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Baseline variation

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12 September 2017

NGER​​​

Baseline variation for an improvement in emissions intensity  

Some business growth is incremental and will not meet the definition of ‘significant expansion’ (for example, where businesses increase production within existing plant capacity or expand capacity by less than 20 per cent). In many cases, this growth will be accompanied by falling emissions intensity of production, delivering both economic and environmental benefits. 

Baselines may be varied to accommodate such incremental growth. A responsible emitter can apply to have their baseline temporarily increased in any year where expanding production is accompanied by an emissions intensity improvement (that is, the emissions intensity of production has decreased). 

The facility will undergo an emissions intensity test, where current emissions intensity is compared with previous emissions intensity to ensure there has been an improvement. 

An Documentasset: Application for a variation of baseline determination for reduction in emissions intensity must be accompanied by an independent audit report providing assurance over the emissions intensity test and the information provided in the application.

If successful, the facility’s baseline will be increased for one year to be equal to the reported emissions in that year. After one year, the facility will revert to its original baseline. However, the responsible emitter can submit an unlimited number of applications for this adjustment, creating an incentive for facilities to continually lower the emissions intensity of their production. 

See more information in the Documentasset: baseline variation for reduced emissions intensity application guidance

Baseline variations made by the Clean Energy Regulator

The Clean Energy Regulator may vary an existing baseline to address: 

  • a reporting error in historical National Greenhouse and Energy Reporting data, on which the facility’s reported baseline determination was made 
  • an error made by the Clean Energy Regulator in making or calculating a baseline
  • a change in circumstances to reflect activities that no longer occur at a facility, or where emissions were previously reported as occurring at another facility are now reported as part of this facility, and
  • changes to emissions reporting due to updates to the global warming potentials based on new scientific information.

Before a baseline is varied or remade, the Clean Energy Regulator will notify and seek comment from the responsible emitter. 

Decisions made by the Clean Energy Regulator to vary or remake a baseline can be reviewed by the Administrative Appeals Tribunal.

Variations due to a change in circumstances

The Clean Energy Regulator is required to make a reported baseline determination for the facility based on its historical data. In certain circumstances, the Clean Energy Regulator may make adjustments to reflect the fact that emissions included in the historical data are generated by activities that no longer occur at the facility. The Clean Energy Regulator can also increase a reported baseline for one facility, where emissions that were previously reported as occurring at another facility are now reported as part of the first facility.

Variations due to updates to global warming potentials (GWP)

From 1 July 2016 the National Greenhouse and Energy Reporting regulations will incorporate new values for global warming potentials of greenhouse gases to reflect the findings of the Fourth Assessment Report. In comparing historical reporting of emissions, adjustments will be made to the carbon dioxide equivalence of certain gases where required, for example, in establishing a reported emissions baseline or using historical emissions data in forecasting.

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