Clean Energy Amendment Regulation 2012 (No. 1) (Cth)

Clean Energy Amendment Regulation 2012 (No. 1)¹

Select Legislative Instrument 2012 No. 12

I, QUENTIN BRYCE, Governor-General of the Commonwealth of Australia, acting with the advice of the Federal Executive Council, make the following regulation under the Clean Energy Act 2011.

Dated 22 February 2012

QUENTIN BRYCE

Governor-General

By Her Excellency’s Command

GREG COMBET

Minister for Climate Change and Energy Efficiency

Name of regulation

This regulation is the Clean Energy Amendment Regulation 2012 (No. 1).

Commencement

This regulation commences on the commencement of sections 3 to 303 of the Clean Energy Act 2011.

Amendment of Clean Energy Regulations 2011

Schedule 1 amends the Clean Energy Regulations 2011.

Schedule 1 Amendments

(section 3)

[1] Regulation 1.3, after definition of NGER Regulations

insert

Note Section 5 of the Act contains definitions for the purposes of the Act that also apply in these Regulations, including:

·benchmark average auction charge

·carbon unit

·controlling corporation

·covered emission

·designated joint venture

·eligible financial year

·executive officer

·facility

·free carbon unit

·Jobs and Competitiveness Program

·liability transfer certificate

·non-group entity

·operational control.

[2] After Part 3

insert

Part 4 Carbon units

Division 5 Special provisions relating to free carbon units

4.1Buy-back of certain free carbon units — specified factor

(1)For a request mentioned in subsection 116 (2) of the Act that is received by the Regulator during a period mentioned in the table in subregulation (2), the factor specified for the formula in subsection 116 (2) of the Act is:

where:

r is the per annum yield (expressed as a percentage) for BBB rated corporate bonds with 1 to 5 years maturity, as published by the Reserve Bank of Australia, that is the latest daily rate published prior to the day the request to the Regulator was received.

n is the number of days before 15 June in the fixed charge year that the request to the Regulator was received.

(2)For subregulation (1), the table is the following.

Item

Period

1 1 September 2012 to 14 June 2013

2 1 September 2013 to 14 June 2014

3 1 September 2014 to 14 June 2015

Item	Period
1	1 September 2012 to 14 June 2013
2	1 September 2013 to 14 June 2014
3	1 September 2014 to 14 June 2015

(3)For a request mentioned in subsection 116 (2) of the Act that is received by the Regulator during a period mentioned in the following table, the factor specified for the formula in subsection 116 (2) of the Act is one.

Item

Period

1 15 June 2013 to 1 February 2014

2 15 June 2014 to 1 February 2015

3 15 June 2015 to 1 February 2016

Item	Period
1	15 June 2013 to 1 February 2014
2	15 June 2014 to 1 February 2015
3	15 June 2015 to 1 February 2016

[3] Before Part 8

insert

Part 7 Jobs and Competitiveness Program

Division 2 Formulation of the Jobs and Competitiveness Program

7.1Jobs and Competitiveness Program

For subsection 145 (1) of the Act, the Jobs and Competitiveness Program is set out in Schedule 1.

[4] After Part 8

insert

Part 21 Review of decisions

21.1Reviewable decisions — Jobs and Competitiveness Program

For item 30 of the table in section 281 of the Act, the decisions of the Regulator under the Jobs and Competitiveness Program, set out in the following table, are prescribed.

Note The Jobs and Competitiveness Program is set out in Schedule 1.

Item

Decision under the Jobs and Competitiveness Program in Schedule 1

1 A decision under paragraph 803 (2) (b) of the program to refuse an application

2 A decision under paragraph 803 (8) (a) of the program to consider an application on the basis of substituting an amount or volume

3 A decision under paragraph 803 (8) (c) of the program to refuse to consider an application

4 A decision under paragraph 804 (1) (b) of the program to refuse an application for the issue of free carbon units

5 A decision under subclause 902 (7) of the program to reduce the number of free carbon units to be issued by the number of carbon units that would be likely to be required to be relinquished in accordance with Part 13 of the program

6 A decision under subclause 910 (1) of the program to amend a large user certificate

7 A decision under clause 911 of the program to reduce the number of carbon units allocated

8 A decision under subclause 1304 (4) of the program to issue a relinquishment notice

9 A decision under subclause 1306 (4) of the program to issue a relinquishment notice

Schedule 1 Jobs and Competitiveness Program

(section 7.1)

Part 1Preliminary

Part 2Definitions and related concepts

Division 1Definitions

Division 2Meaning of saleable quality

Division 3Meaning of significant expansion

Division 4Meaning of closed

Division 5Meaning of new facility and series of new facilities

Part 3Emissions‑intensive trade‑exposed activities

Division 1General

Division 2Production of glass containers

Division 3Production of bulk flat glass

Division 4Production of methanol

Division 5Production of carbon black

Division 6Production of white titanium dioxide (TiO₂) pigment

Division 7Production of silicon

Division 8Smelting zinc

Division 9Integrated production of lead and zinc

Division 10Aluminium smelting

Division 11Alumina refining

Division 12Production of high purity ethanol

Division 13Production of magnesia

Division 14Manufacture of newsprint

Division 15Dry pulp manufacturing

Division 16Cartonboard manufacturing

Division 17Packaging and industrial paper manufacturing

Division 18Printing and writing paper manufacturing

Division 19Tissue paper manufacturing

Division 20Integrated iron and steel manufacturing

Division 21Manufacture of carbon steel from cold ferrous feed

Division 22Petroleum refining

Division 23Production of ethene (ethylene)

Division 24Production of polyethylene

Division 25Production of synthetic rutile

Division 26Production of manganese

Division 27Production of clinker

Division 28Production of lime

Division 29Production of fused alumina

Division 30Production of copper

Division 31Production of carbamide (urea)

Division 32Production of sodium carbonate (soda ash) and sodium bicarbonate

Division 33Production of ammonium nitrate

Division 34Production of ammonia

Division 35Production of iron ore pellets

Division 36Production of liquefied natural gas

Division 37Production of magnetite concentrate

Part 4Allocative baselines

Part 5Eligibility to apply for free carbon units

Division 1General

Division 2Personal eligibility — existing activity in previous financial year

Division 3Personal eligibility — no existing activity in previous financial year

Part 6Approval of application form for free carbon units

Part 7Application for free carbon units

Division 1General

Division 2Shared eligibility

Division 3Special arrangements for facility without continuous emissions-intensive trade-exposed activity

Division 4Special arrangements for significant expansion

Division 5Special arrangements for new facilities

Division 6Special arrangements for sub-threshold facilities

Division 7Measuring emissions in applications

Part 8Consideration of application for free carbon units

Division 1Further information about application

Division 2Revision of application — inadequate information about relevant product

Division 3Decision on application for free carbon units

Division 4Notification of proposed refusal

Division 5Notification of decision

Division 6Correction of inaccurate allocation of free carbon units

Division 7Revision of application where outstanding debt

Part 9Method of calculating the number of free carbon units to be issued to a person

Division 1General

Division 2Special arrangements for facility without continuous emissions-intensive trade-exposed activity

Division 3Special arrangements for significant expansion

Division 4Formula

Division 5Modification of formula in Division 4 — large user electricity contracts

Division 6Maximum number of units to be allocated to new facilities

Division 7Sub-threshold emissions adjustments

Division 8Adjustments relating to Joint Petroleum Development Area and Greater Sunrise unit area

Part 10Year to which units apply

Division 1Application in first year of the program

Division 2Application in second year of the program

Division 3Application in third year of the program

Division 4Application in subsequent years

Part 11Keeping records and materials

Part 12Reporting requirements

Part 13Relinquishment of carbon units

Division 1General

Division 2Closure of equipment

Division 3Negative allocation

Division 4Inaccurate allocation of free carbon units

Part 14Incidental provisions

Part 1 Preliminary

This is the Jobs and Competitiveness Program.

(1) This program deals with the issue of free carbon units in respect of activities that, under the program, are taken to be emissions‑intensive trade‑exposed activities.

(2)Free carbon units must not be issued to a person in accordance with this program unless the person:

(a)meets the requirements specified in this program; and

(b)has a Registry account.

The activities must be carried on in Australia during any of the following eligible financial years:

(a)the eligible financial year starting on 1 July 2012;

(b)any subsequent eligible financial year.

The extraction of coal is not an activity under this program that is taken to be an emissions‑intensive trade‑exposed activity.

Part 2 Definitions and related concepts

Division 1Definitions

(1) In this program:

applicant means a person who makes an application for free carbon units in the capacity of an eligible person.

Note An applicant will deal with the Regulator through one or more contact persons who will be nominated in the application.

ASTM followed by a number (for example, ASTM D6347/D6347M-99) means a standard of that number issued by ASTM International and, if a date is included, of that date.

