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Information for exemption certificate audits and auditors

09 March 2023


Auditors are expected to provide an audit report under the Renewable Energy Target:

  • to support application forms lodged by emissions-intensive trade-exposed (EITE) activity entities annually
  • to support an application where the Clean Energy Regulator (CER) requires the applicant to obtain an audit report
  • as part of our broader compliance monitoring strategy.

Audit reports underpin the effectiveness and integrity of the certifiable amounts issued by CER. See Applying for an exemption certificate for general application information.

Applicants submit an audit report with their annual exemption certificate application if their site’s certifiable amount is expected to be 15,000 megawatt hours (MWh) or more for the certifiable amount period and:

  • it is the first application for the site, or
  • it has been 5 years since you lodged an audit report for the site.

What is a certifiable amount?

A certifiable amount is a letter that details the amount of electricity consumed as a relevant acquisition of electricity in MWh for the EITE activity at the site to produce the relevant product.

An exemption certificate is a letter that confirms eligibility under the legislation and the use amount formula that determines the certifiable amount.

The certifiable amount and exemption certificate allows a nominated liable entity to decrease their relevant acquisitions of electricity.

Who can complete an audit report?

An audit report must be completed by a Category 2 registered greenhouse and energy auditor who has no conflict of interest. The audit must be conducted in accordance with the relevant requirements for assurance engagements under the National Greenhouse and Energy Reporting (Audit) Determination 2009. Ensure that you engage with your auditor early, so that the audit report is submitted with your application. CER recommends that you engage your auditor at least 4 months before submitting your application.

What should the audit report approve?

The audit report must approve various aspects of an applicant’s exemption certificate application.

Reasonable assurance conclusion

Auditors must set out a reasonable assurance conclusion under 22UH(3) of the Renewable Energy (Electricity) Regulations 2001 (the Regulations) as to whether:

  • the EITE activities set out in the application comply, in all material respects, with each of the requirements in the description of the EITE activity set out in Schedule 6 of the Regulations
  • the application presents fairly, in all material respects, the use amount formula (refer to 22O(1)(i) of the Regulations)
  • the use amount formula is reasonable, and in all material respects, is not likely to result in including an amount of electricity that is not eligible for the certifiable amount. This means that only relevant acquisitions of electricity are eligible to be calculated for the certifiable amount
  • if an audit report is required for an ‘Apply to amend your exemption certificate’ application form that the amendments and reasons for the amendments mentioned in 22S(3)(e) or 22T(2)(d) of the Regulations are reasonable.

Determine if metering data is sufficient

Auditors, under regulation 22O of the Regulations, must determine:

  • whether the applicant considers that metering data is sufficient and appropriate to identify the use amount for a liable entity to which the application relates, and why or why not. Consider the validity of the use amount formula under regulation 22ZHC of the Regulations
  • if the applicant considers that metering data is not sufficient or not appropriate to identify the certifiable amount, whether other elements are appropriate, and why or why not. If using other elements you must have regard for CER’s object to choose the most accurate way of identifying a certifiable amount under regulation 22ZHC(5) of the Regulations.

See documentasset:Basis of Preparation Report template for guidance on how the applicants should be communicating this information.

CER exemption certificate audit report expectations

CER expects all exemption certificate auditors to:

  • understand what a relevant acquisition of electricity is
  • understand what applicants do annually for an exemption certificate and certifiable amount
  • understand relevant electricity market rules
  • understand and use current legislative terminology for the electricity use method
  • focus on applicant accountability and internal approval processes
  • focus on applicant misstatements, knowledge and understanding
  • focus on whether the applicant has a Basis of Preparation Report and whether it clearly articulates the EITE activity or activities that occur at the site
  • focus on informing CER on what you did as part of the audit and whether you think there will be issues in the future.

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