How is liability met?
To meet your liability under the Clean Energy Act 2011 you can acquire and surrender enough eligible emissions units to meet your liability, or pay a unit shortfall charge.
During the fixed price period (2012–15) you must acquit your full liability at 1 February following the financial year in which the emissions are accrued.
You may also need to acquit a progressive liability equal to an interim emissions number on 15 June during the financial year in which the emissions are accrued.
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What are the deadlines?
During the fixed price period, to meet your liability you must meet the following deadlines:
|
Statutory deadline |
2012-13 eligible financial year deadlines |
Details |
15 June
(fixed price years only) |
17 June 2013 |
- Report interim emission numbers, if you have any.
- Surrender eligible emissions units equal to the total of interim emissions numbers to avoid a unit shortfall.
|
15 June + five business days
(fixed price years only) |
24 June 2013 |
If you have not surrendered enough units to meet your progressive liability, a unit shortfall charge is due and payable five days after 15 June. |
| 31 October |
31 October |
Report final emissions numbers |
| 1 February |
3 February 2014 |
Surrender units to cover emissions number to avoid a unit shortfall. |
| 1 February + five business days |
10 February 2014 |
If you have not surrendered enough units to meet your final liability, a unit shortfall charge is due and payable five days after 15 June. |
During the flexible price period from 1 July 2015, the final surrender date of 1 February in the year following the relevant financial year is the single deadline for meeting 100 per cent of your liability.
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What units are eligible?
In the fixed charge period (2012/13 - 2014/15) only carbon units and eligible Australian Carbon Credit Units (ACCUs) can be surrendered to meet a liability. There are specific limitations on the number of eligible ACCUs that can be surrendered.
In the flexible charge period (from 2015/16) eligible international emissions units may also be used to meet a liability.
Refer to the full description of eligible emissions units and restrictions around their use.
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How are units acquired?
If you intend to acquit your liability by acquiring and surrendering eligible emissions units you must have an Australian National Registry of Emissions Units (ANREU) account.
ANREU account holders who are not liable entities have the option to hold units for trading and transfer but are not expected to surrender units if they have no liability.
In the fixed charge period eligible emissions units can be acquired by:
- receiving free carbon units through industry assistance schemes that allocate them to certain industry groups
- purchasing carbon units in ANREU at a fixed price
- creation of Australian Carbon Credit Units through the Carbon Farming Initiative and
- purchasing from other parties that hold eligible units in the secondary market.
In the flexible price period, carbon units can be purchased from the Clean Energy Regulator through auctions which establish the price of the units.
Eligible international units can be acquired by participating in approved international schemes or can be purchased through secondary markets trading in eligible international units.
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Purchasing carbon units from the Clean Energy Regulator
You can meet part or all of your liability in a fixed price year by purchasing carbon units at a fixed charge in ANREU. Carbon units that are purchased are automatically surrendered and cannot be transferred to another party.
The number of units you can purchase is limited to the total of your interim emissions number (or emissions number) less any units previously surrendered before the surrender deadline.
Carbon units are available for purchase from the Clean Energy Regulator in the lead up to the two surrender deadlines in each fixed price year:
- Progressive surrender deadline: units will be available for purchase from 1 April until 15 June.
- Final surrender deadline: units will be available following the publishing of the emissions number through to 1 February.
Purchasing carbon units involves two steps, both of which must be undertaken prior to the surrender deadlines to avoid a unit shortfall charge.
- Request to purchase carbon units
Requests to purchase carbon units from the Clean Energy Regulator must be made through ANREU. A liable entity can request to purchase units for the progressive surrender deadline between 1 April and 15 June (after reporting their IEN if any) and, for its final surrender obligation, up to 1 February in the following year.
- Pay for units
Once a request for purchase has been received, we will send a payment advice to the liable entity with payment details for the units. Payment must be made by electronic funds transfer (EFT) into the nominated bank account.
We must receive payments for purchased carbon units in the nominated bank account prior to the surrender deadlines to avoid a unit shortfall.
For the 2012-13 progressive surrender deadline, if payment is not received by 11.59pm on 17 June 2013 then a unit shortfall will apply if enough other units have not been surrendered to meet your liability.
Payments for carbon units are to be made to the nominated bank account.
When we receive a payment, the purchased carbon units will be issued into the relevant ANREU account and automatically surrendered. When money is received close to but before a surrender deadline, the issuance of and automatic surrender of the purchased units may occur after the surrender deadline. This will not constitute a unit shortfall provided that the total liability has been met through this transaction or through this transaction plus any earlier surrender transactions (ie provided that the units in this transaction plus any other eligible units surrendered earlier equal or exceed the total liability).
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What do units cost?
Carbon units that are purchased against the 2012–13 financial year cost $23 each.
The price rises to $24.15 each for 2013–14, and $25.40 each for 2014–15.
From 1 July 2015 the price will be flexible (set by the market).
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How long are units valid for?
During the fixed price period, carbon units purchased from the Clean Energy Regulator are automatically surrendered.
Free units issued by under an industry assistance program are only valid for the vintage year that they were issued. After the final surrender deadline for a particular vintage year, all remaining free carbon units, i.e. those not sold back to the Clean Energy Regulator or surrendered by this date, will be cancelled (see s. 115 of the Clean Energy Act 2011).
During the flexible price period, carbon units will continue to be valid in future years.
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How are units surrendered?
If you intend to acquit your liability by acquiring and surrendering eligible emissions units you must have an Australian National Registry of Emissions Units (ANREU) account.
Upon receipt of payment, carbon units purchased from the Clean Energy Regulator are issued into a liable entity's ANREU account and automatically surrendered. To surrender other units, log into your ANREU account and select the units you wish to surrender. Follow the instructions for surrender in the ANREU user guide.
ACCUs and free carbon units obtained under the Jobs and Competitiveness Program or the Coal-Fired Generation Assistance program can also be surrendered against a liability. Approved international units can only be surrendered in the flexible price period. All such units are surrendered from your ANREU account.
If you surrender too many units during the progressive surrender period they will be carried over for the final surrender period and will be counted against your total liability. They will not be refunded after the progressive surrender period. If you surrender ACCUs over the limit, these units will be carried over to the next surrender period, including into the next year.
Units cannot be reissued once they have been surrendered.
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Notices
You will receive the following notices through ANREU:
- A statement of account is similar to a bank statement and will be sent to you following any unit or financial transactions in relation to meeting a liability for a surrender period.
- A payment advice will be sent to you following any request to purchase carbon units. The payment advice is similar to an invoice and includes the details of the transaction, as well as payment information.
- A notice of assessment will be issued to you at the conclusion of the surrender deadlines (progressive—concluding 15 June and final—concluding 1 February). The assessment for the period will include one of three unit positions:
- successful acquittal: where the number of units surrendered equals the carbon liability
- surplus position: where more eligible units are surrendered than the carbon liability.
- shortfall: where insufficient units are surrendered to acquit a carbon liability.
The notice contains:
- interim (if any) and final emissions numbers
- all unit transactions
- any surplus units which will be carried forward to the next period or refunded (for final period only)
- if relevant, any shortfall charges or late payment penalties
The number of units (including fixed price carbon units) that are surrendered by each entity will be published on the Liable Entities Public Information Database.
You can also access your ANREU account at any time to see your current unit position statement. This statement will include the current IEN or EN, the units surrendered and any units outstanding to meet your liability.
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