Note ASTM means the American Society for Testing and Materials.

carbon steel means material which:

(a)contains by mass more iron (Fe) than any other single element; and

(b)has a carbon (C) concentration less than 2%.

closed, in relation to equipment: see clause 204.

condensate has the same meaning as in the Excise Act 1901.

eligible person: see Part 5.

eligible petroleum feedstocks means any one or more of the following that were not produced through the conduct of an emissions-intensive trade-exposed activity carried on in Australia:

(a)catalytic cracker feedstocks that are processed in the catalytic cracker in carrying on the emissions-intensive trade-exposed activity and have a density of 0.84 to 0.98 kg/L at 15 °C and 1 atmosphere;

(b)hydro-cracker unit feedstocks that are processed in the hydro-cracking unit in carrying on the emissions-intensive trade-exposed activity and have a density of 0.84 to 0.98 kg/L at 15 °C and 1 atmosphere;

(c)reformer unit feedstocks that are used to produce reformate in carrying on the emissions-intensive trade‑exposed activity and have a density of 0.6 to 0.80 kg/L at 15 °C and 1 atmosphere;

(d)alkylation unit feedstocks that are used to produce alkylate in carrying on the emissions-intensive trade‑exposed activity and have a density of 0.55 to 0.62 kg/L at 15 °C and 1 atmosphere;

(e)bitumen feedstocks that are used to produce bitumen in carrying on the emissions-intensive trade-exposed activity and have a density of at least 0.95 kg/L at 15 °C and 1 atmosphere;

(f)lubricant base stock feedstocks that are used to produce lubricant base stocks in carrying on the emissions‑intensive trade-exposed activity and have a density of 0.84 to 0.98 kg/L at 15 °C and 1 atmosphere.

equipment means equipment that is used, or is to be used, to carry on an emissions-intensive trade-exposed activity, including the following:

(a)an apparatus;

(b)an appliance;

(c)a boiler;

(d)a chimney;

(e)a crane;

(f)a device;

(g)a dredge;

(h)a dryer;

(i)an electrolytic cell;

(j)an engine;

(k)a furnace;

(l)a generator;

(m)an incinerator;

(n)an instrument;

(o)a kiln;

(p)a machine;

(q)an oven;

(r)plant;

(s)a retort;

(t)a structure;

(u)a tool.

expected production, or expected additional production, means:

(a)for an application to which subclause 705 (1) or (2) applies — the amount or volume of the relevant product that is reasonably likely to be produced in the financial year for which free carbon units are to be provided; and

(b)for an application to which subclause 706 (1) applies — the amount or volume of the relevant product that is reasonably likely to be produced for the facilities that are taken to have undergone a significant expansion in the financial year for which free carbon units are to be provided above the amount of the production of that relevant product in the previous financial year.

highly emissions-intensive, in relation to an emissions‑intensive trade-exposed activity, means that the base rate of assistance for the activity is explained in subclause 907 (4).

moderately emissions-intensive, in relation to an emissions-intensive trade-exposed activity, means that the base rate of assistance for the activity is explained in subclause 907 (4).

new facility: see clause 205.

NGER Measurement Determination means the National Greenhouse and Energy Reporting (Measurement) Determination 2008 or any other determination for the measurement of emissions issued by the Minister under subsection 10 (3) of the NGER Act.

output means the product or products mentioned in the description of an emissions-intensive trade-exposed activity that result from the carrying on of that activity (whether or not the product or products are the basis for the issue of free carbon units for the activity under Part 3).

product means a product that is specified in Part 3 as the basis for the issue of free carbon units in relation to the carrying on of an emissions-intensive trade-exposed activity.

r is the per annum yield (expressed as a percentage) for BBB rated corporate bonds with 1 to 5 years maturity, as published by the Reserve Bank of Australia, that is the latest daily rate published prior to the day an application is approved by the Regulator.

relevant product means:

(a)in relation to an application for the issue of free carbon units — a product that is identified in the application as meeting the requirements specified in Part 3 for the basis for the issue of those free carbon units; and

(b)in relation to free carbon units that have been issued — the product that meets the requirements specified in Part 3 as the basis for the issue of those free carbon units.

saleable quality: see clause 202.

series of new facilities: see clause 205.

significant expansion: see clause 203.

stabilised crude petroleum oil has the meaning given in the Australian Taxation Office Interpretative Decision, ATO ID 2008/154, published on 28 November 2008.

unleaded petrol means all grades of unleaded petrol meeting Australian or international standards, including standard unleaded petrol, premium unleaded petrol and other proprietary forms of unleaded petrol.

(2)In this program, unless the contrary intention appears:

(a)a concentration of a substance that is expressed as a percentage is a percentage with respect to mass; and

(b)a reference to the moisture content of a substance expressed as a percentage is a percentage with respect to mass.

(3)In this program, unless the contrary intention appears, an emissions-intensive trade-exposed activity is carried on at a facility if the activity, or series of activities, that constitute the facility includes some or all of the transformations specified in Part 3 as being required for carrying on an emissions-intensive trade-exposed activity.

Note Subsection 9 (1) of the NGER Act explains how an activity or series of activities constitutes a facility.

Division 2Meaning of saleable quality

(1) In this program, saleable quality is intended to have its ordinary meaning as understood by participants in the relevant market, subject to subclauses (2) to (5).

(2)A product is taken to be of saleable quality if it is produced to a level at which it would ordinarily be considered by participants in the relevant market:

(a)to be an output of a process carried on as part of an emissions-intensive trade-exposed activity; and

(b)to have a commercial value as that output.

(3)A sub-standard product that is discarded is taken not to be of saleable quality.

(4)A product that is recycled back into the same emissions‑intensive trade-exposed activity to produce a new output may be taken to be of saleable quality only once.

Examples

1 Metal that is re-melted in the same equipment in which it was produced.

2 Paper that is re-inputted into a paper making process.

(5)Material that is scrapped or lost before it is packaged as a product that is of saleable quality:

(a)is taken not to be of saleable quality; and

(b)is taken not to be included in an amount of product that is of saleable quality that is to be counted for the basis for allocation.

Division 3Meaning of significant expansion

(1) In this program, a facility to which an application for the issue of free carbon units relates is taken to have undergone significant expansion only if:

(a)an emissions-intensive trade-exposed activity was carried on at the facility in the financial year before the financial year to which the application relates; and

(b)equipment has been installed, or is to be installed, to carry on the activity; and

(c)the equipment has not previously been taken into account under this program in relation to the significant expansion of a facility; and

(d)for equipment that has been installed — the equipment was first fully installed at the facility not more than 4 years before the start of the financial year to which the application relates; and

(e)for equipment that is to be installed — the equipment is expected to be installed, or substantially installed, within 1 year after the end of the financial year to which the application relates; and

(f)after the equipment is commissioned, and any existing equipment that is to be decommissioned has been decommissioned, the maximum productive capacity of the equipment used to produce the relevant product will be more than 20% greater than the maximum productive capacity of the equipment that existed before the installation.

(2)In paragraph (1) (f), in working out the maximum productive capacity of the equipment that existed before the installation, decommissioned equipment that exists at the site is not to be included if it:

(a)has not been used since the equipment has been installed to carry on the activity; and

(b)is not proposed to be used for at least 12 months after the financial year to which the application relates.

Division 4Meaning of closed

(1) In this program, equipment is taken to have been closed only in a circumstance set out in subclause (2) or (3).

(2)Equipment is taken to have been closed if:

(a)one or more items of equipment have been used to carry out an emissions-intensive trade-exposed activity at one or more facilities; and

(b)the production of all relevant products at the facility or facilities has ceased; and

(c)it is, or becomes, unlikely that the relevant products will be produced again at the facility or facilities within 1 year after the production ceased.

(3)Equipment is taken to have been closed in relation to the production of a relevant product if:

(a)one or more items of equipment have been used to carry out an emissions-intensive trade-exposed activity at one or more facilities; and

(b)the equipment has been producing 2 or more relevant products as a result of the same emissions-intensive trade‑exposed activity; and

(c)all production of one or more of those relevant products at the facility or facilities has ceased; and

(d)the equipment is still producing at least one other relevant product; and

(e)it is, or becomes, unlikely that production of one or more of the relevant products mentioned in paragraph (c) will resume at the facility or facilities within 1 year after the production of that relevant product ceased.

Division 5Meaning of new facilityand series of new facilities

(1) In this program, a facility to which an application for the issue of free carbon units relates is a new facility only in the circumstances set out in subclause (2).

(2)A facility is a new facility if all of the following apply:

(a)either:

(i)no relevant product was produced at the site of the facility before 1 July 2011; or

(ii)relevant product was produced at the site of the facility before 1 July 2011 but the principal equipment used in the previous financial year at the site of the facility to carry on the emissions-intensive trade-exposed activity was not used to produce relevant product at that site before 10 July 2011;

(b)the earlier of the following occurred on or after 10 July 2011:

(i)a final investment decision was published in relation to a project to construct and commission at the site of the facility equipment that is to be used to carry on the emissions-intensive trade-exposed activity;

(ii)construction commenced on a project at the site of the facility in relation to equipment that is to be used to carry on the emissions-intensive trade-exposed activity;

(c)if it is part of a series of new facilities — the series of new facilities does not include one or more facilities that are not new facilities.

(3)For subparagraph (2) (b) (i), in considering whether the decision that was published was a final investment decision in relation to the project on or after 10 July 2011, the Regulator must have regard to the following matters:

(a)the content of any published statement by the project proponent showing a commitment to proceed with the construction of the project;

(b)the project proponent’s rights to land for the construction of the project;

(c)whether contracts for the supply and construction of the project’s major equipment (including contract provisions for project cancellations) were executed;

(d)the status of all planning and construction approvals and licences necessary for the commencement of construction of the project (including completed and approved environmental impact statements);

(e)the level of commitment to financing arrangements for the project;

(f)whether, as at the start of 10 July 2011, a firm date had been set for project construction to commence;

(g)any other matter that the Regulator considers relevant.

(4)A series of new facilities is 2 or more new facilities that carry on activities that are an emissions-intensive trade-exposed activity only if the activities at all of those facilities are considered.

