Clean Energy Regulations 2011 (Cth)
| Clean Energy Regulations 2011 Select Legislative Instrument No. 221, 2011 made under the Clean Energy Act 2011 Compilation No. 15 Compilation date: 29 November 2014 Includes amendments up to: SLI No. 179, 2014 Registered: 10 December 2014 About this compilation This compilation This is a compilation of the Clean Energy Regulations 2011 that shows the text of the law as amended and in force on 29 November 2014 (the compilation date). This compilation was prepared on 9 December 2014. The notes at the end of this compilation (the endnotes) include information about amending laws and the amendment history of provisions of the compiled law. Uncommenced amendments The effect of uncommenced amendments is not shown in the text of the compiled law. Any uncommenced amendments affecting the law are accessible on ComLaw ( The details of amendments made up to, but not commenced at, the compilation date are underlined in the endnotes. For more information on any uncommenced amendments, see the series page on ComLaw for the compiled law. Application, saving and transitional provisions for provisions and amendments If the operation of a provision or amendment of the compiled law is affected by an application, saving or transitional provision that is not included in this compilation, details are included in the endnotes. Modifications If the compiled law is modified by another law, the compiled law operates as modified but the modification does not amend the text of the law. Accordingly, this compilation does not show the text of the compiled law as modified. For more information on any modifications, see the series page on ComLaw for the compiled law. Self‑repealing provisions If a provision of the compiled law has been repealed in accordance with a provision of the law, details are included in the endnotes. Contents Part 1—Preliminary 1 1.1......... Name of Regulations........................................................................... 1 1.2......... Commencement................................................................................... 1 1.3......... Definitions—general........................................................................... 1 1.4......... Definition—applicable identification procedure.................................. 4 1.5......... Definition—fugitive emissions........................................................... 5 1.8......... Definition—natural gas supply pipelines............................................ 5 1.9......... Definition—withdrawal...................................................................... 6 1.10....... When supply of natural gas occurs..................................................... 7 1.11....... Electronic notice transmitted to the Regulator...................................... 7 1.12....... Requirements for documents............................................................... 7 1.13....... English translation of documents........................................................ 8 1.14....... When documents need not be given.................................................... 8 Part 3—Liable entities 9 Division 1—Direct emitters of greenhouse gases 9 3.1......... Prescribed class of waste.................................................................... 9 3.2......... Prescribed distance for landfill facilities.............................................. 9 3.3......... Adjustment of provisional emissions number—Joint Petroleum Development Area and Greater Sunrise unit area............................................................................................................ 9 Division 3—Natural gas 10 3.5......... Netted‑out numbers for OTN holders—transfer of gases between storage areas 10 3.5A...... Netted‑out numbers for OTN holders—use of natural gas without combustion 10 3.5C...... Application of natural gas to own use............................................... 11 Division 3A—Liquefied petroleum gas, and liquefied natural gas, for non‑transport use 13 3.5F....... Amount exempt from preliminary emissions number....................... 13 3.5G...... Netted‑out numbers—import of LPG or LNG for non‑transport use 13 3.5H...... Netted‑out numbers—manufacture or production of LPG or LNG for non‑transport use 15 3.5J....... Netted‑out numbers—supply of LPG or LNG to a person who quotes the person’s OTN 16 Division 4—Obligation Transfer Numbers 18 Subdivision 4.1—Requirements for application for OTN 18 3.6......... Application for OTN......................................................................... 18 3.7......... Eligibility information for large gas consuming facility..................... 19 3.8......... Eligibility information for feedstock.................................................. 21 3.9......... Eligibility information for manufacture of CNG, LNG or LPG........ 22 3.10....... Eligibility information for location where natural gas to be used....... 24 3.10A.... Eligibility information for mandatory quotation of OTN for supply of LPG or LNG 25 3.10B.... Eligibility information for voluntary quotation of OTN for supply of LPG or LNG 27 Subdivision 4.2—Large gas consuming facilities 29 3.11....... Conditions for ceasing to be large gas consuming facility................. 29 3.12....... One‑off year—application................................................................. 30 3.13....... One‑off year—Regulator’s decision................................................. 31 3.14....... Diminishing emissions—application................................................. 32 3.15....... Diminishing emissions—notification of OTN holder....................... 34 3.16....... Diminishing emissions—Regulator’s decision................................. 34 3.17....... Request for further information or documents.................................. 35 3.18....... When facility taken to cease to be large gas consuming facility......... 35 Subdivision 4.3—Large user of natural gas—application to be an approved person 36 3.19....... Information and documents required with application....................... 36 Subdivision 4.4—Conditions for OTN quotation and acceptance of OTN quotation: supply of LPG or LNG 38 3.19A.... Condition for mandatory quotation of OTN—large LPG or LNG consuming facility 38 3.19B.... Application to be taken not to be large LPG or LNG consuming facility—one‑off year 39 3.19C.... Decision on application made under regulation 3.19B...................... 40 3.19D.... Application to cease being large LPG or LNG consuming facility—diminishing emissions 41 3.19E..... Decision on application made under regulation 3.19D...................... 42 3.19F..... Conditions for voluntary quotation of OTN...................................... 43 3.19G.... Approved recipient for voluntary quotation of OTN......................... 43 3.19H.... Request for further information......................................................... 45 3.19J..... Conditions for acceptance of quotation of OTN in relation to supply of LPG or LNG 46 Division 5—Designated joint ventures 47 3.20....... Application for declaration................................................................ 47 3.21....... Making of declaration....................................................................... 48 3.22....... Application for participating percentage determination...................... 48 Division 6—Liability transfer certificates 51 3.23....... Application for liability transfer certificate—transfer of liability to another member of a corporate group 51 3.24....... Application for liability transfer certificate—transfer of liability to a person who has financial control of a facility 52 3.25....... Issue of liability transfer certificate.................................................... 53 Division 7—Opt‑in Scheme 55 Subdivision 7.1—Preliminary 55 3.29....... Opt‑in Scheme.................................................................................. 55 3.30....... Definitions........................................................................................ 55 3.31....... When an entity is entitled to a fuel tax credit..................................... 56 3.32....... Eligibility test.................................................................................... 56 3.33....... Specified taxable fuel........................................................................ 57 3.34....... Threshold test.................................................................................... 58 Subdivision 7.2—Application for designated opt‑in person 59 3.35....... Who may apply to be designated opt‑in person................................. 59 3.36....... Application for designated opt‑in person.......................................... 60 Subdivision 7.3—Declaration of designated opt‑in person 61 3.37....... Declared person is designated opt‑in person..................................... 61 3.38....... Applications not considered.............................................................. 63 3.39....... Request for further information or documents.................................. 64 3.40....... Timeframes for declaration to be made.............................................. 64 Subdivision 7.4—Variation to declaration of designated opt‑in person 64 3.41....... Application to vary declaration in relation to opt‑in amount.............. 64 3.42....... Variation to declaration..................................................................... 65 Subdivision 7.5—Designated opt‑in person as liable entity 66 3.43....... Liability for emissions....................................................................... 66 3.44....... Reduction of provisional emissions number..................................... 67 3.45....... Opting out of Scheme....................................................................... 67 3.46....... Request for further information or documents for decision to opt‑out of Scheme 69 3.47....... Consent to be liable entity................................................................. 69 Subdivision 7.6—Notification, reporting and record keeping requirements 72 3.48....... Reporting requirement....................................................................... 72 3.49....... Record keeping requirement.............................................................. 72 3.50....... Notification of changes requirement.................................................. 73 Part 4—Carbon units 75 Division 3—Property in, and transfer of, carbon units 75 4.5......... Transmission of carbon units by operation of law etc....................... 75 Division 5—Special provisions relating to free carbon units 77 4.10....... Buy‑back of certain free carbon units—specified factor.................... 77 4.11....... Buy‑back of certain free carbon units—day for cancellation and entry removal 78 Part 6—Surrender of eligible emissions units 79 6.1A...... How eligible international emissions units are surrendered............... 79 6.1......... Surrender restrictions........................................................................ 79 Part 7—Jobs and Competitiveness Program 82 Division 2—Formulation of the Jobs and Competitiveness Program 82 7.1......... Jobs and Competitiveness Program.................................................. 82 Part 8—Coal‑fired electricity generation 83 Division 1—Introduction 83 8.1......... Definitions for Part 8........................................................................ 83 Division 2—Certificate of eligibility for coal‑fired generation assistance 84 Subdivision 2.1—Information that must accompany application for certificate of eligibility for coal‑fired generation assistance 84 8.2......... Information to accompany applications............................................. 84 8.3......... Information for all applications......................................................... 84 8.4......... Additional information—registered generation complex................... 87 8.5......... Additional information—National Greenhouse and Energy Reporting Scheme 88 8.6......... Additional information—result of audit report.................................. 88 Subdivision 2.2—Documents that must accompany application for certificate of eligibility for coal‑fired generation assistance 89 8.7......... Documents that must accompany applications.................................. 89 8.8......... Documents for all applications.......................................................... 89 8.9......... Additional documents—National Greenhouse and Energy Reporting Scheme 90 Subdivision 2.3—Reports that must accompany application for certificate of eligibility for coal‑fired generation assistance 91 8.10....... Audit report for all applications......................................................... 91 Part 14—Record‑keeping requirements 92 14.1....... Record keeping—applications........................................................... 92 14.1A.... Record keeping—notice of intention to quote OTN.......................... 93 14.2....... Record keeping—withdrawal of quotation of OTN.......................... 93 14.3....... Record keeping—acceptance of quotation of OTN........................... 94 14.4....... Record keeping—statutory declaration for exempt supply................ 94 14.5....... Record keeping—true‑up shortfalls.................................................. 95 Part 21—Review of decisions 96 21.1A.... Reviewable decisions—Opt‑in Scheme............................................ 96 21.1B.... Reviewable decisions—auctioning of carbon units........................... 96 21.1....... Reviewable decisions—Jobs and Competitiveness Program............ 96 Part 23—Miscellaneous 98 23.1....... Set‑off............................................................................................... 98 Part 24—Application and transitional provisions 99 24.1....... Amendments made by the Clean Energy Legislation Amendment (2014 Measures No. 1) Regulation 2014 99 Schedule 1—Jobs and Competitiveness Program 100 Part 1—Preliminary 100 Part 2—Definitions and related concepts 101 Division 1—Definitions 101 Division 2—Meaning of saleable quality 108 Division 3—Meaning of significant expansion 109 Division 4—Meaning of closed 110 Division 5—Meaning of new facility and series of new facilities 111 Part 3—Emissions‑intensive trade‑exposed activities 113 Division 1—General 113 Division 2—Production of glass containers 114 Division 3—Production of bulk flat glass 115 Division 4—Production of methanol 116 Division 5—Production of carbon black 117 Division 6—Production of white titanium dioxide (TiO2) pigment 118 Division 7—Production of silicon 119 Division 8—Smelting zinc 120 Division 9—Integrated production of lead and zinc 121 Division 10—Aluminium smelting 123 Division 11—Alumina refining 124 Division 12—Production of high purity ethanol 125 Division 13—Production of magnesia 126 Division 14—Manufacture of newsprint 128 Division 15—Dry pulp manufacturing 130 Division 16—Cartonboard manufacturing 132 Division 17—Packaging and industrial paper manufacturing 134 Division 18—Printing and writing paper manufacturing 136 Division 19—Tissue paper manufacturing 138 Division 20—Integrated iron and steel manufacturing 140 Division 21—Manufacture of carbon steel from cold ferrous feed 145 Division 22—Petroleum refining 148 Division 23—Production of ethene (ethylene) 151 Division 24—Production of polyethylene 152 Division 25—Production of synthetic rutile 153 Division 26—Production of manganese 154 Division 27—Production of clinker 156 Division 28—Production of lime 158 Division 29—Production of fused alumina 159 Division 30—Production of copper 160 Division 31—Production of carbamide (urea) 162 Division 32—Production of sodium carbonate (soda ash) and sodium bicarbonate 163 Division 33—Production of ammonium nitrate 165 Division 34—Production of ammonia 166 Division 35—Production of iron ore pellets 167 Division 36—Production of liquefied natural gas 169 Division 37—Production of magnetite concentrate 170 Division 38—Production of glass beads 171 Division 39—Production of sodium silicate glass 172 Division 40—Production of polymer grade propene (polymer grade propylene) 173 Division 41—Production of rolled aluminium 174 Division 42—Production of chlorine gas and sodium hydroxide (caustic soda) solution 175 Division 43—Production of fused zirconia 176 Division 44—Manufacture of reconstituted wood‑based panels 177 Division 45—Production of coke oven coke 178 Division 46—Production of hydrogen peroxide 179 Division 47—Production of ceramic floor and wall tiles 180 Division 48—Production of nickel 181 Division 49—Production of helium 183 Division 50—Production of dried distillers grains with solubles 184 Division 51—Production of glass wool 185 Division 52—Production of coal char 186 Division 53—Production of ferrovanadium 187 Division 54—Rendering of animal by‑products 188 Part 4—Allocative baselines 189 Part 5—Eligibility to apply for free carbon units 198 Division 1—General 198 Division 2—Personal eligibility—existing activity in previous financial year 199 Division 3—Personal eligibility—no existing activity in previous financial year 202 Part 6—Approval of application form for free carbon units 204 Part 7—Application for free carbon units 208 Division 1—General 208 Division 2—Shared eligibility 211 Division 3—Special arrangements for facility without continuous emissions‑intensive trade‑exposed activity 213 Division 4—Special arrangements for significant expansion 215 Division 5—Special arrangements for new facilities 218 Division 6—Special arrangements for sub‑threshold facilities 219 Division 7—Measuring emissions in applications 220 Division 8—Special arrangements for LNG supplementary allocations 221 Part 8—Consideration of application for free carbon units 223 Division 1—Further information about application 223 Division 2—Revision of application—inadequate information about relevant product 225 Division 3—Decision on application for free carbon units 228 Division 4—Notification of proposed refusal 230 Division 5—Notification of decision 232 Division 6—Correction of inaccurate allocation of free carbon units 233 Division 7—Revision of application where outstanding debt 234 Part 9—Method of calculating the number of free carbon units to be issued to a person 235 Division 1—General 235 Division 2—Special arrangements for facility without continuous emissions‑intensive trade‑exposed activity 238 Division 3—Special arrangements for significant expansion 239 Division 4—Formula 241 Division 5—Modification of formula in Division 4—large user electricity contracts 248 Division 6—Maximum number of units to be allocated to new facilities 257 Division 7—Sub‑threshold emissions adjustments 261 Division 8—Adjustments relating to Joint Petroleum Development Area and Greater Sunrise unit area 264 Division 9—Calculation of supplementary allocation of units for LNG production activity 265 Division 10—LNG supplementary allocation rules 267 Part 10—Year to which units apply 278 Division 1—Application in first year of the program 278 Division 2—Application in second year of the program 279 Division 3—Application in third year of the program 280 Division 4—Application in subsequent years 281 Part 11—Keeping records and materials 282 Part 12—Reporting requirements 283 Part 13—Relinquishment of carbon units 286 Division 1—General 286 Division 2—Closure of equipment 287 Subdivision 1—Closure 287 Subdivision 2—Procedure for relinquishment on closure 288 Division 3—Negative allocation 290 Division 4—Inaccurate allocation of free carbon units 292 Part 14—Incidental provisions 293 Schedule 2—Pipelines that are not natural gas supply pipelines 295 Endnotes 305 Endnote 1—About the endnotes 305 Endnote 2—Abbreviation key 306 Endnote 3—Legislation history 307 Endnote 4—Amendment history 309 Part 1—Preliminary 1.1 Name of Regulations These Regulations are the Clean Energy Regulations 2011. 