Frequently asked questions

We have developed the following information in response to general enquiries about the carbon price including how it relates to the National Greenhouse and Energy Reporting (NGER) scheme and available industry assistance. We will continue to add more detailed information as it becomes available.

Gaseous Fuels

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What is an obligation transfer number (OTN) and how does it work?

An OTN is used to transfer liability for emissions arising from the use of natural gas from the supplier to the user of that gas. An OTN is used to keep track of liability so that it is not imposed twice on the same emissions. For example, it ensures that emissions from the use of natural gas that count towards a facility's emissions do not also count also towards the gas supplier's liability.

Liability is transferred by an OTN when an end user of natural gas quotes its OTN to its natural gas supplier and the supplier accepts the quotation. This is mandatory for gas supplied to large gas consuming facilities. This provides certainty for suppliers and facility operators and ensures that liability rests with the facility operator.

Certain users of natural gas may quote an OTN on a voluntary basis. This lets large end users manage their liability for natural gas emissions where their gas supplier agrees to accept their quotation. Voluntary OTN quotation also enable end users to avoid paying a carbon price on natural gas used in a way that does not result in emissions, or on gas that attracts the equivalent carbon price through fuel tax arrangements.

For more information see Obligation transfer numbers and the OTN Register.

See also our forms and calculators page for the relevant application forms.

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Do OTNs apply to all kinds of facilities or emissions?

No. The OTN mechanism can only be used to transfer liability for the embodied emissions from natural gas. This is because liability for covered emissions arises at the facility where the emissions are released, rather than at the supplier level, and therefore no OTN mechanism is needed.

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How long will the Clean Energy Regulator take to process an OTN application?

All applications will be processed as expeditiously as possible. To enable prompt assessment of your application, you will need to ensure that all details provided in the application are accurate, up-to-date and complete. An OTN application can only be processed if complete information is provided.

For an application that relates to a Large Gas Consuming Facility (LGCF), a facility that uses natural gas as a feedstock or a facility that uses natural gas in the manufacturing of compressed natural gas (CNG), liquefied natural gas (LNG) or liquefied petroleum gas (LPG), the Clean Energy Regulator will endeavour to process these applications in 2 to 4 weeks.

The Clean Energy Regulator may require a slightly longer period of time to process an approved person application.

If the Clean Energy Regulator requires further information to process an application, for example to clarify a matter, the Clean Energy Regulator will request further information from the applicant. This may extend the processing period for that application.

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Do I need a different OTN for each facility at which I receive natural gas?

No. Your OTN is not limited to any particular facility that you may operate and you can only have one OTN. The OTN is issued to you as a legal person that meets the requirements for the issue of an OTN.

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I have an OTN that I quote for gas I receive for use in a LGCF. Can I use my OTN for other facilities that I control?

Yes, if you are required to quote your OTN for natural gas you receive for use in a LGCF, you may also quote your OTN in relation to supplies of natural gas for use at other facilities that are under your operational control. This is the case even where the amount of natural gas used at those other facilities does not meet the LGCF threshold. For these facilities, it is optional for the natural gas supplier to accept the quotation.

You may also quote your OTN for natural gas supplied to you that is intended for use as a feedstock and for natural gas supplied to you that is to be used, in the course of carrying on a business, to manufacture CNG, LNG or LPG. In these situations it is mandatory for a natural gas supplier to accept your OTN quotation.

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When does a facility become a Large Gas Consuming Facility (LGCF) for the first time?

A facility becomes a LGCF if the facility passes the threshold test for a financial year beginning on, or after, 1 July 2010.

A facility passes the threshold test for a financial year if the total amount of covered emissions from the operation of the facility during the financial year is attributable to the combustion of natural gas with a carbon dioxide equivalence of more than 25,000 tonnes.

The facility becomes a LGCF for the first time the second year after the threshold test is passed. That is, if a facility passes the threshold test in 2010-11 then it becomes a LGCF for the first time 2012-13. If a facility passes the threshold test in 2011-12 then they will become a LGCF in 2013-14.

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If I am a natural gas supplier, when am I considered to be a liable entity and what am I liable for?

You are a liable entity in relation to a supply of natural gas if:

  1. you 'supply' the natural gas to another person and it may reasonably be expected that the gas is wholly or partly for the use by that other person (selling natural gas, giving it to someone in exchange for something else, or simply giving gas to another person as a gift are all examples of supply), and
  2. the natural gas is withdrawn from a natural gas supply pipeline in Australia for the purposes of the use, and
  3. the recipient of the natural gas did not quote their OTN in relation to the supply.

However, you are not liable if the recipient of the natural gas quotes an OTN and you accept the quotation. In this case, liability transfers to the recipient.

If you do not accept an OTN quotation (where you are permitted to not accept a quotation) or where an OTN is not quoted, liability for the potential emissions embodied in the natural gas supplied remains with you, the natural gas supplier.

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Is coal mine waste gas considered by the Clean Energy Regulator to be natural gas under the carbon pricing mechanism?

The Clean Energy Regulator's position is that coal mine waste gas in its unprocessed state is not natural gas. Coal mine waste gas is separately defined under the National Greenhouse and Energy Reporting Regulations 2008 (NGER Regulations) and separately listed in the National Greenhouse and Energy Reporting (Measurement) Determination 2008 with different emissions factors to natural gas when combusted. Coal mine waste gas will also not necessarily meet the composition requirements of natural gas as set out in the NGER Regulations.

The Clean Energy Regulator considers that the natural gas supply provisions under the Clean Energy Act 2011 would not apply to the supply of unprocessed coal mine waste gas and therefore does not expect an OTN to be quoted in relation to such a supply.

It is important to note that emissions from the combustion of coal mine waste gas in the operation of a facility are covered emissions under the Clean Energy Act and direct emitter liability provisions will apply where the covered emissions threshold of 25,000 tonnes or more of CO2-e greenhouse gases in an eligible financial year is met.​​​​

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I am reporting for a large gas consuming facility (LGCF). What data am I required to enter into EERS for my section 22AA interim emissions report?

Clicking on the entity within the Corporate Structure will show the facility details. It is necessary to report that the facility is a LGCF. Select yes from the drop-down box and save this change. The save button is found at the very bottom of the screen.

Screenshot showing the LGCF drop-down box in the Facility Details section in EERS. 

Figure 1: The LGCF drop-down box is at the bottom of the Facility Details.

Once saved, the OTN quotation details are available.

Reporters are not required to provide the OTN quotation details before downloading a section 22AA interim emissions report. If an OTN is entered, EERS may generate an error even if the OTN is valid. If this occurs, remove the OTN quotation details.

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I am reporting for a natural gas supplier. What data am I required to enter into EERS for my section 22AA interim emissions report?

Natural gas suppliers need to enter data on the Natural Gas Supply Reporting page, under the heading Natural Gas Supplied – Provisional Emissions Number Under Section 33.

For a section 22AA interim emissions report, reporters are required to report supplies of natural gas for which an OTN has not been quoted. Where an OTN has been quoted reporters should not report the supply for their section 22AA interim emissions report.

