Pay unit shortfall charge if required

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The Clean Energy Act 2011 has been repealed.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.

If you do not surrender enough eligible emissions units to satisfy your liability by 16 June 2014 (if you have an interim emissions number) or 2 February 2015, you will incur a unit shortfall charge.

The unit shortfall charge is calculated as the difference between the liability and the number of units surrendered by the deadline, which is then multiplied by 130 per cent of the applicable fixed charge. For 2013-14 financial year the unit shortfall charge is $31.40 (rounded) per unit in shortfall.

A unit shortfall charge is payable on the sixth business day after the surrender deadlines.

Liable entities that fail to pay the unit shortfall charge by the due date will be subject to a late payment penalty equal to 20 per cent per year of the value of the outstanding shortfall charge.

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How will I know if I have incurred a shortfall charge?

If you have incurred a shortfall charge you will receive a notice of assessment detailing the final unit position, including any applicable charges, as soon as practicable after the surrender deadline.

You can log in to your ANREU account at any point to review your current liability position in your unit position statement. This statement will indicate if units remain outstanding against the relevant interim emissions number or emissions number.

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What if I surrender too many units?

If you surrendered more units than your liability for the provisional surrender deadline, the surplus is carried forward as a credit for your final surrender obligations.

If you surrendered more units than your liability for the final surrender deadline, and you only surrendered carbon units, your surplus will be refunded as soon as practicable after the deadline. 

In order for the Clean Energy Regulator to provide a refund to entities assessed as being in surplus, a bank account details form must be completed and emailed to the Regulator.

Effect of surplus surrenders of eligible emissions units during the provisional surrender period for fixed price years

If you surrender eligible ACCUs in the provisional surrender period for a fixed price year in excess of the eligible ACCU surrender limit for that period, the number of excess eligible ACCUs will be carried over to the final surrender period for that year and will be taken to have been surrendered for that period.

More information about the limit of ACCUs you can surrender for the fixed and flexible price periods under the carbon pricing mechanism is outlined in the Using Australian Carbon Credit Units to acquit your liability fact sheet.

Any eligible ACCUs surrendered by you in the provisional surrender period will be counted against your provisional surrender liability for that year if they are within the eligible ACCU surrender limit for that period.

If during the provisional surrender period you surrender eligible emissions units (whether they are carbon units only or a combination of carbon units and eligible ACCUs within the eligible ACCU surrender limit) in excess of the total of your interim emissions numbers (IEN) for that year, the number of the surplus units will become a factor in the formula for calculating your final surrender liability for that year. Surplus carbon units will not be refunded after the provisional surrender period but will be refunded after the final surrender period.

Effect of surplus surrenders of eligible emissions units during the final surrender period for fixed price years

If you surrender eligible ACCUs in the final surrender period for a fixed price year in excess of the eligible ACCU surrender limit for that period, the number of excess eligible ACCUs will be carried over to the next corresponding surrender period and will be taken to have been surrendered for that period.

Any eligible ACCUs surrendered by you in the final surrender period, that are within the eligible ACCU surrender limit for that period, will be counted against your final surrender liability for that year.

The number of eligible emissions units determined to be in surplus at the final surrender stage for a fixed price year will be eligible for a refund. However, the calculation of that number will only take into account carbon units surrendered during that year, and will not take into account any eligible ACCUs surrendered during that year even though they were within the relevant eligible ACCU surrender limits for that year. In other words, if you used ACCUs to acquit your provisional and/or final surrender liability for a fixed charge year and this contributed to a surplus surrender of units against your final surrender liability for that year, that surplus will be reduced by the number of ACCUs you surrendered during that year in order to calculate the number of units which can be refunded. As this method for calculating the number of units eligible for a refund can result in no value being given and no carry forward being available for some eligible ACCUs surrendered during that year, you should exercise caution when you are using eligible ACCUs to acquit any part of your surrender liability for a fixed charge year where that results in a surplus surrender of units against your final surrender liability.

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Estimation error unit shortfall

If you reported an IEN to the Clean Energy Regulator during the provisional surrender period and used a reasonable estimate under section 126(4) of the Clean Energy Act 2011, you may incur an estimation error unit shortfall charge if you have underestimated your IEN.

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