1.2 Commencement These Regulations commence on commencement of sections 3 to 303 of the Clean Energy Act 2011. 1.3 Definitions—general In these Regulations: Act means the Clean Energy Act 2011. ANREU Act means the Australian National Registry of Emissions Units Act 2011. ANREU Regulations means the Australian National Registry of Emissions Units Regulations 2011. CNG means compressed natural gas. CO2‑e means carbon dioxide equivalence. contact details, for a person, means the person’s: (a) name; and (b) phone number; and (c) email address; and (d) postal address. designated opt‑in person, for the Opt‑in Scheme, has the meaning given in regulation 3.30. fugitive emissions: see regulation 1.5. identifying details, for a person, means: (a) the person’s ABN; or (b) if the person does not have an ABN—the person’s ACN; or (c) if the person does not have an ABN or ACN—the person’s ARBN; or (d) if the person does not have an ABN, ACN or ARBN—the person’s trading name and street address. identifying information, for a facility, means the information required under paragraphs 4.04A(2)(a) to (h) of the NGER Regulations. identifying information, for a person, means the following information: (a) the person’s name and trading name (if any); (b) the person’s identifying details; (c) a statement about whether the person is an individual, a body corporate, a trust, a corporation sole, a body politic or a local governing body; (d) if the person is an individual—the following: (i) the person’s telephone number, email address and residential address; (ii) if the person’s postal address is different from the person’s residential address—the person’s postal address; (e) if the person is not an individual—the following: (i) the postal address of the head office of the person; (ii) the name, position, telephone number, email address and postal address of a contact person for the person; (f) if the person is a body corporate that is not a foreign person—details of at least one executive officer (or equivalent) of the body corporate, including the officer’s name, telephone number, email address and postal address; (g) if the person is a body corporate that is a foreign person—the details mentioned in paragraph (f) for the body corporate and the name of any Australian agent through which the person conducts business; (h) if the person is a trust—the name, telephone number, email address and postal address of each trustee; (i) if the person is a corporation sole—the name and address of the individual who makes up the corporation sole; (j) if the person is a body politic or local governing body—the name, telephone number, email address and postal address of at least one officeholder of the body politic or local governing body; (k) if the person is a body established under a law of the Commonwealth, a State or Territory (other than a general law allowing incorporation as a company or body corporate)—the following: (i) the name of the legislation establishing the body; (ii) the day the body was established; (iii) whether the body is a Commonwealth, State or Territory body. liquefied natural gas, or LNG, has the same meaning as liquefied natural gas in regulation 1.03 of the NGER Regulations. liquefied petroleum gas, or LPG, has the same meaning as liquefied petroleum gas in regulation 1.03 of the NGER Regulations. NGER Act means the National Greenhouse and Energy Reporting Act 2007. NGER Regulations means the National Greenhouse and Energy Reporting Regulations 2008. 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 · Climate Change Convention · controlling corporation · covered emission · declared designated joint venture · designated joint venture · eligible financial year · eligible international emissions unit · executive officer · facility · financial control · foreign person · free carbon unit · fuel tax credit · GST group · GST joint venture · Information Database · Jobs and Competitiveness Program · liability transfer certificate · liability transfer certificate · liable entity · liquid petroleum fuel · mandatory designated joint venture · non‑group entity · obligation transfer number or OTN · operational control. · participating percentage · person · registered holder · Registry account · Regulator · relevant operator · surrender · taxable fuel · unit shortfall charge 1.4 Definition—applicable identification procedure For the definition of applicable identification procedure in section 5 of the Act, the following procedure is the applicable identification procedure the Regulator must use in identifying a person: (a) the Regulator must review the person’s identifying information; and (b) the Regulator must be satisfied that the Regulator has complete and correct identifying information for the person. 1.5 Definition—fugitive emissions (1) For the definition of fugitive emissions in section 5 of the Act, fugitive emissions means greenhouse gas emissions that are released in connection with, or as a consequence of, the extraction, processing, storage or delivery of fossil fuel. (2) However, fugitive emissions do not include emissions released from the combustion of fuel for the production of useable heat or electricity. 1.8 Definition—natural gas supply pipelines (1) For the definition of natural gas supply pipeline in section 5 of the Act, the kinds of pipelines mentioned in subregulation (2) are specified as pipelines that are not natural gas supply pipelines. (2) The pipelines are: (a) anything upstream of a connection point or (if there is no connection point) an exit flange on a pipeline conveying natural gas from a gas processing plant mentioned in column 1 of the table in Schedule 2; or (b) a gathering system operated as part of an upstream producing operation; or (c) anything downstream of a point on a pipeline from which a person takes natural gas for use. (3) In this regulation: connection point, for a pipeline conveying natural gas from a gas processing plant, means a point mentioned in column 2 of the table in Schedule 2. exit flange, for a pipeline conveying natural gas from a gas processing plant, means a flange mentioned in column 2 of the table in Schedule 2. 1.9 Definition—withdrawal (1) For the definition of withdrawal, in relation to natural gas, in section 5 of the Act, a withdrawal of natural gas occurs when: (a) the natural gas exits from a point on a pipeline in relation to which: (i) the natural gas supplier that supplies that gas; or (ii) an agent of that natural gas supplier; or (iii) a person otherwise acting in accordance with an agreement entered into with that natural gas supplier; will ascertain the amount of that natural gas supplied to a person wholly or partly for use; or (b) the natural gas is combusted in machinery or equipment used to heat or compress natural gas within a natural gas supply pipeline. (1A) However, if the natural gas exits from a point on a pipeline in the circumstances in paragraph (1)(a), or is combusted in the circumstances in paragraph (1)(b), during the period between 1 July 2012 and 31 August 2012, a withdrawal of natural gas is taken to have occurred on 1 September 2012. (1B) There is no withdrawal of natural gas from a natural gas supply pipeline if the gas: (a) is supplied by a person who is the owner or operator of the pipeline; and (b) the supply is made under an agreement for the provision of a pipeline service. (2) To avoid doubt, natural gas is not withdrawn from a natural gas supply pipeline if the natural gas: (a) goes from the pipeline to an underground storage reservoir; or (b) goes between two natural gas supply pipelines; or (c) goes from a natural gas supply pipeline directly into the atmosphere. (3) In subregulation (1B), pipeline service means: (a) a service provided by means of a natural gas supply pipeline, including: (i) a haulage service (such as conveyance or reticulation of natural gas); and (ii) a service providing for, or facilitating, the interconnection of pipelines; and (b) a service ancillary to the provision of a service referred to in paragraph (a); but does not include the production, sale or purchase of natural gas. 1.10 When supply of natural gas occurs For paragraph 6(a) of the Act, the supply of natural gas occurs at the time at which the gas is withdrawn from a natural gas supply pipeline. 1.11 Electronic notice transmitted to the Regulator (1) For subsection 7(2) of the Act, an electronic notice must be transmitted: (a) using the Regulator’s website; and (b) as an instruction in relation to a Registry account. (2) The electronic notice must be transmitted by either: (a) an individual who is a registered holder of the Registry account to which the notice relates; or (b) an authorised representative of the registered holder who has been given access to the Registry account under subregulation 31(2) of the ANREU Regulations. 1.12 Requirements for documents If these Regulations require a person to provide a document, any document provided must be current at the time it is provided. 1.13 English translation of documents (1) This regulation applies if: (a) a person is required by these Regulations to provide a document; and (b) the document is not in English. (2) The person must provide an English translation of the document, which has been prepared and certified by an authorised translation service as a true copy of the original document. (3) In this regulation: authorised translation service means a translation service accredited by the National Accreditation Authority for Translators and Interpreters Ltd. 1.14 When documents need not be given If these Regulations require a person to provide a document, the person does not need to provide the document if: (a) the person has previously provided the document to the Regulator under: (i) the Act or these Regulations; or (ii) the NGER Act or NGER Regulations; or (iii) the ANREU Act or the ANREU Regulations; and (b) the document previously provided is current at the time it is required to be provided. Part 3—Liable entities Division 1—Direct emitters of greenhouse gases 3.1 Prescribed class of waste For subparagraphs 23(10)(a)(i), 24(9)(a)(i) and 25(8)(a)(i) of the Act, the prescribed class of waste is any waste. 3.2 Prescribed distance for landfill facilities (1) For subparagraphs 23(10)(a)(ii), 24(9)(a)(ii) and 25(8)(a)(ii) of the Act, the prescribed distance is zero metres. (2) For subregulation (1), if the site of one landfill facility shares a boundary with the site of another landfill facility, the distance between the 2 landfill facilities is taken to be more than the prescribed distance. 3.3 Adjustment of provisional emissions number—Joint Petroleum Development Area and Greater Sunrise unit area For the definition of prescribed percentage in subsections 26(2), 27(2) and 28(2) of the Act, 0% is specified in relation to the facility for the eligible financial years commencing on 1 July 2012, 1 July 2013 and 1 July 2014. Division 3—Natural gas 3.5 Netted‑out numbers for OTN holders—transfer of gases between storage areas For subsection 35(9) of the Act, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, the OTN holder uses the whole or a part (which whole or part is in this regulation called the relevant portion) of the amount mentioned in paragraph (a) to manufacture: (i) compressed natural gas; or (ii) liquefied natural gas; or (iii) liquefied petroleum gas; and (c) the compressed natural gas, liquefied natural gas or liquefied petroleum gas is transferred from storage at one place to storage at another place by the authority of: (i) a written permission for the movement of the gas under paragraph 39K(6)(c) of the Excise Act 1901; or (ii) a written permission for the removal of the gas under section 61A of the Excise Act 1901; and (d) subsection 35(7) of the Act does not apply to the compressed natural gas, liquefied natural gas or liquefied petroleum gas; and (e) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (e) is a netted‑out number of the OTN holder for the eligible financial year. 3.5A Netted‑out numbers for OTN holders—use of natural gas without combustion For subsection 35(9) of the Act, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, an amount of covered emissions from the operation of a facility was attributable to the use, without combustion, of the whole or a part (which whole or part is in this regulation called the relevant portion) of the amount mentioned in paragraph (a); and (c) the covered emissions mentioned in paragraph (b) count for the purposes of subsection 20(1), 21(1), 22(1), 23(1), 24(1) or 25(1) of the Act; and (d) subsections 35(2) and 35(6) of the Act do not apply to the covered emissions mentioned in paragraph (b); and (e) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (e) is a netted‑out number of the OTN holder for the eligible financial year. 3.5C Application of natural gas to own use For subsection 35B(1) of the Act, if: (a) during: (i) the financial year commencing on 1 July 2013; or (ii) a later eligible financial year; a person applies an amount of natural gas to the person’s own use; and (b) greenhouse gas is released into the atmosphere as a direct result of the application of the amount of natural gas to the person’s own use; and (c) no preliminary emissions number under section 33 or 35 of the Act is wholly or partly attributable to any supply of the natural gas; and (d) no provisional emissions number under section 35A of the Act is wholly or partly attributable to any supply of the natural gas; and (e) no provisional emissions number under section 20, 21, 22, 23, 24 or 25 of the Act is wholly or partly attributable to covered emissions from the use of the natural gas; and (f) the potential greenhouse gas emissions embodied in the amount mentioned in paragraph (a) have a CO2‑e of at least 10,000 tonnes; then, for the purposes of the Act: (g) the number of emissions (in CO2‑e tonnes) is a provisional emissions number of the person for the eligible financial year; and (h) the person is a liable entity for the eligible financial year. Division 3A—Liquefied petroleum gas, and liquefied natural gas, for non‑transport use 3.5F Amount exempt from preliminary emissions number (1) For paragraphs 36B(1)(f) and 36C(1)(f) of the Act, the following amounts are exempt from the calculation of a preliminary emissions number: (a) an amount of LPG that is packaged in a non‑refillable container that holds no more than 1 kilogram of LPG; (b) an amount of LPG, packaged in a container that holds no more than 10 kilograms of LPG, that: (i) indicates the gas is for use as a refrigerant; and (ii) does not indicate the gas is for combustion; (c) an amount of LPG: (i) that is supplied, by a person mentioned in paragraph 36B(1)(d) or 36C(1)(d) of the Act (the supplier), to another person (the recipient); and (ii) for which the recipient provides a statutory declaration to the supplier in accordance with subregulation (2). (2) For paragraph (1)(c), the statutory declaration must be provided by the recipient to the supplier before the amount of LPG is supplied, stating that: (a) the LPG is for incorporation into a product packaged in a container mentioned in paragraph (1)(a) or (b); or (b) the LPG is for packaging into a container mentioned in paragraph (1)(a) or (b). 3.5G Netted‑out numbers—import of LPG or LNG for non‑transport use (1) For subsection 36B(4) of the Act, a number ascertained in accordance with subregulation (2) or (3) is a netted‑out number of a person for an eligible financial year. LPG or LNG used as feedstock or without greenhouse gas emissions (2) If: (a) a person has, under subsection 36B(1) of the Act, a preliminary emissions number for an eligible financial year; and (b) the preliminary emissions number is attributable to the import of an amount of LPG or LNG; and (c) during an eligible financial year, the person uses the whole or part of the amount mentioned in paragraph (b) (the relevant portion): (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; and (d) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (d) is the netted‑out number of the person for the eligible financial year. LPG or LNG counted under Division 2 of Part 3 of Act (3) If: (a) a person has, under subsection 36B(1) of the Act, a preliminary emissions number for an eligible financial year; and (b) the preliminary emissions number is attributable to the import of an amount of LPG or LNG for which, apart from any remission of customs duty, customs duty is or was payable by a person; and (c) during an eligible financial year, an amount of covered emissions from the operation of a facility under the operational control of the person was attributable to the non‑transport combustion of the whole or part of the amount mentioned in paragraph (b) (the relevant portion); and (d) the covered emissions mentioned in paragraph (c) count for the purposes of subsection 20(1), 21(1), 22(1), 23(1), 24(1) or 25(1) of the Act; and (e) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (e) is the netted‑out number of the person for the eligible financial year. 3.5H Netted‑out numbers—manufacture or production of LPG or LNG for non‑transport use (1) For subsection 36C(4) of the Act, a number ascertained in accordance with subregulation (2) or (3) is a netted‑out number of a person for an eligible financial year. LPG or LNG used as feedstock or without greenhouse gas emissions (2) If: (a) a person has, under subsection 36C(1) of the Act, a preliminary emissions number for an eligible financial year; and (b) the preliminary emissions number is attributable to the manufacture or production of an amount of LPG or LNG; and (c) during an eligible financial year, the person uses the whole or part of the amount mentioned in paragraph (b) (the relevant portion): (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; and (d) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (d) is the netted‑out number of the person for the eligible financial year. LPG or LNG counted under Division 2 of Part 3 of Act (3) If: (a) a person has, under subsection 36C(1) of the Act, a preliminary emissions number for an eligible financial year; and (b) the preliminary emissions number is attributable to the manufacture or production of an amount of LPG or LNG for