Reporters should click the Add supply of Natural Gas button to add supplies of natural gas made without the quotation of an OTN, and then select no from the first drop-down box before filling in the relevant details. Save the details with the save button found at the very bottom of the screen.

Screenshot showing where in EERS Natural Gas Suppliers can enter amounts of natural gas supplied without the quotation of an OTN. 

Figure 2: Enter the details of amounts of natural gas that the natural gas supplier has supplied without the quotation of an OTN.

A summary of the data entered is shown underneath the table.

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Landfill and solid waste

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What is the connection between legacy and covered emissions and legacy and non-legacy waste?

Legacy waste: waste deposited in a landfill prior to 1 July 2012
Non-legacy waste: waste deposited in a landfill on or after 1 July 2012
Legacy emissions from the operation of a landfill facility: emissions from legacy waste
Covered emissions from the operation of a landfill facility: scope 1 emissions of greenhouse gas:

  • that are released into the atmosphere in Australia as a direct result of the landfill facility's operations, and
  • for which methods or criteria are specified under the National Greenhouse and Eneragy Reporting (Measurement) Determination 2008 by which the emissions can be measured.

Covered emissions include the following emissions relating to a landfill facility:

  • emissions from non-legacy waste
  • emissions from the biological treatment of solid waste
  • emissions from the combustion of petroleum-based oils and greases
Covered emissions do not include the following emissions relating to a landfill facility:
  • legacy emissions from the operation of a landfill facility.
  • emissions from a closed landfill facility that has not accepted any waste since 1 July 2012.
  • emissions from the combustion of certain liquid fuels1 or compressed natural gas that have been subject to any duty under the Customs Tariff Act 1995 or the Excise Tariff Act 1921.
  • emissions from solid waste disposal or biological treatment of solid waste at a landfill facility that emits less than 10 000 tonnes of CO2-e from solid waste disposal at the landfill in a year.

1 See section 30 (2) of the Clean Energy Act 2011 for a listing of the fuels.

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Are closed landfills covered under the Clean Energy Act?

A 'landfill facility' is defined in section 5 of the Clean Energy Act as 'a facility for the disposal of solid waste as landfill, and includes a facility that is closed for the acceptance of waste'. This means that a person that has operational control of a liable landfill facility, (even if it has permanently closed at some time after 30 June 2012), will be liable for covered emissions from that facility and must report each year until the facility's emissions (combined legacy and covered) drop below the 25 000 tonnes CO2-e threshold.

Landfills that closed before 1 July 2012 are not subject to the carbon pricing mechanism.

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Am I liable for composting emissions and in what year?

Biological treatment of solid waste includes composting, anaerobic digestion of solid waste and the mechanical-biological treatment of solid waste.

You will have a liability under the carbon pricing mechanism for emissions from biological treatment of solid waste if:

  • the biological treatment takes place at a facility that is made up in whole or in part by a landfill and forms part of the landfill facility, and
  • the facility's combined covered and legacy emissions meet or exceed the Clean Energy Act threshold of 25 000 tonnes of CO2-e.

Unlike waste deposited into landfill, there no delay in emissions from the biological treatment of solid waste. Consequently, any liability for emissions from biological treatment of solid waste such as composting undertaken at the landfill facility will occur in the year that the composting takes place.

For further guidance on whether biological treatment activities occur at a landfill, see the Guideline for landfill operators.

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What is the difference between composting and shredding?

Composting is the biological treatment of solid waste as outlined in section 5.22 of the NGER Measurement Determination. Removal of plant material from the waste stream for shredding is not considered to be biological treatment of solid waste.

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How do I know if my council is a controlling corporation?

If an entity is a controlling corporation and meets a corporate group or facility threshold under the NGER Act, it will be required to register and report under the NGER Act. A controlling corporation is defined as a constitutional corporation that does not have a holding company incorporated in Australia.

A constitutional corporation is defined to mean a corporation to which paragraph 51(xx) of the Constitution applies.

Councils will need to assess whether they are a 'constitutional corporation' and meet the other requirements for registration as a controlling corporation.

In considering whether it is a constitutional corporation, a council should firstly determine whether it is incorporated. If it is incorporated, the council should consider:

  • if it receives payment for any services it delivers
  • if it does, whether the services and the fees charged are of a commercial nature (an indication of this may be that the council provides services for a price in competition with other providers, and may be contrasted with a situation where there is a statutory obligation to pay for a particular service)
  • if the services and fees are of a commercial nature, whether a sufficiently significant proportion of the council's activities is made up of these trading activities.

As an example, if a council receives fees from a landfill it owns, it is relevant whether the council competes with other commercial landfills in the local waste disposal market or whether it accepts commercial or industrial waste, or domestic waste from beyond the council boundaries. These types of activities are likely to be considered 'trading' in character. The council should consider whether a sufficiently significant proportion of the council's overall activities are trading activities such as these types of landfill operations (revenue from 'trading activities' against 'non-trading activities' may be indicative), such that the council would be characterised as a 'trading corporation'.

Each council should examine its particular circumstances when considering whether it is a constitutional corporation. If councils are unsure if they are a constitutional corporation they should seek independent legal advice that addresses their particular circumstances and activities. The Clean Energy Regulator recommends that councils document their decision making on this matter.

If you think you are a controlling corporation refer to the guideline on Registration as a controlling corporation.

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If my Council is a Controlling Corporation do I need to report under both sections 19 and section 22A?

If your Council is a controlling corporation with operational control of the liable landfill facility, then it will need to report under both Section 19 and Section 22A of the NGER Act.

Where a controlling corporation has a group member with operational control of a liable landfill facility, then the controlling corporation will report under Section 19 and its group member will report under section 22A.

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Can you be penalised retrospectively if you believe you are under-threshold and find out later that you were over-threshold?

Yes. Liable entities are responsible for determining their liabilities and obligations under the law, and for applying the law to their individual circumstances. If a liable entity erroneously determines that it is not liable and later finds that it meets the Clean Energy Act threshold it will be required to meet its liability under the carbon pricing mechanism. That liability may be met by surrendering eligible emissions units, or by paying a unit shortfall charge if the surrender deadline has passed. In addition, civil penalties may apply for failure to register and report by the due date.

The Clean Energy Regulator also has powers to investigate and enforce the legislation. Controlling corporations and liable entities have record keeping obligations under the NGER Act.

The NGER Act allows for greenhouse and energy audits to be undertaken of persons who must report under the NGER Act. The purpose of greenhouse and energy audits is to determine the extent to which reporters have, or have not complied, with the requirements of the NGER Act and Regulations. Such audits can be required by the Clean Energy Regulator in particular cases.

The Clean Energy Regulator has powers to obtain information, including your records, to ensure compliance with the carbon pricing mechanism. These include powers which can be used where necessary to require production of information and documents, and to inspect premises. Penalties range in seriousness from administrative penalties and infringement notices to substantial civil penalties and criminal sanctions for dishonest or fraudulent behaviour.

