On 9 December 2009, the Federal Government released revised
draft regulations for the Carbon Pollution Reduction Scheme (CPRS)
and the Renewable Energy Target (RET) Scheme. The Department of
Climate Change will be taking submissions on the draft regulations
up to close of business 11 January 2010.
The draft CPRS regulations have been updated to include
additional activities that quality for emissionintensive,
trade-exposed activity (EITE) assistance.
The new RET regulations provide assistance to EITE eligible
companies that incur increased costs due to compliance with the RET
scheme. Where an activity is identified as an EITE activity under
the CPRS regulations, partial exemptions under the RET regulations
are available in relation to those activities.
Revised CPRS Regulations
The revised CPRS regulations identify the following activities
as highly EITE activities: production of bulk flat glass;
production of methanol; production of carbon black; production of
silicon; smelting zinc; manufacturing newsprint; aluminium
smelting; production of magnesia; dry pulp manufacturing;
cartonboard manufacturing; packaging and industrial paper
manufacturing; and printing and writing paper manufacturing.
Moderately EITE activities under the CPRS regulations include:
production of glass containers; production of white titanium
dioxide pigment; integrated production of lead and zinc; and the
production of high purity ethanol.
The rates of assistance that will be provided to EITE industries
under the CPRS will be 94.5% for highly emissions-intensive
activities and 66% for moderately emissions-intensive activities in
The revised CPRS regulations have also incorporated a
'true-up' mechanism for the allocation of Australian
Emission Units (AEU). This means that the allocation of AEU will be
more closely aligned to actual production rather than an estimate
of the likely production.
Amendments have also been made to the provisions in relation to
large electricity users. These changes allow persons with
'operational control' of a facility, the controlling
corporation or the person who holds the electricity supply
contract, to apply for large user electricity certificates where
the facility has consumed more than 2,000 gigawatt hours of
electricity in the 2008-09 financial year. The certificates are
determined by the Climate Change Regulatory Authority on a
If your business is emissions-intensive and trade-exposed but
does not qualify as an EITE activity under the revised CPRS
regulations, now is the time to send your comments to the
Department of Climate Change setting out the reasons why your
business should be categorised as EITE and benefit from the EITE
Under the RET regulations, eligible EITE companies will receive
partial exemptions for RET liabilities in relation to the purchase
of electricity used in carrying out EITE activities.
Where an entity carries out an EITE activity, partial exemption
certificates (PEC) will be available for the 'RET liable'
electricity used in that activity. The PEC will identify the amount
of electricity from which the entity will be exempt for that year.
The entity will then be able to provide a copy of the PEC to their
electricity retailer, who in turn, will use the PEC to remove the
RET liability for the supply of that electricity.
If your business is a large user of electricity, however does
not qualify as an EITE activity, PEC will not be available to your
business under the proposed RET regulations. You have until 11
January 2010 to provide reasons why your business should qualify as
EITE to the Department of Climate Change.
How can DLA Phillips Fox assist you?
DLA Phillips Fox can help you to navigate your way through the
complex issues and to develop a measured and commercially astute
response. We can:
Prepare submissions on your behalf if you would like to comment
on the CPRS or RET regulations.
Assist with identifying whether your business is eligible for
the EITE assistance program.
Assist with the application process for EITE assistance.
Determine whether PEC are available for your business
DLA Phillips Fox is one of the largest legal firms in
Australasia and a member of DLA Piper Group, an alliance of
independent legal practices. It is a separate and distinct legal
entity. For more information visit
This publication is intended as a first point of reference and
should not be relied on as a substitute for professional advice.
Specialist legal advice should always be sought in relation to any
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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