which, apart from any remission of excise duty, excise duty is or was payable by a person; and (c) during an eligible financial year, an amount of covered emissions from the operation of a facility under the operational control of the person was attributable to the non‑transport combustion of the whole or part of the amount mentioned in paragraph (b) (the relevant portion); and (d) the covered emissions mentioned in paragraph (c) count for the purposes of subsection 20(1), 21(1), 22(1), 23(1), 24(1) or 25(1) of the Act; and (e) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (e) is the netted‑out number of the person for the eligible financial year. 3.5J Netted‑out numbers—supply of LPG or LNG to a person who quotes the person’s OTN (1) For subsection 36D(5) of the Act, a number ascertained in accordance with this regulation is a netted‑out number of a person for an eligible financial year. LPG or LNG used as feedstock or without greenhouse gas emissions (2) If: (a) the OTN holder quotes the OTN holder’s OTN in relation to the supply to the OTN holder of an amount of LPG or LNG; and (b) during an eligible financial year, the whole or part of the amount mentioned in paragraph (a) (the relevant portion) is used: (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; and (c) the potential greenhouse gas emissions embodied in the relevant portion have a CO2‑e of a particular number of tonnes; the number mentioned in paragraph (c) is the netted‑out number of the OTN holder for the eligible financial year. Division 4—Obligation Transfer Numbers Subdivision 4.1—Requirements for application for OTN 3.6 Application for OTN (1) This regulation is made for paragraph 38(2)(c) of the Act. (2) An application must be accompanied by the following information and documents: (a) the identifying information for the applicant; (b) a statement indicating which of sections 55B, 56, 57, 58, 58AA and 58AB of the Act is likely to require or permit the applicant to quote an OTN. (3) An application must also be accompanied by the following information: (a) if the applicant states that section 55B of the Act is likely to require the applicant to quote an OTN—the information and documents mentioned in regulation 3.7; (b) if the applicant states that section 56 of the Act is likely to permit the applicant to quote an OTN—the information and documents mentioned in regulation 3.19; (c) if the applicant states that section 57 of the Act is likely to permit the applicant to quote an OTN—the information and documents mentioned in regulation 3.8; (d) if the applicant states that section 58 of the Act is likely to permit the applicant to quote an OTN—the information and documents mentioned in regulation 3.9; (e) if the applicant states that section 58AA of the Act is likely to require the applicant to quote an OTN—the information and documents mentioned in regulation 3.10A; (f) if the applicant states that section 58AB of the Act is likely to permit the applicant to quote an OTN—the information and documents mentioned in regulation 3.10B. (4) If more than one of the paragraphs in subregulation (3) applies to the applicant, the application need only be accompanied by the information and documents mentioned in one of the paragraphs applying to the applicant. 3.7 Eligibility information for large gas consuming facility (1) This regulation applies to an application for an OTN on the basis that the applicant is likely to be required to quote an OTN to a natural gas supplier for natural gas which it is reasonably expected will be used in operating a large gas consuming facility. (2) The application must be accompanied by the following information and documents: (a) the identifying information for the facility; (b) either: (i) for a facility of a mandatory designated joint venture—the name of the person taken to have operational control of the facility throughout the period under subsection 11B(15) of the NGER Act; or (ii) for any other facility—the name of the person who has operational control of the facility; (c) if the applicant is not the person with operational control of the facility: (i) the contact details of the person mentioned in subparagraph (b)(i) or (ii) for the facility; (ii) a statement describing the applicant’s relationship to that person; and (iii) a statement describing the applicant’s relationship to the facility; (d) for the application, the financial year in which the facility passes the threshold test set out in subsection 55A (3) of the Act; (e) either: (i) a statement confirming the amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of natural gas during the financial year mentioned in paragraph (d); or (ii) a statement confirming the amount of natural gas combusted at the facility during that year; (f) the day from which the applicant expects to be required to quote an OTN in relation to the facility; (g) a statement that it is likely that the applicant will be supplied with natural gas by a natural gas supplier in the 12 month period commencing on the later of the following days: (i) 1 July 2012; and (ii) the day on which the application is made; (h) either: (i) a statement that it is likely that the applicant will use the natural gas mentioned in paragraph (g) in the operation of the facility; or (ii) a statement that it is likely that the applicant will provide the natural gas mentioned in paragraph (g) to another person (the user) for use in the operation of the facility, and the provision of the natural gas will not involve a supply of the natural gas; (i) if the application includes a statement mentioned in subparagraph (h)(ii): (i) the user’s name and contact details; (ii) a statement describing the applicant’s relationship to the user; (j) one of the following statements: (i) a statement that the applicant is currently supplied natural gas for use at the facility; (ii) a statement that the applicant is not currently supplied natural gas for use at the facility and the reason why the applicant expects to start being supplied natural gas for use at the facility in the period mentioned in subparagraph (g)(i) or (ii); (k) either: (i) documents that verify the information given to the Regulator under subparagraph (j)(i) or (ii); or (ii) with the consent of the Regulator—a statutory declaration that verifies that information. (3) The information required by paragraph (2)(d), and the statement mentioned in paragraph (2)(e), must be given to the Regulator in the form of statutory declarations if requested by the Regulator. 3.8 Eligibility information for feedstock (1) This regulation applies to an application for an OTN on the basis that the applicant is likely to be permitted to quote an OTN to a natural gas supplier for natural gas which it is reasonably expected will be used as a feedstock at a facility, business premises or other location. (2) The application must be accompanied by the following information and documents: (a) a description of the chemical process in which natural gas will be used as a feedstock, including: (i) the inputs to the process and the relative amount of each input; and (ii) the outputs of the process and the relative amount of each output; (b) the day from which the person expects to be permitted to quote an OTN in relation to the natural gas that will be used as a feedstock at the facility, business premises or other location; (c) a statement that it is likely that the applicant will be supplied natural gas by a natural gas supplier in the 12 month period commencing on the later of the following days: (i) 1 July 2012; (ii) the day on which the application is made; (d) one of the following: (i) a statement that it is likely that all or part of the natural gas mentioned in paragraph (c) will be for use by the applicant as a feedstock at the facility, business premises or other location; (ii) a statement that it is likely that the applicant will provide the natural gas to another person (the user) who will use all or part of the natural gas as a feedstock at the facility, business premises or other location, and the provision of the natural gas will not involve a supply of the natural gas; (e) if the application includes a statement mentioned in subparagraph (d)(ii): (i) the user’s name and contact details; (ii) a statement describing the applicant’s relationship to the user; (f) one of the following statements: (i) a statement that the applicant is currently supplied natural gas for use as a feedstock at the facility, business premises or other location; (ii) a statement that the applicant is not currently supplied natural gas for use at the facility, business premises or other location, and the reason why the applicant expects to start being supplied natural gas for use at the facility, business premises or other location in the period mentioned in subparagraph (c)(i) or (ii); (g) the information mentioned in regulation 3.10 for the facility, business premises or other location; (h) either: (i) documents that provide evidence of the statement given to the Regulator under subparagraph (f)(i) or (ii) or (ii) with the consent of the Regulator—a statutory declaration that verifies the statement. 3.9 Eligibility information for manufacture of CNG, LNG or LPG (1) This regulation applies to an application for an OTN on the basis that the applicant is likely to be permitted to quote an OTN to a natural gas supplier for natural gas to be used, in the course of carrying on a business, to manufacture CNG, LNG or LPG. (2) The application must be accompanied by the following information and documents: (a) the day from which the applicant expects to be permitted to quote an OTN in relation to the natural gas that is to be used to manufacture CNG, LNG or LPG at a facility, business premises or other location; (b) a statement that it is likely that the applicant will be supplied natural gas by a natural gas supplier in the 12 month period commencing on the later of the following days: (i) 1 July 2012; and (ii) the day on which the application is made; (c) one of the following: (i) a statement that it is likely that the applicant will (ii) a statement that it is likely that the applicant will provide the natural gas to another person (the user) who will use all or part of the natural gas to manufacture CNG, LNG or LPG at the facility, business premises or other location, and the provision of the natural gas will not involve a supply of the natural gas; (d) if the application includes a statement mentioned in subparagraph (c)(ii): (i) the user’s name and contact details; (ii) a statement describing the applicant’s relationship to the user; (e) one of the following statements: (i) a statement that the applicant is currently supplied natural gas for use in the manufacture of CNG, LNG or LPG at the facility, business premises or other location; (ii) a statement that the applicant is not currently supplied natural gas for use in the manufacture of CNG, LNG or LPG at the facility, business premises or other location, and the reason why the applicant expects to start being supplied natural gas for use at the facility, business premises or other location in the period mentioned in subparagraph (b)(i) or (ii); (f) the information mentioned in regulation 3.10 for the facility, business premises or other location; (g) either: (i) documents that provide evidence of the statement given to the Regulator under subparagraph (e)(i) or (ii); or (ii) with the consent of the Regulator—a statutory declaration that verifies the statement. 3.10 Eligibility information for location where natural gas to be used (1A) This regulation applies to an application to which regulation 3.8 or 3.9 applies. (1) If the natural gas will be used at a facility that is in existence at the time of the application, the application must also be accompanied by the following additional information: (a) the identifying information for the facility; (b) either: (i) for a facility of a mandatory designated joint venture—the name of the person taken to have operational control of the facility throughout the period under subsection 11B(15) of the NGER Act; or (ii) for any other facility—the name of the person who has operational control of the facility; (c) if the applicant is not the person with operational control of the facility: (i) the contact details of the person mentioned in subparagraph (b)(i) or (ii) for the facility; (ii) a statement describing the applicant’s relationship to that person; and (iii) a statement describing the applicant’s relationship to the facility. (2) If the natural gas will be used at a facility that is not in existence at the time of the application, the application must also be accompanied by the following additional information about the proposed facility: (a) the identifying information for the proposed facility; (b) either: (i) for a proposed facility of a mandatory designated joint venture—the name of the person likely to be taken to have operational control of the facility throughout the period under subsection 11B(15) of the NGER Act; or (ii) for any other proposed facility—the name of the person likely to have operational control of the facility; (c) if the applicant is not the person with operational control of the proposed facility: (i) the contact details of the person mentioned in paragraph (b) for the proposed facility; (ii) a statement describing the applicant’s relationship to that person; and (iii) a statement describing the applicant’s relationship to the proposed facility. (3) If the natural gas will be used at a business premises or other location that is not a facility or proposed facility, the application must also be accompanied by the following additional information: (a) either: (i) the name of the business premises or location, if any; or (ii) if the premises or location does not have a name—a description of the premises or location; (b) the street address of the business premises or location, if any; (c) the latitude and longitude of the business premises or location. 3.10A Eligibility information for mandatory quotation of OTN for supply of LPG or LNG (1) This regulation applies to an application for an OTN on the basis that the applicant is likely to be required to quote an OTN under subsection 58AA(1) of the Act to a gaseous fuel supplier for LPG or LNG. (2) The application must be accompanied by the following information and documents: (a) the identifying information for the facility; (b) either: (i) for a facility of a mandatory designated joint venture—the name of the person taken to have operational control of the facility throughout the period under subsection 11B(15) of the NGER Act; or (ii) for any other facility—the name of the person who has operational control of the facility; (c) if the applicant is not the person with operational control of the facility: (i) the contact details of the person mentioned in subparagraph (b)(i) or (ii) for the facility; and (ii) a statement describing the applicant’s relationship to that person; and (iii) a statement describing the applicant’s relationship to the facility; (d) for the application, the financial year in which the facility passes the threshold test mentioned in subregulation 3.19A(4); (e) either: (i) a statement confirming the amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of LPG or LNG during the financial year mentioned in paragraph (d); or (ii) a statement confirming the amount of LPG or LNG combusted at the facility during that year; (f) the day from which the applicant expects to be required to quote an OTN in relation to the facility; (g) a statement that it is likely that the applicant will be supplied with LPG or LNG in the 12 month period commencing on the later of the following days: (i) 1 July 2013; (ii) the day on which the application is made; (h) one of the following statements: (i) a statement that the applicant is currently supplied LPG or LNG for use at the facility; (ii) a statement that the applicant is not currently supplied LPG or LNG for use at the facility and the reason why the applicant expects to start being supplied LPG or LNG for use at the facility in the period mentioned in subparagraph (g)(i) or (ii); (i) a statement that it is likely that the LPG or LNG mentioned in paragraph (h) will be used in the operation of the facility; (j) documents that verify the information given to the Regulator under subparagraph (g)(i) or (ii). 3.10B Eligibility information for voluntary quotation of OTN for supply of LPG or LNG (1) This regulation applies to an application for an OTN on the basis that the applicant is likely to be permitted to quote an OTN under subsection 58AB(1) of the Act. (2) The application must be accompanied by the following information and documents: (a) if the applicant is likely to be permitted to quote an OTN because the applicant is likely to use some or all of the amount of LPG as feedstock—the information and documents mentioned in subregulations (3) and (5); (b) if the applicant is likely to be permitted to quote an OTN because the applicant is likely to use some or all of the amount of LPG in such a way as to not emit any greenhouse gases—the information and documents mentioned in subregulations (4) and (5); (c) in any other case—information and documents mentioned in subregulation 3.19G(2). (3) For an applicant mentioned in paragraph (2)(a), the application must be accompanied by a description of the chemical process in which LPG or LNG will be used as feedstock, including: (a) the inputs to the process and the relative amount of each input; and (b) the outputs of the process and the relative amount of each output. (4) For an applicant mentioned in paragraph (2)(b), the application must be accompanied by a description of the process by which the LPG or LNG will be used without combustion of the LPG or LNG. (5) For an applicant mentioned in paragraph (2)(a) or (b), the application must also be accompanied by the following information and documents: (a) the day from which the person expects to be permitted to quote an OTN in relation to the LPG or LNG that will be used at the facility, business premises or other location: (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; (b) a statement that it is likely that the applicant will be supplied LPG or LNG in the 12 month period commencing on the later of the following days: (i) 1 July 2013; (ii) the day on which the application is made; (c) a statement that it is likely that all or part of the LPG or LNG mentioned in paragraph (b) will be for a use mentioned in subparagraph (a)(i) or (ii) at the facility, business premises or other location; (d) if the applicant is currently supplied LPG or LNG at the facility, business premises or other location for a use mentioned in subparagraph (a)(i) or (ii)—a statement to this effect; (e) if the applicant is not currently supplied LPG or LNG at the facility, business premises or other location—the reason why the applicant expects to start being supplied LPG or LNG for a use mentioned in subparagraph (a)(i) or (ii) at the facility, business premises or other location in the period mentioned in subparagraph (b)(i) or (ii); (f) documents that verify the information given to the Regulator under paragraph (d) or (e); (g) if the LPG or LNG will be used at a facility (whether or not the facility is in existence at the time of application): (i) the identifying information for the facility; and (ii) if the facility belongs to a mandatory designated joint venture—the name of the person taken to have operational control of the facility throughout the period under subsection 11B(15) of the NGER Act; and (iii) if the facility does not belong to a mandatory designated joint venture—the name of the person who has operational control of the facility; and (iv) if the applicant is not the person with operational control of the facility—the contact details of the person mentioned in subparagraph (ii) or (iii) and a description of the applicant’s relationship to that person and to the facility; (h) if the LPG or LNG will be used at a business premises or other location that is not a facility or proposed facility mentioned in paragraph (g): (i) the name of the business premises or location, or a description of the premises or location if there is no name for the business premises; and (ii) the street address of the business premises or location, if any; and (iii) the latitude and longitude of the business premises or location. Subdivision 4.2—Large gas consuming facilities 3.11 Conditions for ceasing to be large gas consuming facility For subsection 55A(2) of the Act, a facility is taken to cease to be a large gas consuming facility if: (a) an application is made under subregulation 3.12(2) or 3.14(1) in relation to the facility; and (b) the Regulator decides under regulation 3.13(2) or 3.16(2) that the facility should cease to be treated as a large gas consuming facility. 