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What is a landfill facility under the Clean Energy Act?

A 'landfill facility' is defined in section 5 of the Clean Energy Act as 'a facility for the disposal of solid waste as landfill, and includes a facility that is closed for the acceptance of waste'. This means that a person who has operational control of a liable facility, even if it is permanently closed, will be liable for emissions from that facility and must continue reporting each year until the facility's emissions (combined legacy and covered) drop below the 25 000 tonnes CO2-e threshold. However, if the facility has not accepted waste since 1 July 2012, then it will not have covered emissions, and there is no liability for waste from the facility.

Landfill facilities that emit less than 10,000 tonnes of CO2-e from solid waste disposal at the landfill (the 10,000 level) will not be subject to the carbon pricing mechanism in relation to emissions from solid waste disposal or biological treatment of solid waste. This is due to the National Greenhouse and Energy Reporting (Measurement ) Determination 2008 not including a method or criteria for measuring such emissions from facilities that do not meet the 10,000 level mentioned above.

A 'facility' is defined by section 9 of the NGER Act as an activity or series of activities (including ancillary activities) that involve greenhouse gas emissions, the production of energy or the consumption of energy, and that either:

  • forms a single undertaking or enterprise that meets the requirements of the National Greenhouse and Energy Reporting Regulations 2008 (NGER Regulations), or
  • is declared by the Clean Energy Regulator to be a facility under section 54 or 54A of the NGER Act.

The definition of facility is necessarily broad, as it is intended to cover a number of varied and complex situations. The onus is on liable entities to ensure that their grouping of activities as facilities or separate facilities is consistent with the legislation.

For further guidance on defining your facility see the Supplementary guideline: Defining facilities.

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Will I have an Emissions Number and a liability if I have operational control of a liable landfill facility that has no other covered emissions other than the combustion of petroleum-based oils and greases?

Yes. Covered emissions for a landfill facility include:

  • emissions from non-legacy waste
  • emissions from the biological treatment of solid waste
  • emissions from the combustion of petroleum-based oils and greases

The relevant method in the National Greenhouse and Energy Reporting (Measurement) Determination 2008 assumes that methane emissions are not released until the year after waste is deposited into a landfill. Therefore there will be no covered emissions from waste deposited into a landfill until the year after the waste is deposited.

Emissions from the biological treatment of waste and emissions relating to combustion of petroleum-based oils and greases are taken to be released immediately. These emissions will be counted in the year that the activities occur. If you do not have a composting activity that forms part of your facility, then you will not have covered emissions from composting.

However, if you have emissions from combusting petroleum-based oils and greases, then these emissions will be covered emissions and will attract a liability in the year that they are combusted if the Clean Energy Act threshold for the facility is met.

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Can we get pre-approval from the Regulator for our threshold?

No. Ultimately, liable entities are responsible for determining their liabilities and obligations under the law, and for applying the law to their individual circumstances. Users must therefore seek their own independent advice before taking any action or decision on the basis of their emissions estimates.

The Clean Energy Regulator cannot be held responsible for the data provided by liable entities on their own facilities and will in no event be liable for any direct, incidental or consequential loss or damage resulting from incorrect emissions estimates calculated as a result of inaccurate, incomplete or out-of-data data.

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If you believe that the defaults set out in the Determination are not accurate can we use actual data?

Under the National Greenhouse and Energy Reporting (Measurement) Determination 2008 (the Determination) you may use either Method 1 or Method 2 to calculate the tonnage of waste received at the landfill.

Section 5.10 sets out the rules for estimating this data under Method 1. In the 2012/13 Determination, Section 5.10 states that the tonnage of each waste stream must be estimated using the data on the tonnage of waste received at the landfill (if you are required to collect this data under the law of the State or Territory in which the landfill is located), or using the default values set out in the 2012-13 National Greenhouse and Energy Reporting (Measurement) Determination 2008 for the State or Territory in which the landfill is located (if you are not required to collect this data under the law of the Stat or Territory in which the landfill is located).

This means that in 2012-13, you can only use actual data if you are using Method 1 where you are required to collect this data under State or Territory law.

Method 2 sets out the rules for using your own data if you believe the defaults are not accurate. Using this method, you are able to calculate methane released by your landfill using your own data in accordance with the formulae given in Division 5.2.3. In 2013/14, changes to the Determination will mean that you will be able to use actual data under Method 1 if you choose to do so. However, this will only apply from 2013/14 onwards and cannot be applied to earlier reports retrospectively.

Liquid Fuel Opt-In Scheme

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What is the Liquid Fuel Opt-In Scheme and what is its purpose?

From 1 July 2012 business users of certain liquid fuels will pay an effective carbon price through the fuel tax system by receiving a reduced fuel tax credit or, in the case of aviation fuel, paying an increased excise or excise equivalent customs duty.

Part 3, Division 7 of the Clean Energy Act 2011 provides that regulations may formulate a Scheme that allows eligible users of certain fuels to 'opt-in' to the carbon pricing mechanism known as the Liquid Fuel Opt-in Scheme available from 1 July 2013.

The purpose of the Opt-in Scheme is to allow large users of liquid fuel to opt-in to the carbon pricing mechanism for the potential emissions embodied in the fuel they use, rather than facing an effective carbon price through the fuel tax or excise systems.

The Opt-in Scheme will allow a person (except for individuals and foreign persons) to be declared by the Clean Energy Regulator as the designated opt-in person (DOIP) for the eligible fuel acquired, manufactured or imported for use ('used') by itself, the members of a GST group or participants in a GST joint venture. The DOIP will then become a liable entity under the Clean Energy Act 2011. A DOIP may be liable for its own use of liquid fuel, or for the liquid fuel use of the members of its GST group or participants in its GST joint venture who are members or participants on 1 July of the relevant financial year.

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Where can I obtain information regarding the Opt-in Scheme?

Information Source
Frequently asked questions On this page
The opt-in guideline document sets out information about the Opt-in Scheme to assist potential applicants and other stakeholders in understanding the scheme. Guidelines
The opt-in application form and the guidance on completing the application form. Applications have closed. A new form for the next financial year will be made available soon.
The Clean Energy Act 2011 legislation Clean Energy Act 2011
The Clean Energy Regulations 2011 legislation Clean Energy Regulations 2011
The Explanatory Statement describing the Clean Energy Amendment Regulation 2012 (No. 7). Clean Energy Amendment Regulation 2012 (No. 7)
Information about the application of fuel tax law, including the definitions of words used in the context of fuel tax. Australian Taxation Office
Information about the Clean Energy Regulator Contact us

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Who administers the Opt-in Scheme?

The Opt-in Scheme is administered by the Clean Energy Regulator with the assistance of the Australian Taxation Office and, where appropriate, the Australian Customs and Border Protection Service (Customs).

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When can I opt-in, and when is my application due?

