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.
General questions
Coal-fired generation assistance package
Jobs and Competitiveness Program
Gaseous Fuels
Liquid Fuel Opt-In Scheme
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General questions
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.
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.
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.
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.
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.
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.
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.
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:
- liquid petroleum fuel; or
- liquefied petroleum gas; or
- liquefied natural gas; or
- 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.
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:
- liquid petroleum fuel; or
- liquefied petroleum gas; or
- liquefied natural gas; or
- 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.
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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Coal-fired generation Assistance Package
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.
When were applications due?
Applications for Energy Security Fund Coal-fired Generation free Carbon Units assistance closed at 5:00pm on 2 May 2012.
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.
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?
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.
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.
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.
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.
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?
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.
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
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.
Am I eligible for assistance?
Qualifying activities are listed and defined in the Clean Energy Regulations.
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.
Are there audit guidelines for the Jobs and Competitiveness Program application?
Yes, see the audit report guidelines for 2012–13 Jobs and Competitiveness Program applications that provide guidance for you and your auditor to prepare the audit report that is required as part of your application.
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 adjustment applies (as described in clause 912 of 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 (note that the sub-threshold adjustment is made retrospectively, in the following financial year's application).
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. Units will be issued shortly after the assessment is complete.
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.
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).
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.
What activities are included under the Jobs and Competitiveness Program?
See emissions-intensive trade-exposed activities.
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Gaseous Fuels
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.
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.
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.
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.
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.
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.
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:
- 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
- the natural gas is withdrawn from a natural gas supply pipeline in Australia for the purposes of the use, and
- 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.
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.
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.
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.
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.
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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Liquid Fuel Opt-In Scheme
What is the Liquid Fuel Opt-In Scheme and what is its purpose?
As part of the Government's Clean Energy Future Package, 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.
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 |
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).
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.
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.
How does an applicant pass the eligibility test?
See the eligibility test section of the Liquid Fuel Opt-in Scheme guideline for details.
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.
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 |
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.
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.
What is the relationship of the Opt-in Scheme to fuel tax credits?
As part of the Government's Clean Energy Future package, 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.
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.
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.
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.
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