3.12 One‑off year—application (1) This regulation applies to a facility that will become a large gas consuming facility on the basis it has passed the threshold test in a financial year (the one‑off year). (2) The operator of the facility may apply to the Regulator for a decision that the facility should, immediately after becoming a large gas consuming facility, cease to be a large gas consuming facility, on the basis that the facility: (a) did not pass the threshold test in the 2 financial years preceding the one‑off year; and (b) is unlikely to pass the test in the 2 financial years following the one‑off year. (3) The application must be made by: (a) at least 90 days before the day on which the facility will become a large gas consuming facility; or (b) if the Regulator is satisfied that it is justified in the circumstances—a day decided by the Regulator that is less than 90 days before the day on which the facility will become a large gas consuming facility. (4) The application must be accompanied by identifying information for the applicant. (5) The application must also be accompanied by the following information and documents about the facility: (a) the identifying information for the facility; (b) the start and end dates of the one‑off year; (c) either: (i) a statement confirming the amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of natural gas in the one‑off year and each of the 2 financial years preceding the one‑off year; or (ii) a statement confirming the amount of natural gas combusted at the facility for the one‑off year and each of the 2 financial years preceding the one‑off year; (d) a statement of the amount of natural gas supplied for use at the facility in the one‑off year and each of the 2 financial years preceding the one‑off year; (e) a statement of the reason why the emissions from the facility that are attributable to the combustion of natural gas are likely to be less than 25 000 tonnes of CO2‑e in the 2 financial years after the one‑off year; (f) either: (i) documents that verify the information given to the Regulator under paragraphs (d) and (e); or |
(ii) with the consent of the Regulator—a statutory declaration that verifies that information. 3.13 One‑off year—Regulator’s decision (1) This regulation applies if an application is made under regulation 3.12 in relation to a facility. (2) The Regulator may decide that the facility should, immediately after becoming a large gas consuming facility, cease to be treated as a large gas consuming facility, if the Regulator is satisfied that: (a) the application contains the information and documents required by regulation 3.12; and (b) the information contained in the application is correct; and (c) greenhouse gas emissions from the operation of the facility attributable to the combustion of natural gas: (i) were less than 25 000 tonnes of CO2‑e in the 2 financial years preceding the one‑off year; and (ii) are likely to be less than 25 000 tonnes of CO2‑e in the 2 financial years following the one‑off year. (3) Without limiting the matters the Regulator may take into account when making a decision under subregulation (2), the Regulator may take into account any previous applications made in relation to the facility under regulation 3.12. (4) If the Regulator is not satisfied of the matters mentioned in paragraphs (2)(a), (b) and (c), the Regulator must refuse the application. (5) The Regulator must take all reasonable steps to ensure that a decision is made on the application: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.17 in relation to the application—within 90 days after the applicant gave the Regulator the information or documents; or (b) in any other case—within 90 days after the application was made. (6) The Regulator must tell the applicant, in writing, of the Regulator’s decision on the application. 3.14 Diminishing emissions—application (1) The operator of a large gas consuming facility may apply to the Regulator for a decision that the facility should cease to be a large gas consuming facility on the basis that: (a) greenhouse emissions from the operation of the facility attributable to the combustion of natural gas, for the financial year immediately preceding the financial year in which the application is made, were less than 25 000 tonnes of CO2‑e; and (b) it is likely that greenhouse emissions from the operation of the facility attributable to the combustion of natural gas will be less than 25 000 tonnes of CO2‑e in the financial year in which the application is made and the following financial year. (2) The application must be accompanied by identifying information for the applicant. (3) The application must also be accompanied by the following information and documents about the facility: (a) the identifying information for the facility; (b) if regulation 3.15 applies to the application—the name and contact details of the other person mentioned in that regulation; (c) either: (i) a statement, for each of the previous 3 financial years, confirming the amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of natural gas in the year; or (ii) a statement, for each of the previous 3 financial years, confirming the amount of natural gas combusted at the facility in the year; (d) a statement, for each of the previous 3 financial years, stating the amount of natural gas supplied for use at the facility in the year; (e) the reason why the emissions from the facility attributable to the combustion of natural gas are likely to be less than 25 000 tonnes of CO2‑e in the current financial year and the following financial year; (f) either: (i) documents that verify the information given to the Regulator under paragraphs (d) and (e); or (ii) with the consent of the Regulator—a statutory declaration that verifies that information. 3.15 Diminishing emissions—notification of OTN holder (1) This regulation applies to an application made under regulation 3.14 in relation to a facility if a person other than the applicant (the other person) would have a provisional emissions number under subsection 35(3) of the Act in relation to gas used at the facility because the facility ceased to be a large gas consuming facility, on the basis that the other person: (a) on or before the day of the application, quoted an OTN under subsection 55B(1) of the Act for the supply of natural gas for use at the facility; or (b) within 90 days after the application, is likely to be required to quote an OTN under subsection 55B(1) of the Act in relation to the supply of natural gas for use at the facility. (2) The applicant must tell the other person, in writing, about the application. 3.16 Diminishing emissions—Regulator’s decision (1) This section applies if an application is made under regulation 3.14 in relation to a facility. (2) The Regulator may decide that the facility should cease to be treated as a large gas consuming facility if the Regulator is satisfied that: (a) the application contains the information and documents required by subregulations 3.14(2) and (3); and (b) the information contained in the application is correct; and (c) greenhouse gas emissions from the operation of the facility attributable to the combustion of natural gas: (i) were less than 25 000 tonnes of CO2‑e in the previous financial year; and (ii) are likely to be less than 25 000 tonnes of CO2‑e in the current financial year and the following financial year. (3) If the Regulator is not satisfied of the matters mentioned in paragraphs (2)(a), (b) and (c), the Regulator must refuse the application. (4) The Regulator must take all reasonable steps to ensure that a decision is made on the application: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.17 in relation to the application—within 90 days after the applicant gave the Regulator the information; or (b) in any other case—within 90 days after the application was made. (5) The Regulator must tell the applicant, in writing, of the Regulator’s decision on the application. (6) If regulation 3.15 applies to the application, the Regulator must also tell the other person mentioned in that regulation, in writing, of the Regulator’s decision on the application. 3.17 Request for further information or documents (1) When considering an application under regulation 3.12 or 3.14, the Regulator may, by written notice given to an applicant, require the applicant to give the Regulator, within the period specified in the notice, further information or documents in connection with the application. (2) If the applicant fails to provide the information or documents, the Regulator may, by written notice given to the applicant: (a) refuse to consider the application; or (b) refuse to take any action, or any further action, in relation to the application. 3.18 When facility taken to cease to be large gas consuming facility (1) If the Regulator makes a decision under subregulation 3.13(2) in relation to a facility, the facility ceases to be a large gas consuming facility immediately after the facility becomes a large gas consuming facility. (2) If the Regulator makes a decision under subregulation 3.16(2) in relation to a facility, the facility ceases to be a large gas consuming facility on: (a) if regulation 3.15 applies to the application—the later of the following days: (i) 30 June in the financial year in which the application is made; (ii) 28 days after the Regulator notifies the OTN holder; (b) in any other case—30 June in the financial year in which the application is made. Subdivision 4.3—Large user of natural gas—application to be an approved person 3.19 Information and documents required with application (1) For subsection 56(3) of the Act, an application by a person to be an approved person must be accompanied by identifying information for the applicant. (2) For paragraph 56(3)(d) of the Act, the application must also be accompanied by the following information and documents: (a) a statement indicating the eligible financial year to which the application applies; (b) the identifying information for the facility; (c) one of the following statements in relation to the facility: (i) a statement that it is likely that the following conditions will be satisfied in the specified eligible financial year: (A) the facility will be under the operational control of the applicant; (B) the applicant will be supplied natural gas by a natural gas supplier; (C) the natural gas will be for use in the operation of the facility; (D) emissions from the combustion of natural gas at the facility will be at least 25 000 tonnes CO2‑e in the specified eligible financial year; (ii) a statement that it is likely that the following conditions will be satisfied in the specified eligible financial year: (A) the facility will be under the operational control of another person (the user); (B) the applicant will be supplied natural gas by a natural gas supplier; (C) the applicant will provide the whole or a part of the natural gas to the user for use in the operation of the facility; (D) the provision of the natural gas by the applicant will not involve a supply of the natural gas; (E) emissions from the combustion of natural gas at the facility will be at least 25 000 tonnes CO2‑e in the specified eligible financial year; (d) if the application is accompanied by a statement mentioned in subparagraph (c)(ii): (i) the user’s name and contact details; (ii) a statement describing the applicant’s relationship to the user; (e) a statement of the reason why the emissions from the facility attributable to the combustion of natural gas are likely to be at least 25 000 tonnes of CO2‑e in the specified eligible financial year; (f) one of the following statements: (i) a statement that the applicant is currently supplied natural gas for use at the facility; (ii) a statement that the applicant is not currently supplied natural gas for use at the facility, and the reason why the applicant expects to start being supplied natural gas for use at the facility in the 12 month period commencing on the later of the following days: (A) 1 July 2012; (B) the day on which the application is made. (g) either: (i) documents that provide evidence of the statements given to the Regulator under paragraphs (e) and (f); or (ii) with the consent of the Regulator—a statutory declaration that verifies the statements. Subdivision 4.4—Conditions for OTN quotation and acceptance of OTN quotation: supply of LPG or LNG 3.19A Condition for mandatory quotation of OTN—large LPG or LNG consuming facility (1) For paragraph 58AA(1)(c) of the Act, the condition is that the supply is for use in the operation of a large LPG or LNG consuming facility. (2) If: (a) a facility passes the threshold test set out in subregulation (4) for a financial year; and (b) the financial year began on or after 1 July 2011; then, at all times after the start of the second 1 July that occurs after the end of the financial year, the facility is a large LPG or LNG consuming facility. (3) However, a facility is not a large LPG or LNG consuming facility in a particular financial year if, the Regulator decides that: (a) the facility is taken not to be a large LPG or LNG consuming facility in accordance with regulation 3.19C; or (b) the facility ceases to be a large LPG or LNG consuming facility in accordance with regulation 3.19E. (4) For subregulation (1), a facility passes the threshold test for a financial year if so much of the total amount of covered emissions from the operation of the facility during the financial year as is attributable to the combustion of LPG or LNG has a CO2‑e of 25,000 tonnes or more. 3.19B Application to be taken not to be large LPG or LNG consuming facility—one‑off year (1) This regulation applies to a facility that will become a large LPG or LNG consuming facility on the basis it has passed the threshold test mentioned in subregulation 3.19A(4) in a financial year (the one‑off year). (2) An operator of a large LPG or LNG consuming facility may apply to the Regulator, in a form approved by the Regulator for this subregulation, to have a facility taken not to be a large LPG or LNG consuming facility, on the basis that the facility: (a) did not pass the threshold test in the 2 financial years preceding the one‑off year; and (b) is unlikely to pass the test in the 2 financial years following the one‑off year. (3) The application must be made by: (a) at least 90 days before the day on which the facility will become a large LPG or LNG consuming facility; or (b) if the Regulator is satisfied that it is justified in the circumstances—a day decided by the Regulator that is less than 90 days before the day on which the facility will become a large LPG or LNG consuming facility. (4) The application must be accompanied by the following information and documents: (a) the identifying information for the applicant; (b) the identifying information for the facility; (c) the start day and end day of the one‑off year; (d) either: (i) a statement confirming the amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of LPG or LNG in the one‑off year and each of the 2 financial years preceding the one‑off year; or (ii) a statement confirming the amount of LPG or LNG combusted at the facility for the one‑off year and each of the 2 financial years preceding the one‑off year; (e) a statement of the amount of LPG or LNG supplied for use at the facility in the one‑off year and each of the 2 financial years preceding the one‑off year; (f) a statement of the reason why the emissions from the facility that are attributable to the combustion of LPG or LNG are likely to be less than 25,000 tonnes of CO2‑e in the 2 financial years after the one‑off year; (g) documents that verify the information given to the Regulator under paragraphs (e) and (f). 3.19C Decision on application made under regulation 3.19B (1) The Regulator may decide that the facility is taken not to be a large LPG or LNG consuming facility, if the Regulator is satisfied that: (a) the application was made by a person mentioned in subregulation 3.19B(2); and (b) the application contains the information and documents required by subregulation 3.19B(4); and (c) covered emissions from the operation of the facility attributable to the combustion of LPG or LNG: (i) were less than 25,000 tonnes of CO2‑e in the 2 financial years preceding the one‑off year; and (ii) are likely to be less than 25,000 tonnes of CO2‑e in the 2 financial years following the one‑off year. (2) Without limiting the matters the Regulator may take into account when making a decision under subregulation (1), the Regulator may take into account any previous applications made in relation to the facility under regulation 3.19B. (3) If the Regulator is not satisfied of the matters mentioned in paragraphs (1)(a), (b) and (c), the Regulator must refuse the application. (4) The Regulator must take all reasonable steps to ensure that a decision is made on the application: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.19H in relation to the application—within 90 days after the applicant gave the Regulator the information or documents; or (b) in any other case—within 90 days after the application was made. (5) If the Regulator makes a decision under subregulation (1), that the facility is taken not to be a large LPG or LNG consuming facility, the decision is effective on the 1 July that the facility would have been a large LPG or LNG consuming facility in accordance with subregulation 3.19A(2). (6) The Regulator must notify the applicant, in writing, of the Regulator’s decision on the application. 