The Opt-in Scheme commences on 1 July 2013. As a result, the 2013-14 financial year will be the first year for which an entity can elect to opt-in. An application to opt-in must be given to the Clean Energy Regulator by 31 March of the financial year immediately preceding the financial year in which the opt-in is to become effective. As 31 March 2013 fell during Easter, the last day for applications to opt in for the 2013–14 financial year was 2 April 2013.

The Clean Energy Regulator may seek further information at any point and the applicant will have 14 days from the date of request to provide the information.

The applicant may withdraw its application at any time before the decision by the Clean Energy Regulator is made.

Applicants should consider their particular circumstances, including the time required to make any necessary adjustments to their business prior to the commencement of the relevant financial year in determining when an application will be submitted.

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What do I need to do to opt-in?

A person who is considering opting in should review the information available about opting in, including the information described in the Liquid Fuel Opt-in Scheme guideline.

Applicants should download a copy of the application form, and the application form guidance, which will be available from the forms and calculators page while applications are open.

To declare a person to be a designated opt-in person, the Clean Energy Regulator must be satisfied that the person meets conditions specified in the Clean Energy Regulations 2011. The application form allows applicants to demonstrate that they meet the following conditions:

  • the applicant is able to apply.
  • the applicant is likely to pass the eligibility test.
  • the applicant passes the threshold test.
  • the applicant has obtained consents as required.

Applications for the 2013–14 financial year must be given to the Clean Energy Regulator by midnight EDST on 2 April 2013.

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How does an applicant pass the eligibility test?

See the eligibility test section of the Liquid Fuel Opt-in Scheme guideline for details.

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How does an applicant pass the threshold test?

See the threshold test section of the Liquid Fuel Opt-in Scheme guideline for details.

When is consent required and what financial obligation does it involve?

The Clean Energy Regulations 2011 set out when a person must provide consent to an applicant applying to be a designated opt-in person. Persons providing consent are also taken to have guaranteed the payment of certain amounts for which the DOIP may become liable.

Details regarding consents are available in the consent section of the Liquid Fuel Opt-in Scheme guideline.

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Who is the fuel user (for the purposes of the threshold test)?

Where the applicant is applying to be a DOIP as: The fuel user is:
The representative member of the GST group GST group
The operator of GST joint venture GST joint venture
All other cases The applicant

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How long will it take to process my application?

The Clean Energy Regulator is required by the Regulations to take all reasonable steps to ensure that a decision is made on an application within 90 days of:

  • receiving the application, or
  • the applicant providing the latest requested information (where the Clean Energy Regulator requests further information from the applicant).

The Clean Energy Regulator is committed to processing applications in a timely manner. Applicants can assist the processing of their applications by ensuring they are complete.

If applicants have any concerns about the progress of their application, they should contact the Clean Energy Regulator.

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Do I have to re-apply every year?

After a person has been declared a DOIP they do not have to re-apply every year, they remain opted-in until the Clean Energy Regulator opts them out. However, in addition to other reporting requirements, DOIPs are required to provide a report to the Clean Energy Regulator by 14 July each financial year, commencing 2014. The report must be in a form approved by the Clean Energy Regulator.

The Clean Energy Regulator has the power to opt-out DOIPs that do not provide this report.

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What is the relationship of the Opt-in Scheme to fuel tax credits?

From 1 July 2012, users of certain liquid fuel pay an effective carbon price through the fuel tax system administered by the Australian Taxation Office, by receiving a reduced fuel tax credit or, in the case of aviation fuel, by paying an increased excise or excise equivalent customs duty. Some uses of liquid fuel, such as off-road transport and heavy vehicles, are excluded from these arrangements.

From 1 July 2013 there will be no reduction in fuel tax credits for fuel that is covered by the Opt-in Scheme. Instead if a designated opt-in person (DOIP) exists for the liquid fuel use of a person, then a full fuel tax credit entitlement will apply. Persons using aviation fuel that is covered by the Opt-in Scheme will receive a fuel tax credit for the increased excise equivalent customs duty paid due to the carbon price. The DOIP will then meet its obligations as a liable entity under the carbon pricing mechanism.

Further information about fuel tax credit is available by searching for 'fuel tax credit' on the ATO website.

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Is aviation fuel treated the same as other liquid fuels with respect to fuel tax credits?

Regulation 3.31 of the Clean Energy Regulations 2011 provides, for the purposes of the Opt-in-Scheme, that when determining whether an entity is entitled to a fuel tax credit in respect of an acquisition, manufacture or import of an amount of taxable fuel, that section 41-30 of the Fuel Tax Act 2006 is to be disregarded. This exclusion is required to allow for the equal treatment of aviation and non-aviation fuel for the purposes of eligibility to apply under the Opt-in Scheme and the calculation of a DOIP's liability under the Scheme.

See the aviation fuels section of the Liquid Fuel Opt-in Scheme guideline for further details.

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At what point does a DOIP become liable for liquid fuel?

DOIPs are liable for liquid fuel that is part of their opt-in amount; however they may not be liable for all the liquid fuel in their opt-in amount. The Liquid Fuel Opt-in Scheme guideline on the Opt-in Scheme has further details about the opt-in amount.

The DOIP's opt-in amount includes the embodied emissions of specified taxable fuels when they are acquired, manufactured or imported, rather than the actual emissions when the fuels are combusted or emitted. This is because liability under the Opt-in Scheme generally aligns with the point at which a person is entitled to a fuel tax credit under the Fuel Tax Act 2006.

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What is meant by fuel use?

Fuel tax law is administered by the ATO. For more information about the application of fuel tax law, including the definitions of words used in the context of fuel tax, please contact the ATO.

Coal-fired generation Assistance Package

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Who can apply for free carbon units?

Applications can be made by the owner, operator or controller of a coal-fired generation complex. If the owner, operator and controller are different entities, all three must declare their support for the application.

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When were applications due?

Applications for Energy Security Fund Coal-fired Generation free Carbon Units assistance closed at 5:00pm on 2 May 2012.

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How were applications assessed?

Applicants were required to provide information about the nameplate rating, historical energy and emissions intensity of the generation complex. This information was used to determine if the generation complex was eligible for assistance and to calculate an Annual Assistance Factor. The Annual Assistance Factor is used to determine the portion of available free carbon units that will be issued in respect of the generation complex.

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What is the formula used to calculate the Annual Assistance Factor?

The formula used to calculate the annual assistance factor is:

Historical energy x (emissions intensity—0.86)

This formula is set out in section 167 of the Clean Energy Act 2011 in relation to a certificate of eligibility for coal-fired generation assistance (free carbon units).

For more detail, see how is the Annual Assistance Factor calculated?

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Who will be issued free carbon units?

The issue of free carbon units is conditional on us granting recipients a Certificate of Eligibility for coal-fired generation assistance.

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When will Certificates of Eligibility be issued?

Certificates of Eligibility were issued on 6 June 2012. Information on the generation complexes eligible for the Energy Security Fund Coal-fired Generation assistance free carbon units is now available on this website.

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When will free carbon units be issued?

