Step 5: Surrender enough units to satisfy liability in ANREU

Carbon pricing mechanism repeal

The Clean Energy Act 2011 has been repealed. This abolishes the carbon pricing mechanism from 1 July 2014. Liable entities must still meet their carbon price obligations for the 2013-14 financial year.

Content on the Clean Energy Regulator website will be progressively updated to reflect these changes. More information can be found on the carbon pricing mechanism repeal page.

Five steps to managing carbon price liability 5 steps to participate in the CPM Step 1: Confirm operational control or transfer liability Step 2: Apply for an ANREU account Step 3: Register under the NGER Act Step 4: Report emissions under the NGER Scheme Step 5: Surrender enough units to satisfy any liability in ANREU

How is liability met?

For the 2013-14 compliance year, liable entities need to meet their reporting obligations and acquit their carbon price liability under the Clean Energy Act 2011 and the National Greenhouse and Energy Reporting Act 2008

Liable entities that met a threshold had to report an interim emissions number and surrender an equivalent amount of units to meet this number by 16 June 2014.  This represented approximately 75% of their carbon liability for the full year. 

All liable entities must report their final emissions number for 2013-14 by 31 October 2014.

To meet the final carbon liability for 2013-14, all liable entites must surrender sufficient eligible emissions units to match their emissions number, inclusive of units already surrendered by 2 February 2015.

Entities that don’t surrender sufficient units by 2 February 2015 will incur a unit shortfall charge.

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What are the deadlines?

To meet your liability you must meet the following deadlines:

Statutory deadline 2013-14 compliance year deadlines
Details
15 June 16 June 2014
  • Report interim emissions numbers, if you have any.
  • Surrender eligible emissions units equal to the total of the interim emissions numbers to avoid a unit shortfall.
15 June + five business days 23 June 2014 A unit shortfall charge is payable on the sixth business day after 15 June if sufficient units are not surrendered to meet a provisional liability.
31 October 31 October 2014 Report final emissions numbers
1 February 2 February 2015 Surrender units to cover emissions number to avoid a unit shortfall.
1 February + five business days 9 February 2015 A unit shortfall charge is due and payable on the sixth business day after 1 February if sufficient units are not surrendered to meet a final liability.

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What units are eligible?

Only carbon units and eligible Australian carbon credit units (ACCUs) can be surrendered to meet a liability for 2013-14. There are specific limitations on the number of eligible ACCUs that can be used to acquit your liability.

International emissions units may not be surrendered to meet a 2013-14 liability.

Refer to the full description of eligible emissions units and restrictions around their use.

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What limitations are there on using Australian carbon credit units?

There are limits on the number of eligible Australian carbon credit units (ACCUs) that can be used to acquit your liability for the 2013-14 year.

For the final surrender period (deadline 2 February 2015), the limit on ACCUs is calculated as five per cent of your final emissions number minus any ACCUs surrendered in the provisional surrender period (before 16 June 2014). If you did not surrender any ACCUs in the provisional surrender period, the limit is five per cent of your final emissions number.

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 provisional or final liabilities.

Following the repeal of the Clean Energy Act 2011, ACCUs surrendered above the limits in the final surrender period for 2013-14 will be restored back into the relevant ANREU account, and taken never to have been surrendered or cancelled. The Clean Energy Regulator cannot refund any excess ACCUs.

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How are units acquired?

Liable entities must have an Australian National Registry of Emissions Units (ANREU) account to be able to surrender units, otherwise a shortfall charge will be payable if insufficient units are surrendered against a carbon liability.

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.

For the 2013-14 year, eligible emissions units may be acquired by:

Note that while the Jobs and Competitiveness Program has been discontinued  from 1 July 2014, free carbon units will continue to be issued beyond that date in relation to the 2013-14 year, including as part of the ‘true-up’ process established by the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (Repeal Act).  These free units can still be surrendered for 2013-14 carbon price acquittal before 2 February 2015.

Further information is available on Purchasing eligible emissions units in the secondary market and Using Australian Carbon Credit Units to acquit your liability.

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Purchasing carbon units from the Clean Energy Regulator

You can meet part or all of your liability by purchasing carbon units from the Clean Energy Regulator at a fixed price through your ANREU account. Carbon units purchased from the Clean Energy Regulator 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 numbers (during the provisional surrender period) or your emissions number (during the final surrender period) for the relevant year less any eligible units previously surrendered in relation to that year before the surrender deadline.

Carbon units are available for purchase from the Clean Energy Regulator in the lead up to the final surrender deadline. Carbon units can be purchased after your emissions number has been published on the Liable Entity Public Information Database (LEPID) and displayed in your ANREU account (in early November) through to 2 February 2015.

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What do units cost?

The price for a carbon unit purchased from the Clean Energy Regulator for the 2013-14 financial year is $24.15.

The price per unit for the 2012-13 year was $23.00.

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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 your 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 through an industry assistance scheme can also be surrendered against your liability. All units are surrendered from your ANREU account.

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Notices

The Clean Energy Regulator will email the following notices to the primary ANREU account representative as part of the process of liability acquittal:

  • a payment advice will be emailed within one hour following a 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 receipt of payment will be emailed within one business day of a payment for carbon units being verified in the Clean Energy Regulator's bank account, and
  • a notice of assessment will be emailed within two weeks after the conclusion of the final surrender deadline on 2 February 2015.

The notice of assessment will show 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.

The notice of assessment will contain:

  • interim (if any) and final emissions numbers
  • all unit transactions and unit payments
  • any surplus units which will be refunded or restored 
  • if relevant, any unit shortfall charges

Your ANREU account will display your current unit position statement for the provisional surrender period. This statement will include your interim emissions number, the number of units surrendered, the number of units pending surrender and the projected net unit position.

For the final surrender period the emissions number and the number of units that are surrendered by each entity are published on the LEPID.

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