3.19D Application to cease being large LPG or LNG consuming facility—diminishing emissions (1) An application to cease being a large LPG or LNG consuming facility must be: (a) in a form approved by the Regulator for this paragraph; and (b) made by a person who had a preliminary emissions number in relation to the LPG or LNG used in the operation of a large LPG or LNG consuming facility in the financial year before the application is made. (2) An application under subregulation (1) must be accompanied by the following information and documents: (a) the identifying information: (i) for the applicant; and (ii) for the facility; (b) information detailing either of the following amounts for each of the previous 3 financial years: (i) the total amount of covered emissions (in tonnes of CO2‑e) from the operation of the facility that were attributable to the combustion of LPG or LNG during each financial year; (ii) the amount of LPG or LNG combusted at the facility; (c) a statement confirming the amount of LPG or LNG supplied for use at the facility during each of the preceding 3 financial years; (d) the reason why the emissions from the facility attributable to the combustion of LPG or LNG are likely to be less than 25,000 tonnes of CO2‑e in the current financial year and the following financial year. 3.19E Decision on application made under regulation 3.19D (1) The Regulator may decide that a facility is taken to cease being a large LPG or LNG consuming facility if the Regulator is satisfied that: (a) the application was made by a person mentioned in paragraph 3.19D(1)(b); and (b) the application contains the information and documents required by subregulation 3.19D(2); and (c) the covered emissions from the operation of the facility attributable to the combustion of LPG or LNG: (i) had a CO2‑e of less than 25,000 tonnes in the previous financial year; and (ii) are likely to have a CO2‑e of less than 25,000 tonnes in the current financial year and the following financial year. (2) If the Regulator is not satisfied of the matters mentioned in paragraphs (1)(a), (b) and (c), the Regulator must refuse the application. (3) The Regulator must take all reasonable steps to ensure that a decision is made on the application: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.19H in relation to the application—within 90 days after the applicant gave the Regulator the information; or (b) in any other case—within 90 days after the application was made. (4) If the Regulator makes a decision under subregulation (1), that the facility is taken to cease being a large LPG or LNG consuming facility, the decision is effective on 30 June in the financial year in which the application is made. (5) The Regulator must notify the applicant, in writing, of the Regulator’s decision on the application. 3.19F Conditions for voluntary quotation of OTN For paragraph 58AB(1)(c) of the Act, the conditions are: (a) the recipient is likely to use some or all of the amount of LPG or LNG: (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; or (b) the recipient is a person to whom an amount of LPG or LNG is supplied by a gaseous fuel supplier: (i) during an eligible financial year that begins on or after 1 July 2013; and (ii) for use in the operation of a large LPG or LNG consuming facility mentioned in regulation 3.19A; or (c) the recipient is an approved recipient mentioned in regulation 3.19G for the financial year. 3.19G Approved recipient for voluntary quotation of OTN (1) A person may apply to the Regulator, to be an approved recipient to quote the recipient’s OTN in relation to a supply, in a form approved by the Regulator for this subregulation. Note: For approved recipient, see subregulation (3). (2) An application under subregulation (1) must be accompanied by the following information and documents: (a) the identifying information: (i) for the applicant; and (ii) for the facility for which the application is made; (b) if the applicant is not the person with operational control of the facility: (i) the contact details of the person with operational control of the facility for which the application is made; and (ii) a statement describing the applicant’s relationship to that person; and (iii) a statement describing the applicant’s relationship to the facility; (c) the financial year to which the application relates; (d) a statement that: (i) the facility for which the application is made will be under the operational control of the applicant or the person with operational control of the facility in the financial year to which the application relates; and (ii) the total amount of covered emissions from the combustion of LPG or LNG attributable to the facility during the financial year is likely to have a CO2‑e of 25,000 tonnes or more; (e) if the applicant is currently supplied LPG or LNG for use at the facility—a statement to that effect; (f) if the applicant is not currently supplied LPG or LNG for use at the facility—a statement to that effect and the reason why the applicant expects to start being supplied LPG or LNG for use at a facility within 12 months commencing on the later of: (i) 1 July 2013; and (ii) the day on which the application is made; (g) documents that verify the information given to the Regulator under paragraph (e) or (f). (3) The Regulator may decide that the applicant is an approved recipient for the purposes of paragraph 3.19F(c), for a financial year specified in the application, if the Regulator is satisfied that: (a) the facility is likely to be under the operational control of the applicant or the person mentioned in subparagraph (2)(b)(i) in the financial year; and (b) the applicant is currently supplied LPG or LNG by one or more gaseous fuel suppliers or is likely to be supplied the LPG or LNG by one or more suppliers in the period mentioned in paragraph (2)(f); and (c) it is likely that the total amount of covered emissions from the operation of the facility of the applicant during the financial year attributable to the combustion of LPG or LNG will have a CO2‑e of 25,000 tonnes or more. (4) The Regulator must take all reasonable steps to ensure that a decision is made on the application: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.19H in relation to the application—within 90 days after the applicant gave the Regulator the information or documents; or (b) in any other case—within 90 days after the application was made. (5) The Regulator must notify the applicant, in writing, of the Regulator’s decision on the application. 3.19H Request for further information (1) In considering an application under regulation 3.19C, 3.19E or 3.19G, the Regulator may, by written notice, require the applicant to give the Regulator, within the period specified in the notice, further information or documents in connection with the application. (2) If the applicant fails to provide the information or documents, the Regulator may, by written notice given to the applicant: (a) refuse to consider the application; or (b) refuse to take any action, or any further action, in relation to the application. 3.19J Conditions for acceptance of quotation of OTN in relation to supply of LPG or LNG For paragraphs 59(3A)(b) and 60(3A)(b) of the Act, the condition is that the OTN holder, by written notice given to the gaseous fuel supplier, declares that the quotation is a quotation under section 58AB for an amount of LPG or LNG the OTN holder will use: (a) as feedstock; or (b) in such a way as to not emit any greenhouse gases. Division 5—Designated joint ventures 3.20 Application for declaration (1) This regulation is made for subparagraphs 68(4)(c)(ii) and (iii) of the Act. (2) An application must be accompanied by the following: (a) the identifying information for: (i) each applicant; and (ii) the person who has operational control over the facility (the operator) of the facility; (b) the identifying information for the facility; (c) a statement that: (i) the joint venture has the facility; and (ii) the applicants are parties to an agreement that deals with the facility; and (iii) the operator operates the facility exclusively for the joint venture; and (iv) none of the applicants is an individual; and (v) the joint venture is not a mandatory designated joint venture; (d) a statement that the applicants have, and are likely to continue to have, the capacity, access to information and financial resources necessary for the applicants to comply with their obligations under the Act and the associated provisions if the declaration is made; (e) a statement as to whether any of the applicants has previously been subject to obligations under the Act or the associated provisions and, if so, whether the applicant: (i) has been convicted of an offence against the Act or the associated provisions; or (ii) has previously been liable, or is currently liable, to pay an amount of late payment penalty and, if so, the amount of the penalty and the financial year when the penalty became payable; (f) a statement that the joint venture is an unincorporated enterprise carried on by 2 or more persons in common otherwise than in partnership; (g) if the applicants want the declaration to start on a different day from the day when the declaration is made: (i) a statement by the applicants specifying the start day of the declaration; and (ii) the written consent of the operator for the declaration to start on that day. (3) Also, the application must be accompanied by: (a) documents that verify the information given to the Regulator under paragraphs (2)(c) to (f); or (b) with the consent of the Regulator—a statutory declaration that verifies that information. 3.21 Making of declaration (1) This regulation is made for paragraph 70(3)(d) of the Act. (2) The Regulator must not make a declaration of a designated joint venture if a liability transfer certificate exists in relation to the facility. 3.22 Application for participating percentage determination (1) This regulation is made for paragraph 74(3)(c) of the Act. (2) An application must be accompanied by the following: (a) the participating percentage that is proposed for each of the applicants, or the proposed way of calculating the participating percentage for each of the applicants; (b) a statement as to whether the joint venture is to operate using: (i) a share of goods basis; or (ii) a share of services basis; or (iii) another basis stated in the document; (c) if a share of goods basis, or share of services basis, is to be used: (i) how the goods or services are to be shared between the applicants; and (ii) if the goods or services are not of the same type (e.g. one applicant is to take oil and another applicant is to take gas)—the monetary value of the goods or services, and how the value is calculated; (d) if another basis is to be used—the way in which the economic benefits from the facility are to be shared among the applicants; (e) if the application relates to a mandatory designated joint venture: (i) the identifying information for each applicant; and (ii) the identifying information for the facility; and (iii) a statement that the joint venture has the facility; and (iv) a statement that the applicants are parties to an agreement that deals with the facility; and (v) a statement that the joint venture is an unincorporated enterprise carried on by 2 or more persons in common otherwise than in partnership; and (vi) a statement that 2 or more persons in the joint venture are able to satisfy paragraph 11(1)(a) of the NGER Act; and (vii) a statement that no particular person in the joint venture has the greatest authority to introduce and implement the policies mentioned in subparagraph 11(1)(a)(i) or (iii) of the NGER Act in relation to the facility; and (viii) a statement that no declaration under section 55 or 55A of the NGER Act applies in relation to the facility. (3) Also, the application must be accompanied by: (a) documents that verify the information given to the Regulator under subregulation (2); or (b) with the consent of the Regulator—a statutory declaration that verifies that information. (4) For paragraph (2)(a), the document may state a distribution that varies from time to time. (5) In this regulation: share of goods basis means the basis that each applicant has a share of the goods extracted, produced or manufactured in relation to the operation of the facility. share of services basis means the basis that each applicant has a share of access to services in relation to the operation of the facility. Division 6—Liability transfer certificates 3.23 Application for liability transfer certificate—transfer of liability to another member of a corporate group (1) This regulation is made for subparagraphs 81(4)(c)(iv) and (v) of the Act. (2) An application must be accompanied by the following: (a) the identifying information for: (i) the applicant; and (ii) the person who has operational control over the facility (the operator); and (iii) the controlling corporation of the corporate group; (b) the identifying information for the facility; (c) a statement confirming that: (i) the applicant is a company that is a member of the controlling corporation’s group of which the operator is a member; and (ii) the applicant is a company that is registered under Part 2A.2 of the Corporations Act 2001; and (d) a statement, signed by the operator, confirming that the facility is under the operational control of the operator; (e) a statement that the applicant has, and is likely to continue to have, the capacity, access to information and financial resources necessary for the applicant to comply with their obligations under the Act and the associated provisions if the liability transfer certificate is issued; (f) if the applicant wants the declaration to start on a different day from the day when the declaration is made: (i) a statement by the applicant specifying the start day of the certificate; and (ii) the written consent of the operator for the certificate to start on that day; (g) the written consent of the operator to the applicant making the application; (h) the written acknowledgement by the operator of the operator’s guarantee under section 138 of the Act. (3) Also, the application must be accompanied by: (a) documents that verify the information given to the Regulator under paragraphs (2)(c) to (e); or (b) with the consent of the Regulator—a statutory declaration that verifies that information. 3.24 Application for liability transfer certificate—transfer of liability to a person who has financial control of a facility (1) This regulation is made for subparagraphs 85(5)(c)(iv) and (v) of the Act. (2) An application must be accompanied by the following: (a) the identifying information for: (i) the applicant; and (ii) the person who has operational control over the facility (the operator); and (iii) if the operator is a member of a corporate group and is not the controlling corporation of the group—the controlling corporation of the corporate group; (iv) if the applicant is a member of a corporate group and is not the controlling corporation of the group—the controlling corporation of the corporate group; (b) the identifying information for the facility; (c) a statement that: (i) the facility is under the operational control of the operator; and (ii) the applicant has financial control over the facility, and which paragraph of subsection 92(1) of the Act describes the reason why the applicant has financial control; and (iii) the applicant is not an individual; and (iv) the applicant is not a foreign person; and (v) if the applicant is a member of a controlling corporation’s group—the operator is not a member of the group; (d) a statement that the applicant has, and is likely to continue to have, the capacity, access to information and financial resources necessary for the applicant to comply with their obligations under the Act and the associated provisions if the liability transfer certificate is issued; (e) if the applicant wants the declaration to start on a different day from the day when the declaration is made: (i) a statement by the applicant specifying the start day of the certificate; and (ii) the written consent for the certificate to start on that day from the persons mentioned in subparagraphs 88(2)(b)(iii), (iv) and (v) of the Act; (f) if applicable: (i) the written consent of the person required under subsection 85(3) of the Act to the applicant making the application; (ii) the written consent of the person required under subsection 85(4) of the Act to the applicant making the application; (iii) the written acknowledgement by the controlling corporation of the controlling corporation’s guarantee under section 138 of the Act. (3) Also, the application must be accompanied by: (a) documents that verify the information given to the Regulator under paragraphs (2)(c) to (d); or (b) with the consent of the Regulator—a statutory declaration that verifies that information. 3.25 Issue of liability transfer certificate (1) This regulation is made for paragraphs 83(3)(c) and 87(3)(c) of the Act. (2) The Regulator must not issue a liability transfer certificate if either of the following exists in relation to the facility: (a) a mandatory designated joint venture; (b) a declared designated joint venture. Division 7—Opt‑in Scheme Subdivision 7.1—Preliminary 3.29 Opt‑in Scheme (1) This is the Opt‑in Scheme for Division 7 of Part 3 of the Act. (2) The Scheme provides when a designated opt‑in person will be a liable entity in relation to the acquisition, manufacture or importation of specified taxable fuel. 3.30 Definitions For this Division: designated opt‑in person is a person declared by the Regulator under regulation 3.37 as the person who is taken to be the designated opt‑in person in relation to an opt‑in amount. eligibility test means the test specified in regulation 3.32. enterprise has the same meaning as in the Fuel Tax Act 2006. entity has the same meaning as in the Fuel Tax Act 2006. Note: See also regulation 3.31 (when an entity is entitled to a fuel tax credit). GST Act means the A New Tax System (Goods and Services Tax) Act 1999. joint venture operator, of a GST joint venture, has the same meaning as in the Fuel Tax Act 2006. opt‑in amount, in relation to a designated opt‑in person, means: (a) the amount of specified taxable fuel for a financial year declared by the Regulator in relation to the person under regulation 3.37; or (b) if a variation is in effect in relation to the person under regulation 3.42 for a particular financial year—the amount of specified taxable fuel mentioned in the variation for the financial year. participant, in a GST joint venture, has the same meaning as in the Fuel Tax Act 2006. provisional emissions number means the number specified in subregulation 3.43(2). representative member, of a GST group, has the meaning given by section 195‑1 of the GST Act. specified taxable fuel means taxable fuel of a kind specified for the Opt‑in Scheme under regulation 3.33. threshold test means the test specified in regulation 3.34. 