Part 3 Emissions‑intensive trade‑exposed activities

Division 1General

(1) This Part identifies emissions‑intensive trade‑exposed activities.

(2)A reference in this Part to an emissions‑intensive trade‑exposed activity includes the following information:

(a)a general name for the activity;

(b)the description of the activity;

(c)whether the activity is:

(i)highly emissions-intensive; or

(ii)moderately emissions-intensive;

(d)a summary of each basis for the issue of free carbon units in respect of the activity.

(3)Each allocative baseline for the activity is set out in Part 4.

Division 2Production of glass containers

(1) The production of glass containers is the physical and chemical transformation of silica (silicon dioxide (SiO₂)) and other raw and recycled materials (such as cullet) to produce blown or pressed glass containers, by controlled melting and forming in a contiguous process.

(2)The production of glass containers is specified as an emissions‑intensive trade-exposed activity.

(3)The production of glass containers is a moderately emissions‑intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of blown and pressed glass containers that is:

(a)produced by carrying on the emissions-intensive trade‑exposed activity; and

(b)of saleable quality.

Note Saleable quality is explained in Part 2.

Division 3Production of bulk flat glass

(1) The production of bulk flat glass is the physical and chemical transformation of silica (silicon dioxide (SiO₂)) and other raw and recycled materials (such as cullet) to produce bulk flat glass products, including wired glass and patterned glass, by controlled melting and forming in a contiguous process.

(2)The production of bulk flat glass is specified as an emissions‑intensive trade-exposed activity.

(3)The production of bulk flat glass is a highly emissions‑intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of bulk flat glass that is:

(a)produced by carrying on the emissions-intensive trade‑exposed activity; and

(b)of saleable quality.

Note Saleable quality is explained in Part 2.

Division 4Production of methanol

(1) The production of methanol is the chemical transformation of one or more of the following:

(a)hydrocarbons;

(b)hydrogen feedstocks;

(c)carbon feedstocks;

(d)oxygen feedstocks;

to produce liquid methanol (CH₃OH) in which the concentration of methanol is at least 98%.

(2)The production of methanol is specified as an emissions‑intensive trade‑exposed activity.

(3)The production of methanol is a highly emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of 100% equivalent methanol (CH₃OH) that is produced by carrying on the emissions-intensive trade-exposed activity.

Division 5Production of carbon black

(1) The production of carbon black is the chemical transformation of gaseous or liquid hydrocarbons to produce a colloidal carbon material (known as carbon black) in the form of spheres or of fused aggregates of the spheres.

(2)The particle size of the colloidal carbon must be below 1 000 nm in at least one dimension.

(3)The production of carbon black is specified as an emissions-intensive trade‑exposed activity.

(4)The production of carbon black is a highly emissions‑intensive activity.

Note See Part 4.

(5)The basis for the issue of free carbon units is by a tonne, on a dry weight basis, of pelletised carbon black that is:

(a)produced by carrying on the emissions-intensive trade‑exposed activity; and

(b)of saleable quality.

Note Saleable quality is explained in Part 2.

Division 6Production of white titanium dioxide (TiO₂) pigment

(1) The production of white titanium dioxide (TiO₂) pigment is the chemical transformation of one or more of the following:

(a)rutile (TiO₂);

(b)synthetic rutile (TiO₂);

(c)ilmenite (FeTiO₃);

(d)leucoxene;

(e)titanium slag that has an iron (Fe) concentration of at least 7%;

to produce white titanium dioxide (TiO₂) pigment.

(2)The white titanium dioxide (TiO₂) pigment must:

(a)conform with ASTM classification D476-00; and

(b)have an iron (Fe) concentration of no more than 0.5%.

(3)The production of white titanium dioxide (TiO₂) pigment is specified as an emissions-intensive trade-exposed activity.

(4)The production of white titanium dioxide (TiO₂) pigment is a moderately emissions-intensive activity.

Note See Part 4.

(5)The basis for the issue of free carbon units is by a tonne of white titanium dioxide (TiO₂) pigment that:

(a)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(b)conforms with ASTM classification D476-00; and

(c)has an iron (Fe) concentration of no more than 0.5%; and

(d)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 7Production of silicon

(1) The production of silicon is the chemical transformation of silica (silicon dioxide (SiO₂)) to produce silicon (Si) with a concentration of silicon of at least 98.0%, conducted in accordance with the following overall chemical equation:

SiO_2(s) + 2C_(s) →Si_(s) + 2CO_(g)

(2)The production of silicon is specified as an emissions-intensive trade‑exposed activity.

(3)The production of silicon is a highly emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of silicon that:

(a)has a concentration of silicon of at least 98.0%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 8Smelting zinc

(1) Smelting zinc is the chemical transformation of either or both of:

(a)concentrated mineralised zinc compounds; and

(b)zinc-bearing secondary materials;

to produce zinc metal (Zn) with a concentration of zinc of at least 99.95%.

(2)Smelting zinc is specified as an emissions-intensive trade‑exposed activity.

(3)Smelting zinc is a highly emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of zinc that:

(a)has a concentration of zinc of at least 99.95%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 9Integrated production of lead and zinc

(1) The integrated production of lead and zinc is the chemical transformation of either or both of:

(a)concentrated mineralised lead compounds with or without additional lead bearing secondary materials; and

(b)concentrated mineralised zinc compounds with or without additional zinc bearing secondary materials;

to produce the products mentioned in subclause (2).

(2)For subclause (1), the products are:

(a)lead metal (Pb) with a concentration of lead of at least 99.97%; and

(b)zinc in fume (Zn) with a concentration of zinc of at least 60%.

(3)The integrated production of lead and zinc is specified as an emissions‑intensive trade-exposed activity.

(4)The integrated production of lead and zinc is a moderately emissions-intensive activity.

Note See Part 4.

(5)For the production of lead metal, the basis for the issue of free carbon units is by a tonne of lead metal (Pb) that:

(a)has a concentration of lead of at least 99.97%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

(6)For the production of zinc in fume, the basis for the issue of free carbon units is by a tonne of 100% equivalent zinc contained within the zinc in fume (Zn) that:

(a)has a concentration of zinc of at least 60%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity.

Division 10Aluminium smelting

(1) Aluminium smelting is the physical and chemical transformation of alumina (aluminium oxide (Al₂O₃)) into aluminium metal (Al) of saleable quality.

(2)Aluminium smelting is specified as an emissions-intensive trade-exposed activity.

(3)Aluminium smelting is a highly emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of primary aluminium that:

(a)has a concentration of aluminium of at least 98%; and

(b)is produced as part of carrying on the emissions-intensive trade-exposed activity; and

(c)is weighed after electrolysis but before casting.

Division 11Alumina refining

(1) Alumina refining is the physical and chemical transformation of bauxite (which is an ore containing mineralised aluminium compounds) into alumina (aluminium oxide (Al₂O₃)) with a concentration of aluminium oxide of at least 95%.

(2)Alumina refining is specified as an emissions-intensive trade‑exposed activity.

(3)Alumina refining is a highly emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a tonne of alumina (aluminium oxide (Al₂O₃)) that:

(a)has a concentration of aluminium oxide of at least 95%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 12Production of high purity ethanol

(1) The production of high purity ethanol is the chemical transformation of fermentable sugars (such as C₆H₁₂O₆, C₅H₁₀O₅, C₁₂H₂₂O₁₁ or C₁₈H₃₂O₁₆) to ethanol (C₂H₅OH) and subsequent purification process to obtain a solution of high purity ethanol where the concentration of ethanol (C₂H₅OH) is at least 95% with respect to volume.

(2)The production of high purity ethanol is specified as an emissions-intensive trade-exposed activity.

(3)The production of high purity ethanol is a moderately emissions-intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units is by a kilolitre of 100% equivalent ethanol (C₂H₅OH) at 20 °C that is produced by carrying on the emissions-intensive trade-exposed activity, assuming a density of ethanol (C₂H₅OH) of 789.24 kg/m³ at 20 °C.

Division 13Production of magnesia

(1) The production of magnesia is the chemical and physical transformation of magnesite (magnesium carbonate (MgCO₃)) into one or more of the following magnesia products:

(a)caustic calcined magnesia that:

(i)has a concentration of magnesium oxide (MgO) of at least 75%; and

(ii)is burned between 650 °C and 1 200 °C;

(b)deadburned magnesia that:

(i)has a concentration of magnesium oxide (MgO) of at least 85%; and

(ii)has grain density of 2.85 g/cm³ to 3.45 g/cm³; and

(iii)is burned between 1 300 °C and 2 200 °C;

(c)electrofused magnesia that:

(i)has a concentration of magnesium oxide (MgO) of at least 90%; and

(ii)has grain density of greater than 3.45 g/cm³; and

(iii)is fused at temperatures higher than 2 750 °C.

(2)The production of magnesia is specified as an emissions‑intensive trade‑exposed activity.

(3)The production of magnesia is a highly emissions-intensive activity.

Note See Part 4.

(4)For the production of caustic calcined magnesia, the basis for the issue of free carbon units is by a tonne of caustic calcined magnesia on a dry weight basis that:

(a)has a concentration of magnesium oxide (MgO) of at least 75%; and

(b)is produced by, or as part of, carrying on the emissions‑intensive trade-exposed activity; and

(c)is of saleable quality;

whether or not it is later transformed into deadburned magnesia or electrofused magnesia.

Note Saleable quality is explained in Part 2.

