The National Greenhouse and Energy Reporting Act 2007
(Cth) establishes a national system requiring certain companies to
report on the levels of their greenhouse gas emissions and energy
consumption and production for each reporting year (1 July to 30
June). Companies that meet any one of the following thresholds are
required to register with the Clean Energy Regulator and to report
under the National Greenhouse and Energy Reporting Scheme
the entity emits 50 kilotonnes or more of greenhouse gases or
produces or uses 200 terajoules or more of energy each year;
the entity has operational control of facilities that emit 25
kilotonnes or more of greenhouse gases or use or produce 100
terajoules or more of energy per year.
Clean Energy Legislation
The Federal Government has recently implemented a carbon pricing
mechanism (CPM) to help to reduce carbon pollution
in Australia and to move to a clean energy future. The CPM applies
to entities which:
operate facilities that emit more than 25,000 tonnes of CO2 or
equivalent gases (CO2-e) per year; or
supply or use large amounts of natural gas
Such entities must satisfy their liabilities under the CPM by 15
June and 1 February of each reporting year by:
purchasing 'eligible emission units' from the Clean
Energy Regulator, at the carbon price (or for free for entities
that participate in certain prescribed 'emission intensive
trade exposed' programs);
surrendering those eligible emission units, at a rate of 1 unit
for each tonne of CO2-e emitted (or deemed to have been emitted) by
the relevant entity for the relevant reporting period;2
paying a unit shortfall charge – at a rate of 130% of the
carbon price during the 'fixed price period' (1 July 2012
– 30 June 2015) and 200% of the benchmark price during the
'flexible price period' (1 July 2015 onwards) – in
respect of that part of a relevant entity's liability under the
CPM that is not satisfied in full by the relevant dates.
Currently, the carbon price is prescribed at $23.00 for each
tonne of CO2-e emissions emitted by a relevant entity. The carbon
price will be indexed at the commencement of the next two reporting
years at a rate of 2.5% per annum plus an expected inflation rate
of 2.5% per annum.
The Climate Change Authority is responsible for reviewing the
operation of the carbon price, tracking the country's progress
towards pollution reduction targets and recommending other climate
change mitigation initiatives.
From 1 July 2015, emissions units will be auctioned by the Clean
Energy Regulator for purchase on the market. As such, the
'benchmark average auction charge' will be determined by
market forces. Depending on the type of 'eligible emission
unit' held, a holder may be able to trade in its emission units
or 'bank' them for future use.
The NGER Scheme and CPM are both administered by the Clean
2 To surrender emissions units, an entity must
have an account with the Australian National Registry of Emissions
The content of this article is intended to provide a
general guide to the subject matter. Specialist advice should be
sought about your specific circumstances.
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