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, supplied from a gaseous fuel supplier to the recipient of that gas.
From 1 July 2013 an OTN can be quoted for supplies of liquefied petroleum gas (LPG) or liquefied natural gas (LNG) under the carbon pricing mechanism. A new and expanded OTN application form will be made available soon after the Clean Energy Regulations 2011 are amended to accommodate the expansion of the OTN mechanism to include LPG and LNG for non-transport use.
If you supply natural gas to another person (the recipient), you are liable for the potential greenhouse gas emissions embodied in the gas, except where liability is transferred from you to the recipient through quotation of an OTN. These emissions are commonly referred to as "embodied emissions".
An OTN is used to keep track of liability so that liability is not imposed twice on the same amount of gas. For example, it ensures that emissions from the use of natural gas that count towards a large gas consuming facility's direct emissions liability do not also count towards an OTN holder's embodied emissions liability.
If you are responsible for a 'large gas consuming facility' you are liable as a direct emitter for the emissions resulting from the combustion of the natural gas 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). It is mandatory for the recipient of the natural gas supplied for use at a large gas consuming facility to quote an OTN and mandatory for suppliers of natural gas to accept the quotation. The recipient of the natural gas may not necessarily be the operator of the large gas consuming facility.
OTNs also ensure that liability is not imposed on natural gas that is used in a way that does not result in emissions. Entities that use natural gas:
- as a feedstock, or
- in the manufacture of compressed natural gas (CNG), liquefied natural gas (LNG) or liquefied petroleum gas (LPG)
are permitted to quote an OTN to manage liability for the use of that natural gas.
You need to apply to us to be issued with an OTN. See our forms and calculators page for the relevant application form.
The OTN Register page lists:
- current OTN holders, 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.