(5)For the production of deadburned magnesia, the basis for the issue of free carbon units is by a tonne of deadburned magnesia on a dry weight basis that:

(a)has a concentration of magnesium oxide (MgO) of at least 85%; and

(b)has grain density of 2.85 g/cm³ to 3.45 g/cm³; and

(c)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(d)is of saleable quality.

Note Saleable quality is explained in Part 2.

(6)For the production of electrofused magnesia, the basis for the issue of free carbon units is by a tonne of electrofused magnesia on a dry weight basis that:

(a)has a concentration of magnesium oxide (MgO) of at least 90%; and

(b)has grain density of greater than 3.45 g/cm³; and

(c)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(d)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 14Manufacture of newsprint

(1) The manufacture of newsprint is the physical or chemical transformation, through an integrated process, of any or all of woodchips, sawdust, wood pulp and recovered paper into rolls of uncoated newsprint that:

(a)has a grammage range of 30 g/m² to 80 g/m²; and

(b)has a moisture content in the range of 6% to 11%; and

(c)is generally usable for newspaper products.

(2)The manufacture of newsprint is specified as an emissions‑intensive trade‑exposed activity.

(3)The manufacture of newsprint is a highly emissions-intensive activity.

Note See Part 4.

(4)For the manufacture of uncoated newsprint that:

(a)has a grammage range of 30 g/m² to 80 g/m²; and

(b)has a moisture content in the range of 6% to 11%; and

(c)is generally usable for newspaper products;

the basis for the issue of free carbon units is the total air dried tonnes of rolls of uncoated newsprint of saleable quality produced by carrying on the emissions-intensive trade-exposed activity.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust, the basis for the issue of free carbon units is by a tonne of bone dried equivalent pulp that is:

(a)used in the integrated process of manufacturing newsprint; and

(b)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For the production of pulp from recovered paper, the basis for the issue of free carbon units is by a tonne of bone dried equivalent pulp that is:

(a)used in the integrated process of manufacturing newsprint; and

(b)produced as part of carrying on the emissions-intensive trade-exposed activity.

(7)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 15Dry pulp manufacturing

(1) Dry pulp manufacturing is the physical or chemical transformation of any or all of wood chips, sawdust, wood pulp and recovered paper into either or both of rolls and bales of dry pulp that:

(a)has a moisture content in the range of 4% to 14%; and

(b)is generally useable in either or both of:

(i)paper manufacturing; and

(ii)the production of sanitary products (such as a fluff pulp layer in sanitary products).

(2)Dry pulp manufacturing is specified as an emissions-intensive trade‑exposed activity.

(3)Dry pulp manufacturing is a highly emissions-intensive activity.

Note See Part 4.

(4)For dry pulp manufacturing, the basis for the issue of free carbon units is by a tonne of either or both of rolls and bales of dry pulp that:

(a)has a moisture content in the range of 4% to 14%; and

(b)is generally useable in either or both of:

(i)paper manufacturing; and

(ii)the production of sanitary products (such as a fluff pulp layer in sanitary products); and

(c)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(d)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust as part of dry pulp manufacturing, the basis for the issue of free carbon units is by an air dried tonne (applying a 10% moisture content) of equivalent pulp that is:

(a)produced from either or both of woodchips and sawdust; and

(b)used in the process of manufacturing dry pulp; and

(c)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 16Cartonboard manufacturing

(1) Cartonboard manufacturing is the physical or chemical transformation of any or all of wood chips, sawdust, wood pulp and recovered paper into rolls of cartonboard that:

(a)has a grammage range of 150 g/m² to 500 g/m²; and

(b)has a moisture content in the range of 4% to 11%; and

(c)is coated; and

(d)is generally useable as cartonboard product such as coated kraft liner, coated multiply and other coated paperboard.

(2)Cartonboard manufacturing is specified as an emissions‑intensive trade‑exposed activity.

(3)Cartonboard manufacturing is a highly emissions-intensive activity.

Note See Part 4.

(4)For cartonboard manufacturing, the basis for the issue of free carbon units is by a tonne of rolls of cartonboard that:

(a)has a grammage range of 150 g/m² to 500 g/m²; and

(b)has a moisture content in the range of 4% to 11%; and

(c)is coated; and

(d)is generally useable as cartonboard product such as coated kraft liner, coated multiply and other coated paperboard; and

(e)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(f)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust as part of cartonboard manufacturing, the basis for the issue of free carbon units is by an air dried tonne (applying a 10% moisture content) of equivalent pulp that is:

(a)produced from either or both of woodchips and sawdust; and

(b)used in the process of cartonboard manufacturing; and

(c)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 17Packaging and industrial paper manufacturing

(1) Packaging and industrial paper manufacturing is the physical or chemical transformation of any or all of wood chips, sawdust, wood pulp and recovered paper into rolls of packaging and industrial paper that:

(a)is produced from wholly or partially unbleached input fibre; and

(b)has a grammage range of 30 g/m² to 500 g/m²; and

(c)has a moisture content in the range of 4% to 11%; and

(d)is uncoated; and

(e)is generally useable as a packaging or industrial paper, including products such as kraft liner, recycled or multiply liner, medium, sack and bag paper, wrapping paper, plasterboard liner, horticultural paper and building paper.

(2)Packaging and industrial paper manufacturing is specified as an emissions‑intensive trade-exposed activity.

(3)Packaging and industrial paper manufacturing is a highly emissions-intensive activity.

Note See Part 4.

(4)For packaging and industrial paper manufacturing, the basis for the issue of free carbon units is by a tonne of rolls of packaging and industrial paper that:

(a)is produced from wholly or partially unbleached input fibre; and

(b)has a grammage range of 30 g/m² to 500 g/m²; and

(c)has a moisture content in the range of 4% to 11%; and

(d)is uncoated; and

(e)is generally useable as a packaging or industrial paper product, including products such as kraft liner, recycled or multiply liner, medium, sack and bag paper, wrapping paper, plasterboard liner, horticultural paper and building paper; and

(f)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(g)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust as part of packaging and industrial paper manufacturing, the basis for the issue of free carbon units is by an air dried tonne (assuming a 10% moisture content) of equivalent pulp that is:

(a)produced from either or both of woodchips and sawdust; and

(b)used in the process of manufacturing packaging and industrial paper; and

(c)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 18Printing and writing paper manufacturing

(1) Printing and writing paper manufacturing is the physical or chemical transformation of any or all of wood chips, sawdust, wood pulp and recovered paper into rolls of coated or uncoated printing and writing paper that:

(a)is produced from 100% bleached or brightened input fibre; and

(b)has a grammage range of 42 g/m² to 350 g/m²; and

(c)has a moisture content in the range of 4% to 11%; and

(d)is generally useable as a printing and writing paper product, including products such as offset paper, copy paper, laser printing paper, magazine paper, filing card paper, manilla, book printing paper, envelope paper, forms paper, scholastic paper, cheque paper and security paper.

(2)Printing and writing paper manufacturing is specified as an emissions‑intensive trade-exposed activity.

(3)Printing and writing paper manufacturing is a highly emissions-intensive activity.

Note See Part 4.

(4)For printing and writing paper manufacturing, the basis for the issue of free carbon units is by a tonne of rolls of coated or uncoated printing and writing paper that:

(a)is produced from 100% bleached or brightened input fibre; and

(b)has a grammage range of 42 g/m² to 350 g/m²; and

(c)has a moisture content in the range of 4% to 11%; and

(d)is generally useable as a printing and writing paper product, including products such as offset paper, copy paper, laser printing paper, magazine paper, filing card paper, manilla, book printing paper, envelope paper, forms paper, scholastic paper, cheque paper and security paper; and

(e)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(f)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust as part of printing and writing paper manufacturing, the basis for the issue of free carbon units is by an air dried tonne (assuming a 10% moisture content) of equivalent pulp that is:

(a)produced from either or both of woodchips and sawdust; and

(b)used in the process of manufacturing printing and writing paper; and

(c)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 19Tissue paper manufacturing

(1) Tissue paper manufacturing is the physical or chemical transformation of any or all of wood chips, sawdust, wood pulp and recovered paper into rolls of uncoated tissue paper that:

(a)has a grammage range of 13 g/m² to 75g/m²; and

(b)has a moisture content in the range of 4% to 11%; and

(c)is generally useable in sanitary products such as facial tissue, paper towel, bathroom tissue and napkins.

(2)Tissue paper manufacturing is specified as an emissions‑intensive trade‑exposed activity.

(3)Tissue paper manufacturing is a moderately emissions‑intensive activity.

Note See Part 4.

(4)For tissue paper manufacturing, the basis for the issue of free carbon units is by a tonne of rolls of uncoated tissue paper that:

(a)has a grammage range of 13 g/m² to 75g/m²; and

(b)has a moisture content in the range of 4% to 11%; and

(c)is generally useable in sanitary products such as facial tissue, paper towel, bathroom tissue and napkins; and

(d)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(e)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For the production of pulp from either or both of woodchips and sawdust as part of tissue paper manufacturing, the basis for the issue of free carbon units is by an air dried tonne (assuming a 10% moisture content) of equivalent pulp that is:

(a)produced from either or both of woodchips and sawdust; and

(b)used in the process of manufacturing tissue paper; and

(c)produced as part of carrying on the emissions-intensive trade-exposed activity.

