The Australian Senate yesterday rejected the bills repealing the
Clean Energy Act 2011, the centrepiece of the Australian carbon
price scheme that commenced on 1 July 2012.
The proposed repeal legislation included several "price
exploitation provisions", inserting sections in the
Competition and Consumer Act 2010 that prohibit corporations from
engaging in "price exploitation in relation to the carbon tax
repeal" during the period 1 July 2014 to 30 June 2015, in
relation to the supply of natural gas, electricity and other
specified goods ("regulated supplies"). These price
exploitation provisions were to commence on the day after royal
assent is given to the repeal bills, and would have related to
conduct engaged in from and after that date in relation to the
period from 1 July 2014.
On Wednesday the Palmer United Party proposed additional
consumer protections, including amendments making it compulsory for
suppliers of regulated supplies (such as electricity and natural
gas) to report to the Australian Competition and Consumer
Commission on how much of their savings from the carbon price
repeal had been passed through.
On Thursday morning the Palmer United Party proposed yet further
amendments, including provisions requiring suppliers of regulated
supplies to pay to the Government 250% of any savings from the
carbon price repeal that were not passed through to customers. The
Senate declined leave to the Party to introduce these amendments
during the debate, and the amendments were probably
The Palmer United Party then withdrew its earlier amendments
without putting them to the vote, and the Senate then voted to
reject the repeal bills completely.
It is likely that the Abbott Government will continue
negotiations with the cross-bench members to come up with amended
repeal bills to be re-introduced into the House of Representatives
next week. For now, the fixed carbon price of $25.40 until 30 June
2015 (and a floating price trading scheme after that) remains in
Two other substantive reforms to Australia's carbon
emissions and renewable energy schemes are also still being
The legislation to implement the Australian Government's
Direct Action policy, under which an Emissions Reduction Fund will
be established to buy up to A$2.55 billion in carbon credits from
emissions abatement activity under a revised Carbon Farming
Initiative, is expected to be considered by the Parliament later in
The review into the Renewable Energy Target, which was
originally intended to mandate that 20% of on-grid electricity be
sourced from renewable sources, is still continuing. Potential
outcomes from that review include closure of the whole scheme,
closure of the small technology (rooftop solar PV) section of the
scheme, or revision of the scheme to a lower target, perhaps
prescribed by percentage of power acquisitions rather than the
present fixed 41,000 GWh per annum target.
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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