natural gas to another person (the recipient) or if you import, manufacture or produce LPG or LNG for non-transport purposes, you are liable for the potential greenhouse gas emissions embodied in the gas (the embodied emissions), except where liability is transferred from you to the recipient through quotation of an OTN.

An OTN is used to keep track of liability so that liability is not imposed twice on the same amount of natural gas, LPG or LNG. For example, it ensures that emissions from the use of natural gas, LPG or LNG that count towards a large gas consuming facility's direct emissions liability or a large LPG or LNG consuming facility's emissions liability do not also count towards an OTN holder's embodied emissions liability in relation to that facility.

If you are responsible for a large gas consuming facility or a large LPG or LNG consuming facility, you are liable as a direct emitter for the emissions resulting from the combustion of the natural gas, LPG or LNG supplied to the facility. A facility becomes a 'large gas consuming facility' the second year after it has emissions from natural gas combustion of 25 000 tonnes or more CO2-e in any financial year after 1 July 2010. A facility becomes a 'large LPG or LNG consuming facility' the second year after it has emissions from the combustion of both LPG or LNG of 25 000 tonnes or more CO2-e in any financial year after 1 July 2011.

It is mandatory for the recipient of the natural gas, LPG or LNG supplied for use at a large gas consuming facility or an LPG or LNG consuming facility to quote an OTN and mandatory for suppliers of natural gas, LPG or LNG to accept the quotation. Note that the recipient of the natural gas, LPG or LNG may not necessarily be the operator of the large natural gas/LPG/LNG consuming facility.

Entities are also permitted to quote an OTN when they:

  • use natural gas in the manufacture of CNG, LNG or LPG; or
  • use natural gas used wholly or partly as a feedstock; or
  • use some or all of an amount of LPG or LNG as a feedstock; or
  • use some or all of an amount of LPG or LNG in such a way as to not emit any greenhouse gases.

Prior to 1 July 2014, entities could also apply to be an approved person or approved recipient to quote an OTN on the basis that it is likely that covered emissions from the operation of an eligible facility of the applicant in an eligible financial year attributable to combustion of natural gas or LPG or LNG will be at least 25,000 tonnes CO2-e.

The OTN Register page lists:

  • OTN holders during the 2013-14 financial year, and
  • gaseous fuel suppliers that have requested to be entered on the list of gaseous fuel suppliers.

A list of cancelled and surrendered OTNs is also available.

Further information

Further information can also be found by viewing our Frequently Asked Questions or contacting the Clean Energy Regulator by phone on 1300 553 542 or email reporting@cleanenergyregulator.gov.au. Further contact information is available on the contact us page.

Was this page useful?