(6)For this Part, an amount of pulp or paper that is used as a basis for the issue of free carbon units for one of the following emissions-intensive trade-exposed activities:

(a)the manufacture of newsprint;

(b)dry pulp manufacturing;

(c)cartonboard manufacturing;

(d)packaging and industrial paper manufacturing;

(e)printing and writing paper manufacturing;

(f)tissue paper manufacturing;

does not count for the purposes of the basis for allocation of another of those emissions-intensive trade-exposed activities.

Division 20Integrated iron and steel manufacturing

Note Carbon steel, relevant product and saleable quality are explained in Part 2.

(1) Integrated iron and steel manufacturing is the chemical and physical transformation of iron ore into crude carbon steel products and hot-rolled carbon steel products involving all of the following processes:

(a)the chemical and physical transformation of iron ore into agglomerated iron ore, such as iron ore sinter or iron ore pellets;

(b)the carbonisation of coal (principally coking coal) into coke oven coke;

(c)the chemical and physical transformation of either or both of limestone and dolomite, into lime (including burnt lime and burnt dolomite);

(d)the chemical and physical transformation of iron ore feed, including agglomerated iron ore, into molten iron which includes the reduction of oxides of iron using carbon as the predominant reducing agent;

(e)subject to subclause (3), the chemical and physical transformation of molten iron and cold ferrous feed, such as pig iron, flat iron and ferrous scrap, into one or more of the following:

(i)continuously cast carbon steel products;

(ii)ingots of carbon steel;

(iii)hot-rolled carbon steel products, which commenced hot-rolling at a temperature higher than 800 °C.

(2)Integrated iron and steel manufacturing may also include the physical transformation of continuously cast carbon steel products into hot-rolled carbon steel products which commence hot-rolling at a temperature higher than 800 °C if the continuously cast carbon steel products are produced at any other facility that conducts:

(a)the activity of integrated iron and steel manufacturing; or

(b)the activity of manufacture of carbon steel from cold ferrous feed.

(3)For paragraph (1) (e), the maximum percentage of cold ferrous feed transformed into one or more of the items in subparagraphs (1) (e) (i) to (iii) as a proportion of molten iron and cold ferrous feed, must not:

(a)for a facility that does not meet the criteria in subclause 705 (1) or (2) — be greater than 30% over the previous financial year for the facility; or

(b)for a facility that does meet the criteria in subclause 705 (1) or (2) — be likely to be greater than 30% over the financial year to which the application relates for the facility.

(4)Integrated iron and steel manufacturing is specified as an emissions-intensive trade-exposed activity.

(5)Integrated iron and steel manufacturing is a highly emissions‑intensive activity.

Note See Part 4.

(6)For the production of iron ore sinter, the basis for the issue of free carbon units is by a tonne of iron ore sinter on a dry weight basis that:

(a)meets the necessary requirements for use in the integrated iron and steel manufacturing process; and

(b)is produced as part of carrying on the emissions-intensive trade-exposed activity.

(7)For the production of iron ore pellets, the basis for the issue of free carbon units is by a tonne of iron ore pellets on a dry weight basis that:

(a)meets the necessary requirements for use in the integrated iron and steel manufacturing process; and

(b)is produced as part of carrying on the emissions-intensive trade-exposed activity; and

(c)is not a relevant product for the emissions-intensive trade‑exposed activity of production of iron ore pellets mentioned in Division 35.

(8)For the production of coke oven coke, the basis for the issue of free carbon units is by a tonne of coke oven coke on a dry weight basis that is produced as part of carrying on the emissions‑intensive trade-exposed activity.

(9)For the production of lime, the basis for the issue of free carbon units is by a tonne of lime on a dry weight basis that:

(a)meets the necessary requirements for use in the integrated iron and steel manufacturing process; and

(b)is produced as part of carrying on the emissions-intensive trade-exposed activity; and

(c)is not a relevant product for the emissions-intensive trade‑exposed activity of production of lime mentioned in Division 28.

For the production of either or both of continuously cast carbon steel products and ingots of carbon steel, the basis for the issue of free carbon units is by a tonne of either or both of continuously cast carbon steel products and ingots of carbon steel that:

(a)is produced as part of carrying on the emissions-intensive trade-exposed activity; and

(b)is not a relevant product for the emissions-intensive trade‑exposed activity of the manufacture of carbon steel from cold ferrous feed; and

(c)is of a saleable quality.

For the production of hot-rolled carbon steel products that are long products, the basis for the issue of free carbon units is by a tonne of long products of hot-rolled carbon steel that:

(a)is in coils or straight lengths; and

(b)is generally produced in rod, bar and structural (section) mills; and

(c)generally has a cross sectional shape such as I, T, Y, U, V, H, C, L, square, rectangular, round, flat, hexagonal, angle, channel, structural beam profile or rail profile; and

(d)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(e)is produced from continuously cast carbon steel products that satisfy the requirements mentioned in subclause (13); and

(f)is counted as a relevant product only once in relation to the carrying on of the emissions-intensive trade‑exposed activity of integrated iron and steel manufacturing; and

(g)is not a relevant product for the emissions-intensive trade‑exposed activity of the manufacture of carbon steel from cold ferrous feed; and

(h)is of saleable quality.

For the production of hot-rolled carbon steel products that are flat products, the basis for the issue of free carbon units is by a tonne of flat products of hot-rolled carbon steel that:

(a)is flat in profile, such as plate and hot rolled coil; and

(b)is generally produced in hot strip mills and plate mills; and

(c)is generally at least 600 mm wide; and

(d)is generally no thicker than 150 mm; and

(e)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(f)is produced from continuously cast carbon steel products that satisfy the requirements mentioned in subclause (13); and

(g)is counted as a relevant product only once in relation to the carrying on of the emissions-intensive trade‑exposed activity of integrated iron and steel manufacturing; and

(h)is not a relevant product for the emissions-intensive trade‑exposed activity of the manufacture of carbon steel from cold ferrous feed; and

(i)is of saleable quality.

For paragraphs (11) (e) and (12) (f), the continuously cast carbon steel products must be produced as part of carrying on:

(a)the emissions-intensive trade-exposed activity of integrated iron and steel manufacturing; or

(b)the emissions-intensive trade-exposed activity of manufacture of carbon steel from cold ferrous feed.

For this Division:

coke oven coke means the solid product obtained from the carbonisation of coal (principally coking coal) at a high temperature and includes coke breeze and foundry coke.

Division 21Manufacture of carbon steel from cold ferrous feed

Note Carbon steel, relevant product and saleable quality are explained in Part 2.

(1) The manufacture of carbon steel from cold ferrous feed is the physical and chemical transformation of cold ferrous feed (such as ferrous scrap, pig iron and flat iron) by heating and melting into liquid steel and the subsequent casting of the liquid steel to produce one or more of the following:

(a)continuously cast carbon steel products;

(b)ingots of carbon steel;

(c)hot-rolled carbon steel products, which commenced hot‑rolling at a temperature higher than 800 °C.

(2)The manufacture of carbon steel from cold ferrous feed may also include the physical transformation of continuously cast carbon steel products into hot-rolled carbon steel products which commenced hot-rolling at a temperature higher than 800 °C where the continuously cast carbon steel products are produced at any other facility that conducts:

(a)the activity of integrated iron and steel manufacturing; or

(b)the activity of manufacture of carbon steel from cold ferrous feed.

(3)The manufacture of carbon steel from cold ferrous feed is specified as an emissions-intensive trade-exposed activity.

(4)The manufacture of carbon steel from cold ferrous feed is a highly emissions-intensive activity.

Note See Part 4.

(5)For the production of either or both of continuously cast carbon steel products and ingots of carbon steel, the basis for the issue of free carbon units is by a tonne of either or both continuously cast carbon steel products and ingots of carbon steel that:

(a)is produced as part of carrying on the emissions-intensive trade-exposed activity; and

(b)is not a relevant product for the emissions-intensive trade‑exposed activity of integrated iron and steel manufacturing; and

(c)is of a saleable quality.

(6)For the production of hot-rolled carbon steel products that are long products, the basis for the issue of free carbon units is by a tonne of long products of hot-rolled carbon steel that:

(a)is in coils or straight lengths; and

(b)is generally produced in rod, bar and structural (section) mills; and

(c)generally have a cross sectional shape such as I, T, Y, U, V, H, C, L, square, rectangular, round, flat, hexagonal, angle, channel, structural beam profile or rail profile; and

(d)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(e)is produced from continuously cast carbon steel products that satisfy the requirements mentioned in subclause (8); and

(f)is counted as a relevant product only once in relation to the carrying on of the emissions-intensive trade‑exposed activity of manufacture of carbon steel from cold ferrous feed; and

(g)is not a relevant product for the emissions-intensive trade‑exposed activity of integrated iron and steel manufacturing; and

(h)is of saleable quality.

(7)For the production of hot-rolled carbon steel products which are flat products, the basis for the issue of free carbon units is by a tonne of flat products of hot-rolled carbon steel that:

(a)is flat in profile, such as plate and hot rolled coil; and

(b)is generally produced in hot strip and plate mills; and

(c)is generally at least 600 mm wide; and

(d)is generally no thicker than 150 mm; and

(e)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(f)is produced from continuously cast carbon steel products that satisfy the requirements mentioned in subclause (8); and

(g)is counted as a relevant product only once in relation to the carrying on of the emissions-intensive trade‑exposed activity of manufacture of carbon steel from cold ferrous feed; and

(h)is not a relevant product for the emissions-intensive trade‑exposed activity of integrated iron and steel manufacturing; and

(i)is of saleable quality.

