All models of product that fall under the Greenhouse and
Energy Minimum Standards Act must be registered to make sure that
they comply with the relevant GEMS determinations.
The drive for energy efficiency is nothing new and there has
been work over many years to improve our performance in this area
for various reasons including energy security, economic efficiency
and greenhouse gas reduction.
Last week there was a large leap forward when the Federal
Parliament passed the Greenhouse and Energy Minimum Standards Act
2012. The Act's purpose is to promote the development and
adoption of products to reduce energy use and greenhouse gas
production by applying Greenhouse and Energy Minimum Standards
(GEMS) in association with the supply and commercial use of
products that use energy, or affect the energy used by another
A wide range of products will be affected, as the changes expand
the current scheme beyond products such as industrial and domestic
heating and refrigeration, and ordinary household whitegoods and
electronics, to include building supplies such as piping, glass,
and insulation, and more energy sources.
What does this Act do that the Energy Efficiency Program
doesn't already do?
In 1992 the Energy Efficiency Program (E3) was established to
co-ordinate energy efficiency activities. The E3 scheme operates on
a national basis through co-operative action by the Territory and
State governments, and with New Zealand. The challenges include
relatively high compliance costs and complexity because of the
The Act is intended to address these inconsistencies. It also
seeks to expand the program to drive further efficiency by
including more energy sources such diesel and gas, and also extend
to products that impact on energy use such as insulation and glass.
The program will continue to operate on a trans-Tasman basis though
it is noted that there are some inconsistencies between the New
Zealand and Australian schemes.
What are GEMS determinations and how do they affect
GEMS determinations set standards for particular products, such
as minimum standards of performance in relation to energy use or
emissions intensity or other criteria that may be identified in the
Generally speaking an appliance or piece of equipment covered by
the legislation can only be supplied or offered for supply, or used
for a commercial purpose, if:
the model of the product is registered under this Act;
the product complies with the GEMS determination; and
supply, offer or use of the product complies with the GEMS
Generally, all models of product that fall under this
legislative scheme will be registered to make sure that they comply
with the relevant determinations. A senior officer of the
Department of Climate Change and Energy Efficiency will be
responsible for the registration system and more broadly the
administration of this Act and will be known as the GEMS
Inspectors appointed under the Act will monitor compliance with
the rules about supply and the commercial use of products.
What if you don't comply with the Act?
Failure to comply with this Act may result in prosecution for an
offence or exposure to a liability for a civil penalty. The details
of offences may be published. Decisions under this Act may be
appealed internally and then to the Administrative Appeals
Tribunal. The Act includes protections against the use of
commercially sensitive information.
Important points to note
The Act may operate concurrently with State or Territory
legislation and where the State or Territory standards are more
stringent than those specified in the GEMS determination, the more
stringent standards will apply.
Products that are deemed to have a higher impact on energy use
or greenhouse gas production attract higher penalty levels where
there are contraventions of the Act.
The Act takes a very broad view of supply and includes sale,
exchange, gift, lease, loan, hire or hire-purchase, and it is
irrelevant whether the supply is for consideration or for wholesale
or retail supply.
The Act is intended to commence operation on 1 October 2012, or
when it receives Royal Assent.
The expanded program will ensure that Australian governments can
continue to encourage the development of energy efficient products
that meet the needs of Australian households and businesses.
Whether or not the stated intention of reducing the complexity of
compliance for Australian business will be achieved is yet to be
Clayton Utz communications are intended to provide
commentary and general information. They should not be relied upon
as legal advice. Formal legal advice should be sought in particular
transactions or on matters of interest arising from this bulletin.
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