Step 1: Confirm operational control or transfer liability

Your organisation will be a liable entity for covered emissions if it is a direct emitter.

For more information, see who is liable?

Default position for direct emitters

The default position for liability under the Clean Energy Act 2011 rests with the legal 'person' that has operational control over a facility.

This differs from the default position for total emissions and energy reporting obligations under the National Greenhouse and Energy Reporting Act 2007 (NGER Act), which requires a controlling corporation to report on emissions and energy production and use for its entire corporate group.

In some cases, corporations that have previously registered as a controlling corporation under the NGER Act will also be a liable entity under the carbon pricing mechanism (that is, where the controlling corporation itself has operational control over a facility). If this is the case, the company does not need to register again.

However, if the controlling corporation is registered, and one of its subsidiaries has operational control over a facility that gives rise to a carbon liability, then that subsidiary will need to register in its own right. The controlling corporation will also remain registered, as it will have separate obligations, as a controlling corporation, under the NGER Act.

For more on how to register, see Step 2: Apply for an ANREU account.

Transfer of liability—direct emitters

There are mechanisms that allow entities with operational control over a facility to transfer liability to another person.

These mechanisms are designed to allow entities to manage their liability, and ensure that the most appropriate person assumes liability for emissions.

These mechanisms are:

  • corporate group liability transfer certificates (LTCs)—these certificates transfer liability for a facility from the person with operational control to another person within the same corporate group
  • financial control liability transfer certificates (LTCs)—these certificates transfer liability for a facility from the person with operational control to the person with financial control of the facility, provided the two people are members of different corporate groups, and
  • declared designated joint ventures—a declaration of a designated joint venture transfers liability for a facility from the person with operational control of the facility to the participants in the joint venture (whether or not the person with operational control is also a participant in the joint venture).

For more information, see liability transfer certificates and joint ventures.

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

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