(8)For paragraphs (6) (e) and (7) (f), the continuously cast carbon steel products must be produced as part of carrying on:

(a)the emissions-intensive trade-exposed activity of integrated iron and steel manufacturing; or

(b)the emissions-intensive trade-exposed activity of manufacture of carbon steel from cold ferrous feed.

Division 22Petroleum refining

Note Condensate, eligible petroleum feedstocks, stabilised crude petroleum oil and unleaded petrol are explained in Part 2.

(1) Petroleum refining is the chemical and physical transformation of stabilised crude petroleum oil, which may be supplemented with one or more of condensate, tallow, vegetable oil, eligible petroleum feedstocks or other petroleum feedstocks, to produce a range of refined petroleum products through the following processes:

(a)the distillation of stabilised crude petroleum oil, condensate, tallow, vegetable oil and other petroleum feedstocks;

(b)the adjustment of the molecular weight and structure of hydrocarbons (such as that which occurs through catalytic or hydro-cracking, steam or catalytic reforming, polymerisation, isomerisation or alkylation);

(c)the blending of products from distillation and adjustment of molecular weight and structure to produce Australian and international standard diesel, jet fuel and unleaded petrol;

(d)the production of 2 or more of the following refinery products saleable in Australian or international markets:

(i)hydrogen;

(ii)ethane;

(iii)propane;

(iv)refinery grade propylene;

(v)polymer grade propylene;

(vi)liquefied petroleum gas;

(vii)butane;

(viii)naphtha;

(ix)aviation gasoline;

(x)before oxygenate blend;

(xi)kerosene;

(xii)heating oil;

(xiii)solvents;

(xiv)lubricant base stocks;

(xv)leaded petrol;

(xvi)waxes;

(xvii)bitumen.

(2)Subject to subclause (3), the activity of petroleum refining will only take place in the financial year to which the application relates if both of the following apply:

(a)each of the processes mentioned in paragraphs (1) (a) to (d) are conducted within the financial year to which the application relates for the facility;

(b)the combined volume of diesel, jet fuel, unleaded petrol, lubricant base stocks and bitumen at 15 °C and 1 atmosphere produced from stabilised crude petroleum oil, condensate, tallow, vegetable oil and eligible petroleum feedstocks is:

(i)for a facility that does not meet the criteria in subclause 705 (1) or (2) — at least 75% of the total kilolitres of stabilised crude petroleum oil, condensate, tallow, vegetable oil and eligible petroleum feedstocks used within the previous financial year for the facility; or

(ii)for a facility that does meet the criteria specified in subclause 705 (1) or (2) — is likely to be at least 75% of the total kilolitres of stabilised crude petroleum oil, condensate, tallow, vegetable oil and eligible petroleum feedstocks likely to be used within the financial year to which the application relates for the facility.

(3)The processes mentioned in paragraphs (1) (a) to (d) are not required to be conducted for every product mentioned in paragraphs (1) (c) and (d) for the activity of petroleum refining to occur in the application year.

(4)Petroleum refining is specified as an emissions-intensive trade‑exposed activity.

(5)Petroleum refining is a highly emissions-intensive activity.

Note See Part 4.

(6)Subject to subclause (7), the basis for the issue of free carbon units for petroleum refining is by a kilolitre of:

(a)stabilised crude petroleum oil at 15 °C and 1 atmosphere; and

(b)condensate at 15 °C and 1 atmosphere; and

(c)tallow at 15 °C and 1 atmosphere; and

(d)vegetable oil at 15 °C and 1 atmosphere; and

(e)eligible petroleum feedstocks at 15 °C and 1 atmosphere.

(7)A substance mentioned in paragraphs (6) (a) to (e) may be used as the basis for working out the issue of free carbon units for subclause (6) if the substance is, or is to be, refined:

(a)by one or both of the processes mentioned in paragraphs (1) (a) and (b); and

(b) into either of the following:

(i)one or more petroleum products mentioned in paragraphs (1) (c) and (d);

(ii)other by-products which result from carrying on the emissions-intensive trade-exposed activity; and

(c)in the financial year:

(i)that applies, for the purpose of subclause 907 (7), to the application made under clause 701; and

(ii)in which the combined volume of diesel, jet fuel, unleaded petrol, lubricant base stocks and bitumen, at 15 °C and 1 atmosphere, produced from substances mentioned in paragraphs (6) (a) to (e) is:

(A)for new or expected additional production — likely to be at least 75% of the total kilolitres of those substances likely to be used in the financial year to which the application relates; or

(B)for production that is not new or expected additional production — at least 75% of the total kilolitres of those substances used in the previous financial year.

Division 23Production of ethene (ethylene)

(1) The production of ethene (ethylene) is the chemical transformation of hydrocarbons to produce ethene (ethylene (C₂H₄)) that has a concentration of ethene (ethylene (C₂H₄)) of at least 99%.

(2)The production of ethene (ethylene) is specified as an emissions-intensive trade-exposed activity.

(3)The production of ethene (ethylene) is a highly emissions‑intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units for the production of ethene (ethylene) is by a tonne of 100% equivalent ethene (ethylene (C₂H₄)) that is contained within ethene that:

(a)has a concentration of ethene (ethylene (C₂H₄)) of at least 99%; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

Division 24Production of polyethylene

(1) The production of polyethylene is the chemical transformation of ethene (ethylene (C₂H₄)) to produce polyethylene with a standard density of at least 0.910 g/cm³.

(2)The production of polyethylene is specified as an emissions‑intensive trade-exposed activity.

(3)The production of polyethylene is a moderately emissions‑intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units for the production of polyethylene is by a tonne of pelletised polyethylene that:

(a)has a standard density of at least 0.910 g/cm³; and

(b)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(c)is of saleable quality.

Note Saleable quality is explained in Part 2.

(5)For this Division:

standard density, for polyethylene, means the density of polyethylene moulded to a thickness of 1.9 mm using Procedure C of Annex A1 to ASTM D4703 Standard Practice for Compressions Moulding Thermoplastic Materials into Test Specimens, Plaques or Sheets, as in force from time to time.

Division 25Production of synthetic rutile

(1) The production of synthetic rutile is the chemical transformation of ilmenite ore (ore containing FeTiO₃) through the reduction of iron oxides in order to increase the titanium dioxide (TiO₂) concentration to produce synthetic rutile that:

(a)has a titanium dioxide (TiO₂) concentration of at least 88% but less than 95.5%; and

(b)has an iron (Fe) concentration greater than 0.5%.

(2)The production of synthetic rutile is specified as an emissions‑intensive trade-exposed activity.

(3)The production of synthetic rutile is a highly emissions‑intensive activity.

Note See Part 4.

(4)The basis for the issue of free carbon units for the production of synthetic rutile is by a tonne of synthetic rutile that:

(a)has a titanium dioxide (TiO₂) concentration of at least 88% but less than 95.5%; and

(b)has an iron (Fe) concentration greater than 0.5%; and

(c)is produced by carrying on the emissions-intensive trade‑exposed activity; and

(d)is not a relevant product for the emissions-intensive trade‑exposed activity of production of white titanium dioxide (TiO₂) pigment; and

(e)is of saleable quality.

Note Relevant product and saleable quality are explained in Part 2.

Division 26Production of manganese

Note Saleable quality is explained in Part 2.

(1) The production of manganese is any of the following:

(a)the physical and chemical transformation of manganese (Mn) ore into manganese sinter (Mn₃O₄) that has a concentration of manganese of at least 40%;

(b)the physical and chemical transformation of either or both of manganese ore and manganese sinter into either or both of the following:

(i)ferromanganese alloy that has a concentration of manganese of at least 67%;

(ii)silicomanganese alloy that has a concentration of:

(A)manganese of at least 60%; and

(B)silicon (Si) of at least 12%.

where:

A is the amount of electricity consumed from the operation of the facilities other than any electricity to which paragraph (c) applies; and

B is the amount of electricity produced by electricity generators that are part of the facilities;

(e) any emissions associated with the production of steam imported from another facility for the operation of the new facility or series of new facilities.

(3) The number of carbon units that are required to be issued in accordance with this Part in respect of the current application is reduced (the maximum cap adjustment) by the difference identified in paragraph (1) (c).

(4) The number of carbon units worked out under subclause (3) is to be adjusted by:

(a) for the financial year starting on 1 July 2013 — multiplying the number by $23.00, dividing the result by $24.15 and multiplying that number by (1+r); and

(b) for the financial year starting on 1 July 2014 — multiplying the number by $24.15, dividing the result by $25.40 and multiplying that number by (1+r); and

(c) for the financial year starting on 1 July 2015 — multiplying the number by $25.40 and dividing the result by the benchmark average auction charge for the financial year starting on 1 July 2014.

Note r is explained in Part 2.

(5) To avoid doubt, an allocation of free carbon units made in respect of the current application must take into account any other allocation of units approved, or for which an event mentioned in subclause 1305 (2) occurred, in the application year for an emissions-intensive trade-exposed activity conducted at the new facility or series of new facilities.

Division 7 Sub-threshold emissions adjustments

912 (1) The sub-threshold emissions adjustment is the adjustment made to allocations of free carbon units as a result of a facility not passing the threshold test in sections 20 to 25 of the Act.

(2) If subclause (3) applies, an applicant may choose to use method 1 (set out in subclauses (4) to (7)) to work out the sub‑threshold emissions adjustment or may choose to apply method 2 (set out in subclause (8)).