Free carbon units will be issued to eligible generator complexes on 1 September 2013 (or the next working day) and then annually until 2016–17.

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How many units will be issued under the scheme?

A total of 41.705 million free carbon units will be issued each year for four years. These free units will be divided among eligible applicants in accordance with the Annual Assistance Factor determined during the application process.

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What conditions must eligible applicants meet to be issued with free units?

Once applicants are assessed as eligible for free carbon units, they must meet compliance conditions each year for four years before being issued with their allocation of free carbon units. These conditions include:

  • lodging a Clean Energy Investment Plan (CEIP) with the Department of Resources, Energy and Tourism by 15 August each year for four years, starting in 2013, and
  • meeting the conditions of the Power System Reliability Test (PSRT) on 1 April of the previous eligible financial year before units can be issued on 1 September of the eligible financial year, for four years starting in 2013.

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How is the Annual Assistance Factor calculated?

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The formula used to calculate the annual assistance factor is:

Historical energy x (emissions intensity—0.86)

This formula is set out in section 167 of the Clean Energy Act 2011 in relation to a certificate of eligibility for coal-fired generation assistance (free carbon units).

Where:

Historical energy is calculated in accordance with section 167 of the Clean Energy Act, that is:

  • if the generation complex is a generation complex that entered service on or before 1 July 2008 the total number of gigawatt hours of electricity generated by the generation complex during the period beginning on 1 July 2008 and ending on 30 June 2010, as measured at all generator terminals of the generation complex, or
  • if the generation complex is a generation complex that entered service after 1 July 2008 14.016 multiplied by the number of megawatts in the nameplate rating of the generation complex as at the day the generation complex entered service.

Emissions intensity is calculated in accordance with section 168 of the Clean Energy Act, that is the emissions intensity of the generation complex worked out to three decimal places using the formula:

Carbon dioxide equivalence of emissions
Gigawatt hours of electicity generated

Where:

Carbon dioxide equivalence of emissions has the same meaning as set out in section 168 of the Clean Energy Act, that is the total number of kilotonnes (kt) of the carbon dioxide equivalence of the greenhouse gases emitted from the combustion of fuel in the generation complex for the purposes of the generation of electricity during the period beginning on 1 July 2008 and ending on 30 June 2010.

Gigawatt hours of electricity generated has the same meaning as section 168 of the Clean Energy Act, that is the total number of gigawatt hours of electricity generated by the generation complex during the period beginning on 1 July 2008 and ending on 30 June 2010 as measured at all generator terminals of the generation complex.

However the emissions intensity of a generation complex is taken to be 1.3 kt CO2-e per GWh if the number worked out to 3 decimal places using the formula above is greater than 1.3 kt CO2-e per GWh.

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Examples of calculating the annual assistance factor for a generation complex

Example 1—A generation complex that entered service on or before 1 July 2008

Historical energy—The applicant is required to provide historical data concerning the generation of electricity by that generation complex over the period from 1 July 2008 to 30 June 2010.

The CER may verify this data through comparison with data publicly available from independent bodies such as the market operator in the market in which the generation complex operates.

Emissions intensity—The applicant is required to provide historical information concerning the emissions produced by the generation complex over the period 1 July 2008 to 30 June 2010.

The primary source for this information is likely to be information reported to the Australian Government as required under the National Greenhouse and Energy Reporting Act 2007 (NGER Act).

Calculation of annual assistance factor—Assume that, based on the information contained in an application (and subject to any additional information), the Clean Energy Regulator estimates in relation to a particular generation complex, historical energy of 16 000 GWh of electricity, with the production of 20 000 kt CO2-e over the two year period in question.

Based on these estimates, the CER estimate of the generation complex's emissions intensity will be:

20 000 kt of CO2-e / 16,000 GWh = 1.250 kt of CO2-e per GWh

Accordingly, the generation complex's annual assistance factor would be:

16 000 × (1.250 - 0.86) = 6 240.000

Example 2—A generation complex that entered service after 1 July 2008

Historical energy—The applicant is required to provide the CER with the nameplate rating of the generation complex as registered with the relevant market operator as of 1 July 2010.

For example, the generation complex's nameplate rating might be 500 MW. This being the case, the Clean Energy Regulator estimate of the historical energy of the generation complex over a notional two year period would be:

500 × 14.016 = 7 008 GWh

The applicant is required to provide historical data concerning the generation of electricity by that generation complex over the period from 1 July 2008 to 30 June 2010. Note that this may be different to the 'historical energy' determined by reference to the nameplate rating (as the generation complex may not have been in service for the entire two year period).

Emissions intensity—The applicant is required to provide historical information concerning the emissions produced by the generation complex over the period 1 July 2008 to 30 June 2010.

Calculation of the annual assistance factor—Assume that actual electricity generated is 3 750 GWh, with the production of 4 000 kt of CO2-e over the two year period in question.

Based on these estimates, the CER estimate of the generation complex's emissions intensity would be:

4 000 kt of CO2-e per GWh / 3,750 GWh = 1.067 kt of CO2-e per GWh

Accordingly, the generation complex's annual assistance factor would be:

7 008 × (1.067 - 0.86) = 1 450.656​​​​​​

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Jobs and Competitiveness Program

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How will the assistance work?

Assistance is provided through allocation of units to eligible entities undertaking an eligible emissions-intensive trade-exposed activity prescribed in regulations.

Assistance will generally be based on an individual entity's previous year's level of production. In the second and all subsequent years of the Jobs and Competitiveness Program, a true-up mechanism applies in the formula for calculating assistance to account for the difference between the previous financial year's production upon which allocations were based and the actual production that occurred in that year.

For more information, see Jobs and Competitiveness Program.

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Am I eligible for assistance?

Qualifying activities are listed and defined in the Clean Energy Regulations 2011.

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How do I apply for assistance through the Jobs and Competitiveness Program?

The application period for a financial year is from 1 July to 31 October of that year. The application form will be available prior to the start of the application period.

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Are there audit guidelines for the Jobs and Competitiveness Program application?

Yes, see the audit report guidelines that provide guidance for you and your auditor to prepare the audit report that is required as part of your application.

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Can an application be made under the Jobs and Competitiveness Program in relation to a facility that does not have a direct liability under the carbon price mechanism?

The Jobs and Competitiveness Program is intended to provide assistance to emissions-intensive trade-exposed entities irrespective of direct liability (recognising that entities may face either or both direct liability costs and indirect costs passed through by liable entities for electricity and natural gas consumed in emissions-intensive, trade-exposed activities).

As such, an application for free carbon units can be made under the Jobs and Competitiveness Program in relation to an emissions-intensive trade-exposed activity carried on at a facility that does not pass the relevant liability threshold test specified in Part 3 of the Clean Energy Act 2011 (sections 20 to 25).

However, for such a facility a sub-threshold emissions adjustment applies (as described in clause 912 of Schedule 1 to the Clean Energy Regulations 2011). This reduces the assistance provided by the allocation of free units for direct emissions which do not attract a liability.

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What is the sub-threshold emissions adjustment?