3.31 When an entity is entitled to a fuel tax credit For the purposes of this Division, in determining whether an entity is entitled to a fuel tax credit in respect of an acquisition, manufacture or import of an amount of taxable fuel, disregard section 41‑30 of the Fuel Tax Act 2006. 3.32 Eligibility test (1) A person passes the eligibility test in relation to an acquisition, manufacture or import of specified taxable fuel during a financial year if: (a) in a case where: (i) the designated opt‑in person was a member of a GST group at the start of the financial year; and (ii) if it were assumed that the fuel had been acquired, manufactured or imported at the start of the financial year—the entity that would have been entitled to a fuel tax credit in relation to that acquisition, manufacture or import would have consisted of the members of the GST group; the fuel was acquired, manufactured or imported by a person who was a member of the GST group as at the start of the financial year; or (b) in a case where: (i) the designated opt‑in person was a participant in a GST joint venture, or the joint venture operator of a GST joint venture, at the start of the financial year; and (ii) if it were assumed that the fuel had been acquired, manufactured or imported at the start of the financial year—the entity that would have been entitled to a fuel tax credit in relation to that acquisition, manufacture or import would have consisted of the participants in the GST joint venture or the joint venture operator of a GST joint venture; the fuel was acquired, manufactured or imported by a person who was a participant in the GST joint venture, or the joint venture operator of a GST joint venture, as at the start of the financial year; or (c) in any other case—the designated opt‑in person is the entity that was entitled to a fuel tax credit in relation to that acquisition, manufacture or import. (2) For the purposes of subparagraphs (1)(a)(ii) and (b)(ii), in determining the entity that would have been entitled to a fuel tax credit in relation to an acquisition, manufacture or import of specified taxable fuel, disregard: (a) so much of subsection 70‑5(2) of the Fuel Tax Act 2006 as does not consist of the table; and (b) column 2 of the table in that subsection. 3.33 Specified taxable fuel Taxable fuel specified for the Opt‑in Scheme is liquid petroleum fuel. 3.34 Threshold test (1) An applicant passes the threshold test if: (a) the requirements in subregulation (2) are met by: (i) if the applicant is applying to be a designated opt‑in person on behalf of a GST group—the GST group; or (ii) if the applicant is applying to be designated opt‑in person on behalf of a GST joint venture—the GST joint venture; or (iii) in any other case—the applicant; or (b) the applicant: (i) is a liable entity on the Information Database on 30 June of the financial year before an application is given to the Regulator; or (ii) is a liable entity on the Information Database on the day the application is given to the Regulator; or (iii) is likely to have operational control over a facility that is likely to meet one of the threshold tests mentioned in Division 2 of Part 3 of the Act in the financial year in which the applicant requests the declaration under regulation 3.37 to have effect; or (iv) is likely to be a participant in a designated joint venture that has a facility that is likely to meet one of the threshold tests mentioned in Division 2 of Part 3 of the Act in the financial year in which the applicant requests the declaration under regulation 3.37 to have effect; or (v) holds a liability transfer certificate for a facility that is likely to meet one of the threshold tests mentioned in Division 2 of Part 3 of the Act in the financial year in which the applicant requests the declaration under regulation 3.37 to have effect. (2) For paragraph (1)(a), the requirements are: (a) the fuel user has used an amount of eligible threshold fuel that has the potential greenhouse gas emissions embodied in the fuel having a CO2‑e of 25,000 tonnes or more in either of the two previous financial years before the applicant requests the declaration under regulation 3.37 to have effect; or (b) the fuel user is likely to use an amount of eligible threshold fuel that has the potential greenhouse gas emissions embodied in the fuel having a CO2‑e of 25,000 tonnes or more in the financial year in which the applicant requests the declaration under regulation 3.37 to have effect. (3) In this regulation: eligible threshold fuel means specified taxable fuel that: (a) if not covered by this Scheme, would be subject to a carbon reduction that is more than zero under section 43‑8 of the Fuel Tax Act 2006; or (b) is subject to a carbon component rate under section 6FA or 6FB of the Excise Tariff Act 1921. Note: The reference to sections 6FA and 6FB of the Excise Tariff Act 1921 includes a reference to those sections as they have effect in relation to rates of duties of custom because of section 19A of the Customs Tariff Act 1995. fuel user means the GST group, GST joint venture or applicant mentioned in subparagraph (1)(a)(i), (ii) or (iii). Subdivision 7.2—Application for designated opt‑in person 3.35 Who may apply to be designated opt‑in person A person may apply to the Regulator for a declaration to be taken to be a designated opt‑in person in relation to an amount of specified taxable fuel if: (a) the person: (i) is not an individual; and (ii) is not a foreign person; and (b) for an application in relation to fuel acquired, manufactured or imported by members of a GST group—the person is the representative member of the GST group; and (c) for an application in relation to fuel acquired, manufactured or imported by participants in a GST joint venture—the person is the joint venture operator of the GST joint venture; and (d) for an application in relation to fuel acquired, manufactured or imported by the person—the person is: (i) the entity that was entitled to a fuel tax credit in relation to the fuel; or (ii) a member of a GST group that is entitled to a fuel tax credit in relation to the fuel. 3.36 Application for designated opt‑in person (1) An application to be a designated opt‑in person must be: (a) in a form approved by the Regulator for this paragraph; and (b) for a financial year that begins on or after 1 July 2013; and (c) given to the Regulator on or before 31 March of the financial year before the financial year in which the declaration is to have effect. (2) The application must include the following information: (a) evidence that the applicant: (i) is not an individual; and (ii) is not a foreign person; (b) the identifying information for: (i) the applicant; and (ii) if the application is in relation to fuel acquired, manufactured or imported by members of a GST group or by participants in a GST joint venture—each member of the applicant’s GST group or participant in the applicant’s GST joint venture; and (iii) if the application is in relation to fuel acquired, manufactured or imported by the person—the entity that is entitled to a fuel tax credit in relation to that acquisition, manufacture or import; (c) evidence that the applicant is likely to pass the eligibility test in the financial year in which the applicant requests the declaration to have effect; (d) evidence that the applicant passes the threshold test; (e) the financial year from which the applicant requests the declaration is to have effect. (3) The application must also include consent in accordance with regulation 3.47, if the applicant is: (a) the representative member of a GST group; or (b) the joint venture operator of a GST joint venture; or (c) a person who acquires, manufactures or imports the fuel and is a member of a GST group that is entitled to a fuel tax credit in relation to that fuel. Subdivision 7.3—Declaration of designated opt‑in person 3.37 Declared person is designated opt‑in person (1) The Regulator must declare that a person is taken to be a designated opt‑in person in relation to the opt‑in amount mentioned in subregulation (2), with effect from the financial year after the declaration is made, if the Regulator is satisfied that: (a) the person is a person who may apply to be a designated opt‑in person under regulation 3.35; and (b) the application meets the requirements mentioned in regulation 3.36; and (c) if consent is required under subregulation 3.36(3)—the person has obtained that consent; and (ca) if the applicant provided consent in accordance with subparagraph 3.47(1)(a)(ii): (i) the application includes consent for each member of the GST group required by subparagraph 3.47(1)(a)(ii) to provide consent; and (ii) the members of the GST group mentioned in the application would be able to make any payment guaranteed under subregulation 3.47(3) if required to do so; and (d) the person passes the threshold test mentioned in subregulation 3.34(1); and (e) the person is likely to pass the eligibility test for the financial year the person has requested the declaration to have effect; and (f) the amount, or part of the amount, of specified taxable fuel to be declared to be the opt‑in amount for the person has not been declared to be an opt‑in amount for another person for that financial year. (2) The opt‑in amount for a designated opt‑in person is the amount set out in the table. |
(3) A declaration under subregulation (1) remains in effect until the Regulator decides the person is no longer a designated opt‑in person in accordance with regulation 3.45. (4) However, the opt‑in amount in relation to which a person is declared a designated opt‑in person may be varied under regulation 3.42 for a particular financial year. (5) If the Regulator makes a declaration under subregulation (1), within 14 days of making the declaration, the Regulator must give a copy of the declaration to: (a) the person who is declared to be a designated opt‑in person; and (b) the persons mentioned in subparagraphs 3.36(2)(b)(ii) and (iii); and (c) the Commissioner for Taxation; and (d) the Chief Executive Officer of Customs. 3.38 Applications not considered (1) If an applicant does not satisfy regulation 3.35, the Regulator must: (a) refuse to consider the application; or (b) refuse to take any action, or any further action, in relation to the application. (2) The Regulator must give written notice to the applicant within 14 days of making the decision that the applicant does not satisfy regulation 3.35. 3.39 Request for further information or documents (1) In considering an application under regulation 3.36 or 3.41, the Regulator may, by written notice to an applicant, require the applicant to give the Regulator further information or documents in connection with the application within 14 days after the day the notice is given. (2) If the applicant fails to provide the information or documents, the Regulator may make a decision on the basis of the information that is available to the Regulator. 3.40 Timeframes for declaration to be made The Regulator must take all reasonable steps to ensure that a decision is made on an application given to the Regulator under regulation 3.36: (a) if the Regulator requires the applicant to give further information or documents under regulation 3.39 in relation to the application—within 90 days after the applicant gave the Regulator the information; or (b) in any other case—within 90 days after the application was given to the Regulator. Subdivision 7.4—Variation to declaration of designated opt‑in person 3.41 Application to vary declaration in relation to opt‑in amount (1) A designated opt‑in person who is a representative member of a GST group may apply to the Regulator to have the opt‑in amount for the person varied in relation to an amount of fuel acquired, manufactured or imported by a member of the person’s GST group (the member). (2) An application for a variation must: (a) be given to the Regulator: (i) in a form approved by the Regulator for this subparagraph; and (ii) within 28 days of the member no longer satisfying the membership requirement mentioned in paragraph 48‑10(1)(b) of the GST Act; and (b) include the following information and documents for the member the application relates to: (i) identifying information for the member; (ii) evidence that the member no longer satisfies the membership requirement mentioned in paragraph 48‑10(1)(b) of the GST Act; (iii) the day on which the member ceased to satisfy the membership requirement. 3.42 Variation to declaration (1) The Regulator may vary the declaration in relation to a designated opt‑in person, by excluding an amount mentioned in subregulation (2) from the person’s opt‑in amount, if the Regulator is satisfied that: (a) the fuel of the member was included in the designated opt‑in person’s opt‑in amount for the financial year in which the application for the variation is given to the Regulator; and (b) the member no longer satisfies the membership requirement mentioned in paragraph 48‑10(1)(b) of the GST Act. (2) The amount a Regulator may exclude from an opt‑in amount is the amount of any specified taxable fuel acquired, manufactured or imported by the member of the GST group on and after the day mentioned in the variation. (3) If the Regulator decides to vary a declaration under subregulation (1), the opt‑in amount for the designated opt‑in person is varied from the day mentioned in the variation until the end of the financial year in which the application for variation is given to the Regulator. (4) The day mentioned in the variation may be a day before the variation is made by the Regulator. (5) Within 14 days of making a variation the Regulator must give a copy of the variation to: (a) the designated opt‑in person; and (b) the member; and (c) the Commissioner for Taxation; and (d) the Chief Executive Officer of Customs. Subdivision 7.5—Designated opt‑in person as liable entity 3.43 Liability for emissions (1) The designated opt‑in person’s preliminary emissions number, for the purposes of the Scheme, for a financial year is the potential greenhouse gas emissions embodied in the opt‑in amount (in CO2‑e tonnes) for the designated opt‑in person if all of the following conditions are met: (a) during an eligible financial year, a person acquires, manufactures or imports an amount of specified taxable fuel; (b) an entity is entitled to a fuel tax credit in relation to that acquisition, manufacture or import; (c) a person is declared to be a designated opt‑in person in relation to some or all of the amount of specified taxable fuel mentioned in paragraph (a); (d) the designated opt‑in person passes the eligibility test. (2) If a designated opt‑in person has one or more preliminary emissions numbers for an eligible financial year then, for the purposes of the Act: (a) the sum of those preliminary emissions numbers is a provisional emissions number of the designated opt‑in person for the eligible financial year; and (b) the designated opt‑in person is a liable entity for the eligible financial year. 3.44 Reduction of provisional emissions number (1) If a person: (a) is a designated opt‑in person; and (b) under the scheme, the person has a provisional emissions number for an eligible financial year; that provisional emissions number is to be reduced (but not below zero) by the number mentioned in subregulation (2). (2) The number is the potential greenhouse gas emissions, in CO2‑e tonnes, embodied in the amount of specified taxable fuel: (a) that is covered by a carbon reduction of zero under paragraph 43‑8(4)(b), (c) or (d) of the Fuel Tax Act 2006; or (b) for which a carbon component rate under section 6FA or 6FB of the Excise Tariff Act 1921 does not apply. Note: The reference to sections 6FA and 6FB of the Excise Tariff Act 1921 includes a reference to those sections as they have effect in relation to rates of duties of custom because of section 19A of the Customs Tariff Act 1995. 3.45 Opting out of Scheme (1) The Regulator may decide that a person is no longer a designated opt‑in person if: (a) the person notifies the Regulator that the person wants to opt‑out of the Scheme, in a form approved by the Regulator for this paragraph, on or before the 31 May preceding the financial year the person requests the decision to have effect; or (b) the person does not lodge a report in accordance with regulation 3.48; or (c) the Regulator is not satisfied for the financial year the decision is to have effect that: (i) the person meets the requirements of regulation 3.35; or (ii) the person passes the eligibility test; or (iii) if the person passed the threshold test under paragraph 3.34(1)(a)—the person, the person’s GST group or the person’s GST joint venture are likely to use an amount of specified taxable fuel with the potential greenhouse gas emissions embodied in the fuel having a CO2‑e of 25,000 tonnes or more; or (iv) if the person passed the threshold test under subparagraph 3.34(1)(b)(i), (ii), (iv) or (v)—the person is likely to be a liable entity on the Information Database other than as a designated opt‑in person; or (v) if the person passed the threshold test under subparagraph 3.34(1)(b)(iii)—the person is likely to have operational control over a facility that is likely to meet one of the threshold tests mentioned in Division 2 of Part 3 of the Act; or (d) an amount of unit shortfall charge the designated opt‑in person is liable for remains unpaid for more than 30 days after it becomes due for payment; or (e) the designated opt‑in person has become an externally‑administered body corporate within the meaning of the Corporations Act 2001; or (f) the designated opt‑in person has not provided the consent required in accordance with subregulation 3.47(2) or (2A); or (g) if, under subparagraph 3.47(1)(a)(ii), consent was provided by a member of a GST group with more than 20 members—any member who provided consent has become an externally‑administered body corporate within the meaning of the Corporations Act 2001. (2) If the Regulator makes a decision under paragraph (1)(a), the decision: (a) must be made on or before the 30 June of the financial year before the decision is to have effect; and (b) is taken to have effect from 1 July of the following financial year. (3) If the Regulator makes a decision under paragraph (1)(b), (c), (d), (e) or (f) the decision has effect from the day specified in the notice of the decision. (4) Within 14 days of making a decision, the Regulator must give a copy of the decision to: (a) the person that is no longer a designated opt‑in person; and (b) the persons mentioned in subparagraphs 3.36(2)(b)(ii) and (iii); and (c) the Commissioner for Taxation; and (d) the Chief Executive Officer of Customs. 