(3) For a facility:

(a) method 1 applies if:

(i) a facility involves carrying on one or more activities identified in Part 3; and

(ii) either:

(A) an application was approved for free carbon units in relation to the carrying on of the same activities at the same facilities or series of facilities in the financial year before the financial year to which the current application relates; or

(B) an event mentioned in subclause 1305 (2) occurred in relation to the carrying on of the same activities at the same facilities or series of facilities in the financial year before the financial year to which the current application relates; and

(iii) the facility does not pass the threshold test under sections 20 to 25 of the Act; and

(iv) the person mentioned in those sections in relation to the facility does not have a provisional emissions number; and

(b) method 2 applies if:

(i) a facility involves carrying on one or more activities identified in Part 3; and

(ii) the facility does not pass the threshold test under sections 20 to 25 of the Act; and

(iii) the person mentioned in those sections in relation to the facility does not have a provisional emissions number.

Method 1

(4) For each of the facilities mentioned in subclause (3), work out the result using the formula:

CE^a_t-1 – NG^a_t-1

where:

CE^a_t is the total covered emissions from the operation of the facility in the financial year to which the application relates.

NG^a_t is the emissions from the combustion of natural gas from the facility in the financial year to which the application relates.

Note An applicant may be required to report emissions under clause 708.

(5) The number of carbon units that are required to be issued in accordance with method 1 in relation to the current application is reduced by the sub-threshold emissions adjustment worked out by adding together the result for each facility under subclause (4) that relates to the application.

(6) The number of carbon units worked out under subclause (5) is to be adjusted by:

(a) for the financial year starting on 1 July 2013 — multiplying the number by $23.00, dividing the result by $24.15 and multiplying that number by (1+r); and

(b) for the financial year starting on 1 July 2014 — multiplying the number by $24.15, dividing the result by $25.40 and multiplying that number by (1+r); and

(c) for the financial year starting on 1 July 2015 — multiplying the number by $25.40 and dividing the result by the benchmark average auction charge for the financial year starting on 1 July 2014.

Note r is explained in Part 2.

(7) However, if:

(a) an application is made in relation to a facility for a financial year; and

(b) the number of units allocated in relation to the application is adjusted in accordance with this clause; and

(c) another application (the subsequent application) is made in relation to the facility for the financial year;

the sub-threshold emissions adjustment is taken to be zero for the subsequent application.

Method 2

(8) For an application:

(a) EI^a_t, mentioned in subclause 907 (5), is taken to be zero; and

(b) the sub-threshold emissions adjustment is zero.

If not a facility mentioned in subclause (3)

(9) If the facility is not a facility mentioned in subclause (3), the sub-threshold emissions adjustment is zero.

Division 8 Adjustments relating to Joint Petroleum Development Area and Greater Sunrise unit area

913 (1) This Division applies if an emissions-intensive trade-exposed activity was carried on wholly or partly at a facility in the financial year before the financial year to which the application relates (the previous financial year) and, during a period that is included in, or consists of, the previous financial year, the facility is located in:

(a) the Joint Petroleum Development Area; or

(b) the Greater Sunrise unit area.

(2) The Regulator must reduce the baseline allocation worked out under clause 906 by the amount of emissions from carrying out the emissions-intensive trade-exposed activity that are not included in the facility’s provisional emissions number under section 26, 27 or 28 of the Act.

Part 10 Year to which units apply

Division 1 Application in first year of the program

1001 (1) If:

(a) an application is made before the end of 31 October 2012 (or a later time in accordance with clause 702) in relation to the financial year starting on 1 July 2012; and

(b) the Regulator is required to issue free carbon units;

the free carbon units have a vintage year of that financial year.

(2) However, if the Regulator does not, before 31 January 2014, issue free carbon units in relation to an application in respect of the financial year starting on 1 July 2012, the free carbon units have a vintage year of the financial year in which they are issued.

(3) If subclause (2) applies, the free carbon units amount is to be adjusted by multiplying the amount by $23.00, dividing the result by $24.15 and multiplying that number by (1+r).

Note r is explained in Part 2.

Division 2 Application in second year of the program

1002 (1) If:

(a) an application is made before the end of 31 October 2013 (or a later time in accordance with clause 702) in relation to the financial year starting on 1 July 2013; and

(b) the Regulator is required to issue free carbon units;

the free carbon units have a vintage year of that financial year.

(2) However, if the Regulator does not, before 31 January 2015, issue free carbon units in relation to an application in respect of the financial year starting on 1 July 2013, the free carbon units have a vintage year of the financial year in which they are issued.

(3) If subclause (2) applies, the free carbon units amount is to be adjusted by multiplying the number by $24.15, dividing the result by $25.40 and multiplying that number by (1+r).

Note r is explained in Part 2.

Division 3 Application in third year of the program

1003 (1) If:

(a) an application is made before the end of 31 October 2014 (or a later time in accordance with clause 702) in relation to the financial year starting on 1 July 2014; and

(b) the Regulator is required to issue free carbon units;

the free carbon units have a vintage year of that financial year.

(2) However, if the Regulator does not, before 31 January 2016, issue free carbon units in relation to an application in respect of the financial year starting on 1 July 2014, the free carbon units have a vintage year of the financial year in which they are issued.

(3) If subclause (2) applies, the free carbon units amount is to be adjusted by:

(a) multiplying the amount by $25.40; and

(b) dividing the result by the benchmark average auction charge for the financial year starting on 1 July 2014.

Division 4 Application in subsequent years

1004 (1) If:

(a) an application is made before the end of 31 October (or a later time in accordance with clause 702) in relation to a financial year (the application year) that is a flexible charge year; and

(b) the Regulator is required to issue free carbon units;

the free carbon units that are issued have a vintage year of the application year.

(2) However, if the Regulator does not, before 1 December in the financial year after the application year, issue free carbon units, the free carbon units have a vintage year of the financial year in which they are issued.

Part 11 Keeping records and materials

1101 (1) A person issued free carbon units must keep the following records for 5 years from when the record is made:

(a) a copy of each application the person made to the Regulator for the issue of those free carbon units;

(b) the documents and materials relied on by the person to prepare the application;

(c) the testing and measurement results relied on by the person to ensure that the requirements for the relevant product were satisfied;

(d) records showing the production of the amount or volume of the relevant product in each financial year for which the free carbon units were issued.

(2) The documents and materials:

(a) must not be reproductions of any original documents; and

(b) must be kept in hard copy; and

(c) must be materials that were relied on by the applicant.

(3) However, if a person tells the Regulator that a record has been lost or destroyed during the period records must be kept, the Regulator may treat a complete copy of the record as the original from the time of the loss or destruction.

(4) This clause does not apply if:

(a) the Regulator has notified the person that the retention of the records is not required; or

(b) the person is a company that has gone into liquidation and been finally dissolved.

Part 12 Reporting requirements

1201 If free carbon units have been issued in relation to an emissions-intensive trade-exposed activity at a facility or series of facilities, the person to which the free carbon units were issued (the recipient) must give the Regulator the reports set out in this Part.

1202 If an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware that the recipient will no longer be an eligible person in relation to one or more facilities that carry on an emissions-intensive trade-exposed activity on the next 30 June, the recipient must give the Regulator a report stating who is likely to be an eligible person in relation to the facilities on that date.

1203 If an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware that:

(a) a decision has been taken to stop the production of one or more relevant products at a facility or series of facilities, indefinitely or for more than 12 months, while the Regulator is considering an application in relation to the production of those relevant products; and

(b) a requirement relating to the closure of equipment is reasonably likely to occur within 6 months;

the recipient must give the Regulator a report of when the requirement is likely to occur.

1204 If an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware that a requirement relating to the closure of equipment has occurred, the recipient must give the Regulator a report of when the requirement occurred.

1205 If an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware that a circumstance mentioned in clause 910 exists, the recipient must give the Regulator a report of when the circumstance came into existence.

1206 (1) If:

(a) an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware, during:

(i) the financial year for which the free carbon units have been issued (the first financial year); or

(ii) the following financial year;

that no application for free carbon units will be made in respect of the facility for the following financial year; and

(b) the requirement under clause 1304 for the recipient to relinquish carbon units has not been imposed in the first financial year;

the recipient must give the Regulator a report containing the information in subclause (3).

(2) If:

(a) an executive officer of the recipient (or, if the recipient is not a body corporate, a person with an equivalent function) becomes aware, during:

(i) the financial year for which the free carbon units have been issued (the first financial year); or

(ii) the following financial year;

that an application by the recipient for the issue of free carbon units would, if it were made, be refused because the Regulator would not be satisfied as to the matter mentioned in paragraph 804 (3) (f); and

(b) the requirement under clause 1304 for the recipient to relinquish carbon units has not been imposed in the first financial year;

the recipient must give the Regulator a report containing the information in subclause (3).

(3) The recipient’s report must contain the following:

(a) the amount of production of all relevant products for the facility during the first financial year; and

(b) the information required to be given to the Regulator under subclause 603 (1); and

(c) for a new facility or series of new facilities — the calculations relating to the amounts mentioned in paragraphs 911 (2) (c), (d) and (e) for the first financial year; and

(d) for a sub-threshold facility to which clause 708 applies — the scope 1 emissions, by source, from the operation of the facility for the first financial year.

1207 (1) The recipient must give the report under clauses 1202, 1204 and 1205 within 30 days after the executive officer or other person becomes aware of the matter.

(2) The recipient must give the report under clause 1203 within the later of:

(a) 30 days after the executive officer or other person becomes aware of the matter; and

(b) 5 months before the requirement relating to the closure of equipment is reasonably likely to occur.