In general, if a facility received assistance under the Jobs and Competitiveness Program for a year but did not pass the relevant liability threshold test specified in Part 3 of the Clean Energy Act 2011 (sections 20 to 25) for that year, then an adjustment (the “sub-threshold emissions adjustment”) is required to reduce the overall number of carbon units to be allocated.

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How is the sub-threshold emissions adjustment applied?

For the first financial year in which a Jobs and Competitiveness Program application is made for a facility, if the facility does not pass the relevant liability threshold test in that financial year, then Method 1 in clause 912 of the Clean Energy Regulations 2011 is used to reduce the overall number of carbon units to be allocated in the second year application.

Under Method 1, the reduction in the amount of units will be equal to total covered scope 1 emissions from the operation of the facility in the previous financial year, less emissions from the combustion of natural gas in that year, and adjusted for the carbon price differences and the interest rate (r).

For second and subsequent year applications, an applicant may choose to use Method 2 rather than Method 1 to work out the sub-threshold emissions adjustment. Method 2 allows the applicant to waive the receipt of EI (direct emissions) allocations for the current application year and where this method is chosen the sub-threshold emissions adjustment is taken to be zero.

Ultimately, it is a condition that allocations provided in relation to the carrying on of an EITE activity in each year at facilities that do not pass the relevant liability threshold test require a sub-threshold adjustment via either Method 1 or Method 2.

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What is the interest rate (r)?

Any ex-post adjustments to allocations under the Jobs and Competitiveness Program (such as the previous year adjustment or sub-threshold adjustment) will take into account the interest rate (r).

r is the per annum yield (expressed as a percentage) for BBB rated corporate bonds with one to five years maturity, as published by the Reserve Bank of Australia, that is the latest daily rate published prior to the day an application is approved.

In estimating any ex-post adjustments, it is suggested that applicants use the most recent daily rate published by the Reserve Bank of Australia prior to lodging an application. The number of carbon units to be allocated will be calculated by the Clean Energy Regulator based on the latest daily rate published prior to the day an application is approved.

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If successful in my application, when will I receive my first units?

The Clean Energy Regulator will take all practical measures to assess applications within 60 days of receiving a complete application. In some cases it may be necessary to request clarification or additional information.

Once an application is approved, during the fixed price period units are issued in a staged process which corresponds with the requirement to pay liability in two stages through the provisional surrender obligation.

  • The first allocation of free carbon units (as per paragraph 902(2)(a) of Schedule 1 to the Regulations) is issued as soon as practicable after an application for assistance is approved.
  • The second allocation of free carbon units (as per paragraph 902(2)(b) of Schedule 1 to the Regulations) is issued as soon as practicable in the following financial year.

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Do I require a Registry Account to receive units?

Yes. While this is a separate process that can be undertaken at any time, units cannot be issued until you can provide your Australian Registry of Emissions Units (ANREU) account details. If you are not already registered, you can start by completing the application form.

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Can a holder of a liability transfer certificate (LTC) issued after 30 June 2012 be eligible to apply for free carbon units under the Jobs and Competitiveness Program in the first year of the carbon pricing mechanism?

The Clean Energy Regulations 2011 allow the holder of an LTC to be an eligible applicant under the Jobs and Competitiveness Program, instead of the person with operational control of the facility—if the LTC was in force on 30 June of the previous financial year. In the first year of the carbon pricing mechanism, the holder of an LTC may be eligible to apply instead of the person with operational control if the LTC was issued prior to an application for assistance under the Jobs and Competitiveness Program and had a start day of 1 July 2012 (however, if the LTC is not issued prior to the application for assistance under the Jobs and Competitiveness Program, the person with operational control is eligible to apply).

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How do I apply for a Large User Electricity Certificate?

An eligible large user of electricity was required to apply before 1 August 2012 for a Large User Electricity Certificate to be issued.

The Clean Energy Regulations 2011 (clauses 908 to 910 of Schedule 1) set out the requirements relating to applications for Large User Electricity Certificates.

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What activities are included under the Jobs and Competitiveness Program?

See emissions-intensive trade-exposed activities.

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General questions

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Which notices will I receive from the Clean Energy Regulator in the final acquittal period?

The notices you will receive during the final acquittal period are outlined under step 5 of the steps for liable entities.

After a liable entity reports their emissions number for a financial year in the Emissions and Energy Reporting System (EERS), it will be published on the Liable Entity Public Information Database (LEPID) in early November. An email will be sent to all liable entities who reported an emissions number after the emissions number is published and after the emissions number has been displayed in their ANREU account. Your ANREU account will display your current unit position statement following the publication of your emissions number. This statement will include your emissions number, the number of units surrendered, the number of units pending surrender and the projected net unit position.

Your unit position statement reflects all complete ANREU transactions and provides the information previously provided on the Statement of Account.

A payment advice will be emailed to the ANREU primary account representative and the approver of the ANREU transaction once a purchase request is received by the Clean Energy Regulator. The turnaround for this is expected to be one business day. The payment advice contains payment information and bank details to make payment to the Regulator.

A receipt of payment will be emailed to your ANREU primary account representative once the payment has been verified in the Regulator's bank account.

A notice of assessment will be issued to you at the conclusion of the surrender deadlines (progressive liability concluding 15 June and final liability concluding 1 February, or where these dates falls on a weekend or public holiday, by the following business day). The assessment for the period will include one of three positions:

  • successful acquittal: where the number of eligible units surrendered equals the liability,
  • successful acquittal with a surplus: where the number of eligible units surrendered is greater than the liability,
  • shortfall: where the number of eligible units surrendered is less than the liability.

If you want these notices to be sent to a generic email address in your company, please contact us on CER-LiabilityManagementOperationsSection@cleanenergyregulator.gov.au.

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When will my emissions number appear in ANREU?

Your emissions number will appear in your ANREU account once it has been published on the Liable Entity Public Information Database (LEPID) in early November. You will be notified by email when this occurs. There will be some processing time involved between publication on LEPID and display in your ANREU account.

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What is an estimation error unit shortfall?

If you reported an interim emissions number (IEN) to the clean Energy Regulator during the progressive surrender period using the reasonable estimate approach, but you underestimated the IEN, then you will incur an estimation error shortfall charge.

As a direct emitter, you may calculate your IEN from a facility in one of two ways:

  1. by calculating 75 per cent of the sum of all the provisional emissions numbers (PENs) from the facility for the previous financial year; or
  2. by making a reasonable estimate of 75 per cent of your PENs from the facility for the current financial year.

If you choose the second method, you must be careful not to underestimate, as you will become subject to an estimation error unit shortfall charge if you underestimate.

You will incur an estimation error unit shortfall charge if 75 per cent of your PEN from a facility is greater than the estimated IEN which you reported to the Clean Energy Regulator from the facility.

For more information, see the estimation error unit shortfall fact sheet.

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When will the Clean Energy Regulator calculate any estimation error unit shortfalls?