3.46 Request for further information or documents for decision to opt‑out of Scheme (1) Before making a decision under paragraph 3.45(1)(c), the Regulator may, by written notice to an applicant, require a designated opt‑in person to give the Regulator further information or documents, in relation to the matters mentioned in the paragraph, within 14 days after the day the notice is given. (2) If the designated opt‑in person fails to provide the information or documents within 14 days after the day the notice is given, the Regulator may make a decision under subregulation 3.45(1) that the person is no longer a designated opt‑in person. 3.47 Consent to be liable entity (1) The following persons must provide consent for an applicant to be a designated opt‑in person, in a form approved by the Regulator for this regulation: (a) if the applicant is the representative member of a GST group—either: (i) each member of the GST group of which the applicant is a member; or (ii) if the applicant is a representative member of a GST group with more than 20 members—each member of the GST group that acquires, manufactures or imports fuel that will be included in the designated opt‑in person’s opt‑in amount; (b) if the applicant is the joint venture operator of a GST joint venture—each participant of the GST joint venture of which the applicant is an operator; (c) if the applicant is a member of a GST group that is entitled to a fuel tax credit—the representative member of the GST group. (2) If: (a) a declaration has been made under regulation 3.37; and (b) during a financial year: (i) for a designated opt‑in person who provided consent in accordance with paragraph (1)(a) or (b)—a member or participant joins the person’s GST group or GST joint venture; and (ii) for a designated opt‑in person who provided consent in accordance with paragraph (1)(c)—the representative member of the person’s GST group changes; and (c) the member, participant or representative member (the consenter) has not provided consent for the person to be the designated opt‑in person for the GST group or GST joint venture; the designated opt‑in person must, in the form approved by the Regulator, provide the consent of the consenter to the Regulator before the end of the financial year in which the consenter joined the designated opt‑in person’s GST group or GST joint venture. (2A) If: (a) a declaration has been made under regulation 3.37 for a representative member of a GST group that has more than 20 members; and (b) during a financial year a member of the GST group at the time of the declaration begins to acquire, manufacture or import fuel that will be included in the person’s opt‑in amount; and (c) the member has not provided consent for the representative member to be the designated opt‑in person for the GST group; the designated opt‑in person must, in the form approved by the Regulator, provide the consent of the member to the Regulator within 28 days of becoming aware that the member’s fuel will be included in the person’s opt‑in amount. (3) The consenter who provides consent for the designated opt‑in person to be the designated opt‑in person for the GST group, GST joint venture or GST group member is taken to have guaranteed the payment the designated opt‑in person may become liable for in relation to: (a) an amount of unit shortfall charge calculated from a designated opt‑in person’s provisional emissions number; and (b) an amount payable under section 135 of the Act because of the late payment of an amount covered by paragraph (a). (3A) The guarantee mentioned in subregulation (3) is taken to apply: (a) if the applicant provided consent in accordance with paragraph 3.47(1)(c)—for any financial year the consenter is the representative member of the designated opt‑in person’s GST group; and (b) in any other case—for any financial year the consenter’s fuel is included in the designated opt‑in person’s opt‑in amount. (4) If the designated opt‑in person does not pay the amounts mentioned in paragraph (3)(a) or (b), each consenter who is taken to have guaranteed the payment is jointly and severally liable to pay the amounts. (5) To avoid doubt, the provision of consent by particular members of a GST group under subparagraph (1)(a)(ii) does not affect the application of any other provision in this Division to any other member of the GST group who has not provided consent. Subdivision 7.6—Notification, reporting and record keeping requirements 3.48 Reporting requirement (1) A designated opt‑in person must give a report to the Regulator for each financial year after the person is declared to be a designated opt‑in person by 14 July of each year in a form approved by the Regulator for this subregulation. (2) The report must provide the following information in relation to the current financial year for which the designated opt‑in person is a liable entity: (a) evidence that the person: (i) meets the requirements of regulation 3.35; and (ii) passes the eligibility test for the financial year; (b) the name of the entity that is entitled to a fuel tax credit in relation to the person’s opt‑in amount for the financial year; (c) if the designated opt‑in person applied as a representative member or joint venture operator—the identifying information for the members of the GST group or the participants in the GST joint venture, at the start of the financial year for which the designated opt‑in person is liable. (3) However, a report is not required to be provided to the Regulator for the first financial year the person is declared to be a designated opt‑in person. 3.49 Record keeping requirement A designated opt‑in person must keep records of any information or documents that are provided to the Regulator for the purposes of this Scheme for 5 years after the record is given to the Regulator. 3.50 Notification of changes requirement A designated opt‑in person must notify the Regulator within 14 days of the person becoming aware that: (a) if the person applied in relation to fuel acquired, manufactured or imported by the person: (i) the entity that is entitled to a fuel tax credit in relation to the opt‑in amount for the person has changed; or (ii) if the person is a member of a GST group—the representative member of the person’s GST group has changed; and (b) if the person applied as a representative member of a GST group or joint venture operator of a GST joint venture—the person is no longer a representative member of the GST group or the GST joint venture operator; and (c) the person becomes an externally‑administered body corporate within the meaning of the Corporations Act 2001; and (d) the identifying information for the designated opt‑in person that was given to the Regulator has changed; and (e) if the person applied as a representative member of a GST group with more than 20 members—a member that provided consent for the designated opt‑in person: (i) no longer acquires, manufactures or imports fuel included in the designated opt‑in person’s opt‑in amount; or (ii) has changed the member’s identifying information; or (iii) has become an externally‑administered body corporate within the meaning of the Corporations Act 2001; or (iv) no longer satisfies the membership requirement mentioned in paragraph 48‑10(1)(b) of the GST Act; and (f) if the person applied as a representative member of a GST group with more than 20 members—a member of the person’s GST group: (i) who was a member of the person’s GST group at the time of declaration under regulation 3.37; and (ii) who has not provided consent for the person to be the designated opt‑in person for the GST group; begins to acquire, manufacture or import fuel that will be included in the person’s opt‑in amount. Part 4—Carbon units Division 3—Property in, and transfer of, carbon units 4.5 Transmission of carbon units by operation of law etc. (1) This regulation is made for paragraph 106(3)(b) and subsection 106(4) of the Act. (2) A declaration of transmission of carbon units must: (a) be made in writing; and (b) be signed by the transferee; and (c) state the identification numbers of the carbon units; and (d) state a brief description of the circumstances that resulted in the transmission; and (e) state the names and addresses of the transferor and transferee; and (f) state the account number of the transferor’s Registry account; and (g) if the transferee has a Registry account—state the account number of the transferee’s Registry account. Note: If the transferee does not already have a Registry account, see subsection 106(5) of the Act about the request to open a Registry account that must accompany the declaration. (3) The declaration must also be accompanied by a certified copy of a document that shows that the title of the carbon unit has been transferred to the transferee (e.g. a certified copy of a court order), as evidence of the transmission. (4) For subregulation (3), a certified copy of a document is a copy of a document that has been certified as a true copy by: (a) a person mentioned in Schedule 2 to the Statutory Declarations Regulations 1993; or (b) an Australian embassy, Australian high commission or Australian consulate (other than a consulate headed by an honorary consul); or (c) a competent authority under the Convention Abolishing the Requirement of Legalisation for Foreign Public Documents, done at The Hague on 5 October 1961. Note 1: Information about competent authorities under this convention can be found on the Hague Conference on Private International Law’s website at 2: The text of this convention is set out in Australian Treaty Series 1995 No. 11 ([1995] ATS 11). Division 5—Special provisions relating to free carbon units 4.10 Buy‑back of certain free carbon units—specified factor (1) If a request mentioned in subsection 116(2) of the Act is received by the Regulator during a period set out in an item of the table in subregulation (3), this provision applies to the buy‑back of free carbon units in a vintage year for the item. (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. (3) For subregulation (1), the table is the following.
(4) 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.
4.11 Buy‑back of certain free carbon units—day for cancellation and entry removal For paragraph 116(3)(a) of the Act, the day for cancelling a unit and removing the entry from the person’s Registry account is the earlier of: (a) the day on which the Regulator is satisfied that the request is made in accordance with subsection 116(2) of the Act and is one to which subsection 116(1) of the Act applies; and (b) the day that is 5 working days after the day the Regulator receives the request. Part 6—Surrender of eligible emissions units 6.1A How eligible international emissions units are surrendered (1) For paragraph 122(11)(a) of the Act, if an Australian‑issued international unit is surrendered, the Regulator must: (a) transfer the unit to the Australian‑issued international units—surrendered units account and then cancel the unit; and (b) as soon as practicable after the surrender, tell the European Union Transaction Log that the unit has been surrendered; and (c) within 6 months after the day for surrender of the unit, arrange for a European allowance unit in the Commonwealth foreign registry account in the Union Registry to be transferred to the Union allowance deletion account. (2) In this regulation: Commonwealth foreign registry account has the same meaning as in the ANREU Act. day for surrender of the unit is the last day on which the unit may be surrendered to avoid liability for unit shortfall charge in the financial year in relation to which the unit is surrendered. European Union Transaction Log has the same meaning as in the ANREU Regulations. Union allowance deletion account has the same meaning as in the ANREU Regulations. Union Registry has the same meaning as in the ANREU Regulations. 6.1 Surrender restrictions (1) This regulation: (a) is made for subsection 123(1) of the Act; and (b) applies to the following eligible international emissions units: (i) a certified emission reduction (other than a temporary certified emission reduction or a long‑term certified emission reduction); (ii) an emission reduction unit. Note: These eligible international emissions units are defined in the ANREU Act. (2) The surrender of either of those eligible international emissions units is prohibited if the emissions unit is attributable to: (a) the destruction of: (i) trifluoromethane (also known as HFC 23); or (ii) nitrous oxide that is created as a result of producing adipic acid; or (b) a project that includes the production of: (i) nuclear energy; or (ii) hydropower that has a generating capacity of more than 20 MW unless an independent validating entity, using the EU compliance report, has assessed that the project respects the international criteria. (3) In this regulation: Common understanding means the document titled ‘Guidelines on a common understanding of Article 11b(6) of Directive 2003/87/EC as amended by Directive 2004/101/EC’, published by the European Commission. Note: At the commencement of this regulation the Guidelines are available at compliance report means the report in: (a) Annex 1 to the Common understanding; or (b) ‘Australia’s National Guidelines and Procedures for Approving Participation in Clean Development Mechanism Projects’, published by the Australian National Authority for the CDM and JI; or (c) ‘Australia’s National Guidelines and Procedures for Approving Participation in Joint Implementation Projects’, published by the Australian National Authority for the CDM and JI. Note: At the commencement of this regulation: (a) the report mentioned in paragraph (a) is available at and (b) the reports mentioned in paragraphs (b) and (c) are available at validating entity means an entity that is accredited as: (a) a designated operational entity by the Clean Development Mechanism Executive Board established under the Climate Change Convention; or (b) an accredited independent entity by the Joint Implementation Supervisory Committee. international criteria means the criteria set out in Annex 1 to the Common understanding. Joint Implementation Supervisory Committee means the committee established by Article 3 of Decision 9/CMP.1 of the Conference of the Parties serving as the meeting of the Parties to the Kyoto Protocol. Part 7—Jobs and Competitiveness Program Division 2—Formulation of the Jobs and Competitiveness Program 7.1 Jobs and Competitiveness Program For subsection 145(1) of the Act, the Jobs and Competitiveness Program is set out in Schedule 1. Part 8—Coal‑fired electricity generation Division 1—Introduction 8.1 Definitions for Part 8 In this Part: appropriate energy market means: (a) the National Electricity Market within the meaning of the National Electricity Law; or (b) the Wholesale Electricity Market provided for by Part 9 of the Electricity Industry Act 2004 (WA). emissions intensity has the meaning given by section 168 of the Act. historical energy has the meaning given by section 167 of the Act. National Electricity Law means the National Electricity Law set out in the Schedule to the National Electricity (South Australia) Act 1996 (SA). registered auditor means: (a) a company that is an authorised audit company under section 1299C of the Corporations Act 2001; or (b) a person who is a registered auditor under section 1280 of the Corporations Act 2011; or (c) a registered greenhouse and energy auditor, within the meaning of the National Greenhouse and Energy Reporting Act 2007, who is registered in Category 2 or 3 under the National Greenhouse and Energy Reporting Regulations 2008. Division 2—Certificate of eligibility for coal‑fired generation assistance Subdivision 2.1—Information that must accompany application for certificate of eligibility for coal‑fired generation assistance 8.2 Information to accompany applications This subdivision is made for paragraph 163(1)(c) of the Act. 8.3 Information for all applications (1) This regulation sets out information that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex. Note 1: The application is made under section 162 of the Act. Note 2: Other information specified in this Subdivision may also be required for specific applications. (2) The information is: (a) the applicant’s name, address and contact details; and (b) the applicant’s ABN or ACN; and (c) information showing that the applicant owns, controls or operates the generation complex; and (d) information relating to the registration of the generation complex in the appropriate energy market; and (e) the name and specifications of each generation unit that makes up the generation complex; and (f) the location of the generation complex; and (g) information showing whether the generation complex passes the generation complex assistance eligibility test set out in subsection 166(2) of the Act; and (h) the factor that the applicant believes should be specified under section 167 of the Act as the annual assistance factor in respect of the generation complex; and (i) the number that the applicant believes is the historical energy of the generation complex, and the basis on which the applicant has worked out the number, including an explanation of the method of measurement that was applied for the purpose of working out the number; and (j) if the number provided under paragraph (i) is different to the number for the electricity production (within the meaning in subregulation (6)) for the facility which corresponds to the generation complex—an explanation for the difference in the numbers; and (k) the number that the applicant believes is the emissions intensity of the generation complex, and the basis on which the applicant has worked out the number, including: (i) an explanation of any calculations relevant to the number; and (ii) an explanation of the method of measurement that was applied for the purpose of working out the number; and (iii) the assumptions that were made for the purpose of working out the number; and (iv) the reasons for the choice of the methods and assumptions; and (l) if the number provided under paragraph (k) is different to the NGER emissions intensity number worked out in accordance with subregulation (4) for the facility that corresponds to the generation complex—an explanation for the difference in the numbers; and (m) a statement identifying any other information or document that: (i) is, or was, in the possession, or under the control, of the applicant or another person (for example, a coal supplier or an appropriate energy market operator); and (ii) is of significant relevance in verifying, or in helping to verify, the historical energy and emissions intensity of the generation complex. (3) Paragraphs (2)(j) and (l) do not apply if: (a) the explanation for the difference in the numbers is that the numbers were worked out using different units of measurement; and (b) the numbers would be the same if the same unit of measurement was used for both numbers. (4) For paragraph (2)(l), the NGER emissions intensity number for a facility is: where: emissions number is worked out in accordance with subregulation (5). electricity production has the meaning given in subregulation (6). (5) For subregulation (4), the emissions number for a facility is worked out as follows.
