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Industry assistance

19 January 2018
RET

Contents

A 100 per cent exemption from Renewable Energy Target liability is applied to electricity used in carrying out eligible emissions-intensive trade-exposed (EITE) activities.

Companies that conduct an eligible EITE activity may be issued with an exemption certificate by the Clean Energy Regulator. The exemption certificate may then be traded with their liable entity company to obtain a reduction in their electricity costs for the year.

We encourage transparency between applicants and their liable entities. Please discuss the provision of exemption certificate information with your liable entity.

A list of companies issued with exemption certificates and the total exemption by EITE activity are published on our website each year.

Applying for exemption certificates

For 2018 there are two separate methods that can be used when applying for exemption certificates:

Transition period

By 2020, all EITE exemptions are to be determined using the electricity use method. Applicants can transition to the new method in 2018, 2019 or 2020.

201820192020

Choose either:

  • Electricity use method
  • Production calculation method

2018 electricity consumption at site for EITE activities > 2000 GWh:

  • Electricity use method

Otherwise choose either:

  • Electricity use method
  • Production calculation method

Electricity use method only

Deciding what method to use

During the transition period, most applicants can choose which method to use. If the amount of electricity consumed at the site for EITE activities in 2018 is more than 2000 GWh, the site must use the electricity use method from 2019.

Once you have you have applied for an exemption certificate using the electricity use method, and it is after the application due date, you cannot apply under the production calculation method for that year or future years.

Where the production processes that constitute a single EITE activity occur across two or more different sites (constituting an activity group), applications for all the sites must use the same method in a particular year.

Electricity use method

The 2015 legislation reforms which increased the rate of exemption to 100 per cent, still allows for over and under exemption of electricity at a site. The new electricity use method decreases over or under exemption.

The Department of the Environment and Energy consulted with EITE businesses and liable entities in the development of new regulations to address this issue.

The amended regulations that include the electricity use method came into effect on 14 December 2017. The amendments include the electricity use method that is used to calculate exemption amounts, transitional arrangements, and technical amendments to support the ongoing efficient operation of the Renewable Energy Target.

Under this method, the amount of exemption will be calculated based on metered electricity that is used to undertake the EITE activity in the year. Information on how to apply this method is in the electricity use method application guidelines. There is a separate application form for this method.

Each exemption certificate under the electricity use method describes how the exemption amount, in megawatt hours (MWh), will be determined by the Clean Energy Regulator. We will provide the exemption amount after the exemption year. The exemption is for all EITE activities at the site.

Production calculation method

The production calculation method has been used in previous years and will not be used from 2020.

Under the production calculation method the amount of exemption is determined by a formula taking into account the amount of relevant product produced in earlier years and the product’s electricity baseline factor.

Information on how to apply this method is in the production calculation method application guidelines. There is a separate application form for this method.

Each exemption certificate under the production calculation method includes the amount of exemption, in MWh, for the year. The exemption relates to one EITE activity only at the site.

Claiming exemption to reduce liability

Liable entities that supply electricity to EITE companies can use exemption certificates to reduce their liable electricity for the year under the Renewable Energy Target. If a liable entity’s exemption amount is greater than their relevant acquisitions for a particular year, the surplus can be carried forward and used to cover future year’s liability.

The transfer of an exemption certificate is a matter for negotiation between the EITE company and their liable entity. We have no role in this transaction.

The need for independent advice

We recommend that exemption certificate applicants read the underpinning Renewable Energy Target legislation, and if necessary, seek their own legal advice prior to making an application.

For further information contact the Industry Assistance Schemes team by emailing CER-IndustryAssistanceSchemes@cleanenergyregulator.gov.au or calling 1300 553 542.

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