Estimation error unit shortfalls for a fixed charge year will be calculated by the Clean Energy Regulator in early November following the end of that fixed charge year and before publication of the emissions numbers and estimation error unit shortfalls on the Liable Entity Public Information Database.

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Can free carbon units issued by the Clean Energy Regulator in September 2013 be used to acquit my 2012-13 carbon price liability?

Carbon units issued free of charge can only be surrendered against the year of their vintage. Thus, carbon units can only be surrendered against the 2012-13 compliance year if they have the vintage year of 2012-13. For the 2012-13 compliance year, the acquittal period ends on 3 February 2014 and, therefore, carbon units can only be surrendered until that date against that compliance year if they have a vintage year of 2012-13.

Carbon units with a vintage year of 2013-14 issued under the Jobs and Competitiveness Program (JCP) and the Energy Security Fund (ESF) in September 2013 can only be used to acquit liability for the 2013-14 compliance year.

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What happens if I don't surrender enough units to acquit my liability?

If you do not surrender enough units prior to the acquittal deadline of the relevant period, you will incur a ‘unit shortfall charge' for each unit in the unit shortfall. This unit shortfall charge is calculated as follows:

  • for the fixed price period, the unit shortfall charge is 130 per cent of the fixed price for the vintage year multiplied by the number of units in shortfall,
  • for the flexible price period (i.e., each financial year from and including the financial year 2015-16), the unit shortfall charge is 200 per cent of the ‘benchmark average auction price' for the previous financial year.

The unit shortfall charge creates an incentive to surrender units under the carbon pricing mechanism rather than pay the higher unit shortfall charge.

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How do I obtain eligible emissions units during fixed charge years?

To acquire, transfer, surrender and purchase eligible emissions units you must open an Australian National Registry of Emissions Units (ANREU) account.

Summary of eligible emissions units that can be surrendered against your carbon price liability:

  • Free carbon units issued by the Clean Energy Regulator under the Jobs and Competitiveness Program (JCP) and the Energy Security Fund (ESF). These carbon units are issued with a vintage year and expire at the end of 1 February following the fixed charge year for which they were issued.
  • Australian carbon credit units (ACCUs) generated through the Carbon Farming Initiative and issued by the Clean Energy Regulator. ACCUs do not have a vintage year. Any excess ACCUs surrendered will carry over to the next reporting period, subject to certain limitations applying to excess surrenders of ACCUs during fixed charge years.
  • Free carbon units and ACCUs on the secondary market. Liable and non-liable entities can use the secondary market to purchase free carbon units and ACCUs using ANREU.
  • Carbon units purchased directly from the Clean Energy Regulator. On purchase, these units are automatically surrendered in ANREU against your liability and cannot be traded.

During the fixed price period, liable entities can purchase carbon units directly from the Clean Energy Regulator during the progressive surrender period once they have reported their interim emissions number in EERS and during the final surrender period of a fixed charge year once their emissions number is published on the Liable Entity Public Information Database (LEPID).

International emissions units cannot be used to acquit liability during the fixed price period.

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What are the limitations around surrendering Australian carbon credit units (ACCUs)?

Information regarding the limitations on using Australian carbon credit units (ACCUs) is available in step 5 of the steps for liable entities.

An Australian carbon credit unit (ACCU) is a unit issued by the Clean Energy Regulator for greenhouse gas abatement activities undertaken as part of the Carbon Farming Initiative (CFI). Only eligible ACCUs can be surrendered for meeting a liability under the carbon pricing mechanism.

There is a limit on eligible ACCUs that can be used to acquit your liability in the fixed price period (2012-13 to 2014-15).

For the progressive surrender period (deadline 15 June or where this date falls on a weekend or public holiday, the following business day), the limit on ACCUs is calculated as five per cent of your interim emissions number.

For the final surrender period (deadline 1 February or where this date falls on a weekend or public holiday, the following business day), the limit on ACCUs is calculated as five per cent of your final emissions number minus any ACCUs surrendered in the progressive surrender period. If you did not surrender any ACCUs in the progressive surrender period, the limit is five per cent of your final emissions number.

There is an exception to these limits. If at least 50 per cent of your emissions are from landfill sources, there is no limit on the number of eligible ACCUs you can use to acquit your progressive or final liabilities. Also, there is no limit on the number of ACCUs that can be used to meet your annual unit liability in the flexible price period (from 1 July 2015).

ACCUs surrendered above the limits in the progressive or final surrender period will be carried forward to the next final surrender period. The Clean Energy Regulator cannot refund any excess ACCUs.

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How do I open an Australian National Registry of Emissions Units (ANREU) account?

Application forms for an ANREU account are available on our website. As the Clean Energy Regulator needs to undertake proof of identity and fit and proper person checks, please allow three months for the application to be processed.

We recommended you set up at least two account representatives in your account, and to have representatives approving each transaction.

For more information see Opening an ANREU account.

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What happens after the final acquittal deadline of 1 February?

Please note that the surrender deadline is 1 February or, where this date falls on a weekend or public holiday, the deadline is the following business day. As 1 February 2014 is a Saturday, the final surrender deadline for the 2012-13 compliance year is 3 February 2014.

Following the final acquittal deadline there are three possible outcomes:

  • you have successfully acquitted your liability,
  • you have successfully acquitted your liability but you have surrendered too many units and have a surplus, or
  • you have not surrendered enough units and are in shortfall.

The Clean Energy Regulator will review and assess the liability positions for all liable entities after the surrender deadline and we will send a notice of assessment to each liable entity. If you have a surplus and you only surrendered carbon units, your surplus will be refunded.

Caution should be taken to avoid a surplus if you surrender a mix of carbon units and ACCUs, as the surplus calculation under section 128(4) of the Clean Energy Act 2011 specifically disregards the eligible ACCUs that have been surrendered which can reduce the refund amount.

Liable entities who do not surrender enough units to acquit their liability by the surrender deadline will incur a unit shortfall charge. For the fixed price period, the unit shortfall charge is 130% of the fixed charge for each unit in shortfall. For 2012-13, the unit shortfall charge is 130 per cent times $23 for each unit in shortfall.

Liable entities in shortfall are required to pay the final unit shortfall charge by the sixth business day after 1 February. A late payment penalty of 20% per annum is applied on any outstanding shortfall charge not paid by the due date. Any unit shortfall and unpaid shortfall charges are published on the LEPID.

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When can I buy fixed price units from the Clean Energy Regulator?

Any entity with a liability during the progressive and final surrender periods can purchase carbon units from the Regulator.

During the progressive surrender period of a fixed charge year, you can only purchase fixed price carbon units once you have submitted your interim emissions numbers (IENs) to the Clean Energy Regulator.

During the final surrender period of a fixed charge year, you can only purchase fixed price carbon units after your emissions number (EN) is published on the Liable Entity Public Information Database (LEPID) and is displayed in your ANREU account.

You can apply to purchase fixed price units in your ANREU account up to a maximum of your liability less any eligible units previously surrendered in relation to that year before the surrender deadline.