(3) The recipient must give the report under clause 1206 within:

(a) if equipment is taken to have been closed — 90 days after the closure occurred; and

(b) in any other case — 90 days after the end of the first financial year.

Part 13 Relinquishment of carbon units

Division 1 General

1301 A person is required to relinquish a number of carbon units if:

(a) a number of free carbon units have been issued to the person for a financial year in accordance with this program; and

(b) either:

(i) an event described in this Part occurs during that financial year; or

(ii) a circumstance described in this Part comes into existence during that financial year.

Division 2 Closure of equipment

Subdivision 1 Closure

1302 An event is that equipment used to carry on an emissions‑intensive trade-exposed activity is closed.

1303 (1) If the equipment mentioned in clause 1302 is closed and the requirement to relinquish carbon units under clause 1304 has taken effect, the number of free carbon units that must be relinquished is worked out in accordance with this clause.

(2) Identify the total of:

(a) the amount or volume of the relevant product that was:

(i) produced using the equipment in the financial year (the first financial year) before the financial year in which the requirement to relinquish carbon units under clause 1304 took effect; and

(ii) used in respect of an application for the issue of free carbon units under this program for the financial year in which the requirement to relinquish carbon units under clause 1304 took effect; and

(b) the amount or volume of the relevant product that was:

(i) treated as expected additional production in accordance with subclause 907 (7); and

(ii) to be produced using the equipment in the financial year in which the requirement to relinquish carbon units under clause 1304 took effect.

(3) For each relevant product mentioned in subclause (2), identify the amount or volume of the relevant product that was, or is likely to be, produced using the equipment in the financial year in which the requirement to relinquish carbon units under clause 1304 took effect.

(4) Work out the difference between the 2 amounts worked out under subclause (2) and (3) (the unused balance).

(5) Work out the number of free carbon units that would have been issued for the current financial year on the basis of the unused balance and then subtract the number of carbon units that were not issued to a person in respect of the equipment because of subclause 902 (8).

(6) The result is the number of carbon units that must be relinquished.

(7) However, if the number mentioned in subclause (6) is greater than the total number of units issued to the person for the activity in the financial year in which the requirement to relinquish carbon units under clause 1304 took effect, the number of carbon units that must be relinquished is the total number of units.

Subdivision 2 Procedure for relinquishment on closure

1304 (1) If:

(a) equipment is closed; and

(b) at that time, the person carrying out the activity considered that it was unlikely that the equipment would be used again to produce the relevant product within 1 year after the equipment was closed;

the person’s requirement to relinquish the relevant number of carbon units takes effect from that time.

(2) If:

(a) equipment is closed; and

(b) at that time, it was not possible for the person carrying out the activity to determine whether the equipment would be used again to produce the relevant product that is identified in Part 3 as the basis for the issue of free carbon units within 1 year after the equipment was closed; and

(c) the person carrying out the activity determined, within 1 year after the equipment was closed, that it was unlikely that the equipment would be used again to produce the relevant product within that period of 1 year;

the person’s requirement to relinquish the relevant number of carbon units takes effect from the time of the determination in paragraph (c).

(3) If:

(a) equipment is closed; and

(b) at that time, it was not possible for the person carrying out the activity to determine whether the equipment would be used again to produce the relevant product that is identified in Part 3 as the basis for the issue of free carbon units within 1 year after the equipment was closed; and

(c) the equipment was not used again to produce the relevant product within that period of 1 year;

the person’s requirement to relinquish the relevant number of carbon units takes effect from the end of that period of 1 year.

(4) If the Regulator is satisfied that the person is required to relinquish carbon units, it must issue a notice to the person setting out:

(a) the basis on which it is satisfied; and

(b) the number of carbon units that it considers must be relinquished in accordance with clause 1303.

(5) However, the Regulator must not issue a notice more than 3 years after the requirement to relinquish the relevant number of carbon units took effect.

(6) The person must relinquish the relevant number of carbon units not more than 90 days after the day on which the Regulator gives the notice.

Division 3 Negative allocation

1305 (1) An event is that:

(a) a person has given the Regulator a report mentioned in subclause 1206 (1); and

(b) clause 1304 does not apply to the person in a financial year for which free carbon units have been issued in respect of an emissions-intensive trade-exposed activity at a facility; and

(c) if the person made an application for the issue of free carbon units in respect of the facility, the sum of:

(i) the previous year adjustment under subclause 907 (15); and

(ii) the maximum cap adjustment under clause 911; and

(iii) the sub-threshold adjustment under clause 912;

would result in a negative number of carbon units being issued to the person.

(2) An event is that:

(a) a person has given the Regulator a report mentioned in subclause 1206 (2); and

(b) clause 1304 does not apply to the person in a financial year for which free carbon units have been issued in respect of an emissions-intensive trade-exposed activity at a facility; and

(c) if the person made an application for the issue of free carbon units in respect of the facility, the application would be refused because the Regulator would not be satisfied as to the matter mentioned in paragraph 804 (3) (f); and

(d) the application of the formula in Part 9 would result in a negative number of carbon units being issued to the person.

(3) An event is that:

(a) a person has not given the Regulator a report mentioned in subclause 1206 (1) or (2); and

(b) clause 1304 does not apply to the person in a financial year for which free carbon units have been issued in respect of an emissions-intensive trade-exposed activity at a facility; and

(c) the person applied for the issue of free carbon units in respect of an emissions-intensive trade-exposed activity at a facility; and

(d) the application is refused because the Regulator is not satisfied that the application complies with paragraph 804 (3) (f); and

(e) the application of the formula in Part 9 would result in a negative number of carbon units being issued to the person.

1306 (1) If subclause 1305 (1) applies, the number of free carbon units that must be relinquished is the negative number mentioned in paragraph 1305 (1) (c).

(2) If subclause 1305 (2) applies, the number of free carbon units that must be relinquished is the negative number mentioned in paragraph 1305 (2) (d).

(3) If subclause 1305 (3) applies, the number of free carbon units that must be relinquished is the negative number mentioned in paragraph 1305 (3) (e).

(4) If the Regulator is satisfied that the person is required to relinquish carbon units, it must issue a notice to the person setting out:

(a) the basis on which it is satisfied; and

(b) the number of carbon units that it considers must be relinquished in accordance with subclause 1305 (1), (2) or (3).

(5) However, the Regulator must not issue a notice more than 3 years after the requirement to relinquish the relevant number of carbon units took effect.

(6) The person must relinquish the relevant number of carbon units not more than 90 days after the day on which the Regulator gives the notice.

Division 4 Inaccurate allocation of free carbon units

1307 (1) If, under clause 807, the Regulator is required to issue a notice to a person to relinquish a specified number of free carbon units because the initial allocation to the person was incorrect, the Regulator must issue the notice in accordance with this clause.

(2) The Regulator must issue a notice to the person setting out:

(a) the basis on which the Regulator is satisfied that the units are to be relinquished; and

(b) the number of carbon units that the Regulator considers must be relinquished in accordance with clause 807.

(3) The person must relinquish the relevant number of carbon units not more than 90 days after the day on which the Regulator gives the notice.

Part 14 Incidental provisions

1401 (1) The Regulator may, in writing, issue guidelines about any of the following matters:

(a) the way in which the production of the relevant product may be measured;

(b) an appropriate frequency of testing or sampling of the product;

(c) the considerations that the Regulator will take into account in determining whether or not the production of the product has met one or more requirements of this program.

(2) A guideline is not binding on an applicant.

(3) The Regulator must have regard to the following matters for the purpose of making the guidelines:

(a) any relevant requirements imposed by or under the National Measurement Act 1960;

(b) the way in which the relevant product is measured in the industry;

(c) any way in which:

(i) the product was measured for the purpose of determining the content of this program; and

(ii) the measurements were reported to the Department in 2009 for that purpose;

(d) whether the frequency of measuring the amount or volume of relevant product enables the production of representative and unbiased data;

(e) any accredited industry test methods for the product;

(f) the risk that production by the facility will not satisfy the relevant qualities of the relevant product;

(g) the administrative costs of implementing more accurate testing methods at a facility.

(4) The Regulator must consult as it considers appropriate before making or amending the guidelines.

(5) The Regulator must publish proposed guidelines, and proposed amendments of the guidelines:

(a) on the Regulator’s website; and

(b) in any other place the Regulator considers appropriate.

Note

All legislative instruments and compilations are registered on the Federal Register of Legislative Instruments kept under the Legislative Instruments Act 2003. See

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Clean Energy Amendment Regulation 2012 (No. 1) (Cth)

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Item	Decision under the Jobs and Competitiveness Program in Schedule 1
1	A decision under paragraph 803 (2) (b) of the program to refuse an application
2	A decision under paragraph 803 (8) (a) of the program to consider an application on the basis of substituting an amount or volume
3	A decision under paragraph 803 (8) (c) of the program to refuse to consider an application
4	A decision under paragraph 804 (1) (b) of the program to refuse an application for the issue of free carbon units
5	A decision under subclause 902 (7) of the program to reduce the number of free carbon units to be issued by the number of carbon units that would be likely to be required to be relinquished in accordance with Part 13 of the program
6	A decision under subclause 910 (1) of the program to amend a large user certificate
7	A decision under clause 911 of the program to reduce the number of carbon units allocated
8	A decision under subclause 1304 (4) of the program to issue a relinquishment notice
9	A decision under subclause 1306 (4) of the program to issue a relinquishment notice