You will be provided with a payment advice (similar to an invoice) following a request to purchase units. If payment is received before the deadline, the Clean Energy Regulator will issue units into your ANREU account and they will be surrendered automatically. You will receive a receipt of payment via email, and ANREU will record the transaction and display your new liability position.

To be able to issue units to you the Clean Energy Regulator must receive payment in its bank account by the surrender deadline of 1 February (or where this date falls on a weekend or public holiday, by the following business day). Please note that, as 1 February 2014 is a Saturday, the final surrender deadline for the 2012-13 compliance year is 3 February 2014.

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Where can I find concise descriptions on the characteristics of carbon units?

See ANREU for statements setting out a concise description of the characteristics of Australian carbon credit units, carbon units, Certified Emission Reductions, Emission Reduction Units, and Removal Units.

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Does the introduction of the clean energy legislation affect the way I have defined operational control of facilities under the NGER Act?

The definitions of 'operational control' and 'facility' under the Clean Energy Act 2011 are the same as the definitions in the National Greenhouse and Energy Reporting Act 2007 (NGER Act). However, a extra provision has been added under the NGER Act to allow nomination of operational control where more than one person has authority over operational and environmental policies.

For more information on these definitions, see the NGER Act supplementary guidelines.

See our forms and calculators page for relevant application forms.

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How do liability transfer certificates (LTCs) work?

Liability transfer certificates (LTCs) let the operator of a facility transfer its liability to another entity in specific situations. LTCs provide additional flexibility for businesses to manage emissions liabilities, either within corporate groups or where a business has financial control but not operational control over a facility.

There are two kinds of LTC applications:

  • a company may apply to us for a corporate group LTC to take on liability for a facility that is operated by another member of its corporate group, with the consent of the operator, or
  • an entity may apply for a financial control LTC to take on liability for a facility from the operator, where the entity has financial control over the facility and is in a different corporate group than the operator.

We issue LTCs and they are not transferable. We may not issue a LTC unless satisfied that the applicant has, and is likely to continue to have, access to information and financial resources as well as capacity to meet its obligations under the Clean Energy Act 2011.

For more information, see liability transfer certificates.

See also our forms and calculators page for the relevant application forms.

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What is the carbon liability for participants in an unincorporated joint venture?

Unincorporated joint ventures are treated differently depending on whether they are a mandatory designated joint venture or a declared designated joint venture for the purposes of the Clean Energy Act 2011.

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What is a mandatory designated joint venture?

A mandatory designated joint venture is when an unincorporated joint venture has a facility, but operational control of the facility is shared by more than one person, with none of those people having the greatest operational control of the facility.

Liability for emissions from the facility is shared between the joint venture participants in proportion to their interest in the facility. Applying liability directly to joint venture participants will facilitate the pass-through of the carbon price under contracts for sale of the output of the facility. Please note: you are required to report Mandatory designated joint ventures.

For more information, see joint ventures.

See also our forms and calculators page for the relevant application forms.

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What is a declared designated joint venture?

A Declared Designated Joint Venture is when a unincorporated joint venture has a facility and there is an identified operator, who may be one of the joint venture participants or a third party.

Joint venture participants may voluntarily assume emissions liability, with the operator's consent. This provides joint venture participants more flexibility in managing emission liabilities by allowing them to directly take on the liabilities from the operator.

For more information, see joint ventures.

See also our forms and calculators page for the relevant application forms.

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What is 'progressive or provisional surrender'?

For each of the first three years of the carbon pricing mechanism (the fixed price period from 1 July 2012 to 30 June 2015), most liable entities will surrender emissions units in two stages. To avoid paying a shortfall charge, these liable entities must:

  • surrender sufficient emissions units to account for 75 per cent of their estimated emissions for the financial year by 15 June in that financial year, and
  • surrender eligible emissions units to cover the remaining liability by 1 February of the following year.

For example, an entity must surrender units to cover 75 per cent of its estimated emissions for 2012-13 by 15 June 2013 and then surrender sufficient units to cover its remaining emissions for 2012-13 by 1 February 2014, or incur a shortfall charge.

The shortfall charge will apply for any shortfalls in payment at either compliance date. The charge is set at a level greater than the value of the units not surrendered.

For more information, See steps for liable entities.

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If my business is NGER registered, do I still have to report if I only use fuel and electricity?

If you are registered under the National Greenhouse and Energy Reporting Act 2007 (NGER Act) you must continue to report your greenhouse gas emissions, energy consumption and production—even if you are not a liable entity under the carbon pricing mechanism. This is because the NGER Act is designed to support more than just the carbon pricing mechanism.

Reporting this information under the NGER Act fulfils a range of Commonwealth, state and territory reporting requirements and assists Australia to meet our reporting requirements under the Kyoto Protocol.

If you are registered under the NGER Act you must continue to report your greenhouse gas emissions (including the uncertainty associated with scope 1 emissions), energy consumption and production. Uncertainty calculations do not impact on carbon price liability.

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Are emissions from petroleum based oils and greases used as lubricants covered emissions under the carbon pricing mechanism?

Yes. Section 30 of the Clean Energy Act 2011 defines covered emissions for the purposes of the carbon pricing mechanism. That section identifies certain exclusions including emissions attributable to the combustion of:

  1. liquid petroleum fuel; or
  2. liquefied petroleum gas; or
  3. liquefied natural gas; or
  4. compressed natural gas,

that has been subject to any duty under the Customs Tariff Act 1995 or the Excise Tariff Act 1921.

Excise is administered by the Australian Tax Office and the Australian Customs and Border Protection Service. For questions relating to which fuels excise applies to, you need to contact the Australian Taxation Office. Further information can be found on the ATO website.

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Are emissions from the consumption of acetylene covered emissions under the carbon pricing mechanism?

Yes. Section 30 of the Clean Energy Act 2011 defines covered emissions for the purposes of the carbon pricing mechanism. That section identifies certain exclusions including emissions attributable to the combustion of:

  1. liquid petroleum fuel; or
  2. liquefied petroleum gas; or
  3. liquefied natural gas; or
  4. compressed natural gas,

that has been subject to any duty under the Customs Tariff Act 1995 or the Excise Tariff Act 1921.

Acetylene is not, by definition, a liquid petroleum fuel, a liquefied petroleum gas, a liquefied natural gas or a compressed natural gas.

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What records are required to be kept in relation to whether or not a fuel or gas is subject to any duty under the Customs Tariff Act 1995, or the Excise Tariff Act 1921?

Under the Clean Energy Act 2011 and the National Greenhouse and Energy Reporting Act 2007, all those who trigger a threshold must keep appropriate records about their activities. This record of activities allows the submission of accurate emission reports, and enables the Clean Energy Regulator to ascertain whether you have complied with you obligations to submit an emissions report. The records must be retained for five years after the eligible financial year.

For questions relating to record keeping requirements under the Customs Tariff Act 1995, or the Excise Tariff Act 1921, you need to contact the Australian Customs and Border Protection Service or the Australian Taxation Office.

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