(6) In this regulation: electricity production for a facility means the sum of the amounts of electricity produced as reported for the facility under paragraphs 4.20(2)(a), (b) and (c) of the NGER Regulations for the relevant period. relevant period means the period from 1 July 2008 to 30 June 2010. 8.4 Additional information—registered generation complex (1) In addition to regulation 8.3, this regulation sets out information that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex. Note 1: The application is made under section 162 of the Act. Note 2: Other information specified in this Subdivision may also be required for specific applications. (2) The information is the name, and nameplate rating, of the generation complex as published by the appropriate energy market operator as at 1 July 2010. 8.5 Additional information—National Greenhouse and Energy Reporting Scheme (1) In addition to regulation 8.3, this regulation sets out information that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex if: (a) the applicant has provided information (previous information) about the generation complex to the Commonwealth for the purposes of estimating emissions from the generation complex under the National Greenhouse and Energy Reporting Act 2007; and (b) the information relates to the emissions of the generation complex in the period starting on 1 July 2008 and ending on 30 June 2010; and (c) the information is in the applicant’s possession, or under the applicant’s control. Note 1: The application is made under section 162 of the Act. Note 2: Other information specified in this Subdivision may also be required for specific applications. (2) The information is: (a) the previous information; and (b) an explanation of how the previous information relates to the emissions intensity of the generation complex. (3) However, information mentioned in subregulation (2) does not need to be provided under this regulation if the information is contained in a document provided under regulation 8.9. 8.6 Additional information—result of audit report (1) In addition to regulation 8.3, this regulation sets out information that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex if the report of an audit of the application conducted by a registered auditor includes: (a) a qualified reasonable assurance conclusion, in the terms of paragraph 3.17(1)(b) of the National Greenhouse and Energy Reporting (Audit) Determination 2009; or (b) an adverse conclusion, in the terms of paragraph 3.17(1)(c) of that Determination; or (c) a conclusion that the registered auditor is unable to form an opinion about the matter being audited, in the terms of paragraph 3.17(1)(d) of that Determination. Note: The report must accompany the application: see regulation 8.10. (2) The information is the applicant’s comments on the registered auditor’s conclusion. Subdivision 2.2—Documents that must accompany application for certificate of eligibility for coal‑fired generation assistance 8.7 Documents that must accompany applications This subdivision is made for paragraph 163(1)(d) of the Act. 8.8 Documents for all applications (1) This regulation sets out the documents that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex. Note 1: The application is made under section 162 of the Act. Note 2: Other documents specified in this Subdivision may also be required for specific applications. (2) The documents are: (a) a map showing: (i) the location of the generation complex (including the location or position of each generation unit that makes up the generation complex); and (ii) how the generation complex was connected to a grid as described in paragraph 166(2)(a)(iv) of the Act; and (b) any other document that is in the applicant’s possession, or under the applicant’s control, that has been used in the application to calculate: (i) the historical energy of the generation complex; or (ii) the emissions intensity of the generation complex. 8.9 Additional documents—National Greenhouse and Energy Reporting Scheme (1) In addition to regulation 8.8, this regulation identifies a document that must accompany an application for the Regulator to issue a certificate of eligibility for coal‑fired generation assistance in respect of a generation complex if: (a) the applicant has provided a document about the generation complex to the Commonwealth for the purposes of estimating emissions from the generation complex under the National Greenhouse and Energy Reporting Act 2007; and (b) the document relates to the emissions of the generation complex in the period starting on 1 July 2008 and ending on 30 June 2010; and (c) the document, or a copy of the document, is in the applicant’s possession or under the applicant’s control. Note 1: The application is made under section 162 of the Act. Note 2: Other documents specified in this Subdivision may also be required for specific applications. (2) The document or copy must accompany the application. (3) The document or copy must be accompanied by an explanation of how the document relates to the emissions intensity of the generation complex. Subdivision 2.3—Reports that must accompany application for certificate of eligibility for coal‑fired generation assistance 8.10 Audit report for all applications (1) For paragraph 163(1)(e) of the Act, a prescribed report is a report by an independent registered auditor of an audit of an application setting out the auditor’s opinion as to whether: (a) the application properly presents, in all material respects, the historical energy of the generation complex; and (b) the application properly presents, in all material respects, the emissions intensity of the generation complex; and (c) the application discloses, in all material respects, the basis on which the historical energy and emissions intensity have been estimated; and (d) the generation complex passes the generation complex assistance eligibility test set out in subsection 166(2) of the Act. (2) For subregulation (1): audit means an audit conducted in accordance with the relevant requirements for reasonable assurance engagements under the National Greenhouse and Energy Reporting (Audit) Determination 2009. independent registered auditor means a registered auditor who is independent of the applicant or applicants to the extent that a conflict of interest situation (within the meaning of the National Greenhouse and Energy Reporting Regulations 2008) does not arise in relation to the auditing of the application. (3) For the definition of audit, a reference in the definition of misstatement in the National Greenhouse and Energy Reporting (Audit) Determination 2009 to ‘the Act’ or ‘the Regulations’ is to be read as a reference to the Clean Energy Act 2011 and these Regulations. Part 14—Record‑keeping requirements 14.1 Record keeping—applications (1) For subsection 227(1) of the Act, this regulation applies if a person: (a) makes an application to the Regulator under any of the following provisions of the Act: (i) subsection 38(1) (obligation transfer number); (ii) subsection 56(2) (approved person); (iii) subsection 68(2) (declaration of a joint venture); (iv) subsection 74(2) (participating percentage determination); (v) subsection 81(2) (liability transfer certificate—corporate group); (vi) subsection 85(2) (liability transfer certificate—financial control); (vii) section 92A (Opt‑in Scheme); or (b) in connection with the application, gives further information to the Regulator under subregulation 3.17(1) or subsection 39(1), 69(1), 75(1), 82(1), or 86(1) of the Act. (2) When the person makes the application, or gives the further information, the person must make a record of every source document. Example: A scanned copy of the source document. (3) For subregulation (2), a source document is: (a) a document that verifies the information given to the Regulator in, or in connection with, the application; and (b) the original of a document that is copied and given to the Regulator with, or in connection with, the application. (4) The person must keep each record for 5 years after the application is made, or the further information is given. Note: See section 227 of the Act for the penalty that applies to a person who contravenes this regulation. 14.1A Record keeping—notice of intention to quote OTN (1) This regulation applies if a person gives written notice of an intention to quote the person’s OTN to a gaseous fuel supplier in accordance with paragraph 55B(2)(a), 57(2)(a), 58(2)(a), 58AA(2)(a) or 58AB(2)(a) of the Act. (2) When the written notice is given, each of the persons mentioned in subregulation (1) must make a record of the following: (a) the notice; (b) the day on which the notice is given; (c) the number of days between the day on which the notice is given and the day on which the OTN is to be first quoted. Example: For paragraph (a), a scanned copy of the notice. (3) Each of the persons must keep the record for 5 years after the record is made. Note: See section 227 of the Act for the penalty that applies to a person who contravenes this regulation. 14.2 Record keeping—withdrawal of quotation of OTN (1) This regulation applies if a person withdraws the quotation of an OTN that was made to another person, in relation to a supply of natural gas, by giving the other person a written notice under subsection 51(1) or (2) or 52(1) or (2) of the Act. (2) When the written notice is given, each of the persons mentioned in subregulation (1) must make a record of the following: (a) the day on which the notice is given; (b) the reason for withdrawing the quotation; (c) if the notice is given under subsection 52(1) or (2) of the Act—the terms of the agreement to withdraw the quotation; (d) the amount of natural gas supplied in relation to the quotation of the OTN before the notice is given. Example: For paragraph (c), a scanned copy of the written agreement. (3) Each of the persons must keep the record for 5 years after the record is made. Note: See section 227 of the Act for the penalty that applies to a person who contravenes this regulation. 14.3 Record keeping—acceptance of quotation of OTN (1) This regulation applies if a person accepts another person’s quotation of an OTN, in relation to a supply of natural gas, LPG or LNG, by giving the other person a written notice under section 59 or 60 of the Act. (2) When the written notice is given, each of the persons mentioned in subregulation (1) must make a record of the following: (a) the notice; (b) the day on which the notice is given. Example: For paragraph (a), a scanned copy of the notice. (3) When natural gas, LPG or LNG, is supplied in relation to the quotation of the OTN, each of the persons must make a record of the following: (a) the day on which the natural gas, LPG or LNG, is supplied; (b) the amount of natural gas, LPG or LNG, supplied. (4) Each of the persons must keep each record for 5 years after the record is made. Note: See section 227 of the Act for the penalty that applies to a person who contravenes this regulation. 14.4 Record keeping—statutory declaration for exempt supply (1) This regulation applies if a person provides another person a statutory declaration in accordance with subparagraph 3.5F(c)(ii). (2) The importer or producer of the LPG and the recipient of the LPG must retain a copy of the statutory declaration for 5 years after the making of the declaration. 14.5 Record keeping—true‑up shortfalls (1) For subsection 227(1) of the Act, this regulation applies if a designated person for item 351 of Schedule 1 to the Clean Energy Legislation (Carbon Tax Repeal) Act 2014 (the Repeal Act): (a) gives a written report to the Regulator for the purposes of Part 4 of Schedule 1 to the Repeal Act; or (b) in connection with the written report, gives further information to the Regulator in accordance with the rules made under item 359 of the Repeal Act. (2) When the person gives the report or the further information to the Regulator, the person must make a record of every source document for the report or information. (3) For subregulation (2), a source document is a document that verifies the information given to the Regulator in, or in connection with, the report or the further information. (4) The person must keep each record for 5 years after the record is made. Note: See section 227 of the Act for the penalty that applies to a person who contravenes this regulation. Part 21—Review of decisions 21.1A Reviewable decisions—Opt‑in Scheme For item 14 of the table in section 281 of the Act, the decisions of the Regulator under the Opt‑in Scheme in Division 7 of Part 3, set out in the following table, are prescribed. |
21.1B Reviewable decisions—auctioning of carbon units For item 17 of the table in section 281 of the Act, a decision of the Regulator under a subsection 113(1) determination to disqualify a person from participating in an auction of carbon units is prescribed. 21.1 Reviewable 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.
Part 23—Miscellaneous 23.1 Set‑off For subparagraphs 137(1)(b)(ii) and 215(b)(ii) of the Act, the following amounts are specified: (a) an amount payable under section 116 of the Act (buy‑back amount for free carbon units); (b) an amount payable under section 140 of the Act (refund of overpayments of unit shortfall charge or late payment penalty); (c) an amount payable under section 216 of the Act (refund of overpayments of relinquishment penalty or late payment penalty); (d) an amount payable under subsection 268(4) of the Act (refund of penalty if infringement notice withdrawn). Part 24—Application and transitional provisions 24.1 Amendments made by the Clean Energy Legislation Amendment (2014 Measures No. 1) Regulation 2014 The amendments of these Regulations made by items 3 and 4 of Schedule 1 to the Clean Energy Legislation Amendment (2014 Measures No. 1) Regulation 2014 apply in relation to the following applications for the issue of free carbon units in respect of the production of coal char: (a) an application made, but not finally determined, before the commencement of this regulation; (b) an application made on or after the commencement of this regulation. Schedule 1—Jobs and Competitiveness Program (section 7.1) Part 1—Preliminary 101 This is the Jobs and Competitiveness Program. 102 (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. 103 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. 104 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 1—Definitions 201 (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%. category A emissions, in relation to a LNG project: see subclause 915(2). category B emissions, in relation to a LNG project: see subclause 915(2). closed, in relation to equipment: see clause 204. condensate has the same meaning as in the Excise Act 1901. eligible LNG emissions: see subclause 915(4). 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. final LNG emissions number means the number worked out by the Regulator under clause 915 for determining the LNG supplementary allocation adjustment. 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). LNG facility means a facility, other than an upstream LNG facility, where the activity of producing liquefied natural gas is carried on wholly or partly. LNG production activity means the production of liquefied natural gas within the meaning of Division 36 of Part 3. LNG project means a project that involves: (a) either of the following: (i) one or more LNG facilities and one or more upstream LNG facilities, whether or not the facilities are co‑located; (ii) one or more LNG facilities, whether or not the facilities are co‑located; and (b) some or all of the gas mixture containing natural gas that is extracted, transported or handled by the facilities mentioned in paragraph (a) ultimately being transformed into liquefied natural gas at one or more of the LNG facilities. LNG supplementary allocation adjustment: see subclause 914(2). LNG supplementary allocation rules: see Part 9, Division 10. 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). network or pipeline facility means a facility that is in an industry sector mentioned in subregulation 2.20(2) of the NGER Regulations. 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. provisional LNG emissions number means the number worked out by an applicant in accordance with the LNG supplementary allocation rules, other than clause 918. 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. upstream LNG facility means a facility that: (a) meets both of the following criteria: (i) the facility carries on either of the following activities: (A) the extraction of a gas mixture containing natural gas from an upstream geological formation; (B) the transportation or handling, or both, of a gas mixture containing natural gas from the location where it was extracted to a location where it is liquefied; (ii) some or all of the gas mixture containing natural gas that is extracted, transported or handled by the facility is ultimately transformed into liquefied natural gas at a LNG facility that had, on 30 June of the previous financial year, a maximum productive capacity of at least 500 000 tonnes of liquefied natural gas a year; or (b) meets all of the following criteria: (i) the facility does not extract a gas mixture containing natural gas from an upstream geological formation; (ii) the facility is supplied natural gas from a network or pipeline facility; (iii) the facility handles the natural gas before it is transferred to a place where it is to be transformed into liquefied natural gas; (iv) some or all of the natural gas extracted, transported or handled by the facility is ultimately transformed into liquefied natural gas at a LNG facility that had, on 30 June of the previous financial year, a maximum productive capacity of less than 500 000 tonnes of liquefied natural gas a year. (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 2—Meaning of saleable quality 202 (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. Example 1: Metal that is re‑melted in the same equipment in which it was produced. Example 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 3—Meaning of significant expansion 203 (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 4—Meaning of closed 204 (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 5—Meaning of new facility and series of new facilities 205 (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 1—General 301 (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 2—Production of glass containers 302 (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 3—Production of bulk flat glass 303 (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 4—Production of methanol 304 (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 5—Production of carbon black 305 (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 6—Production of white titanium dioxide (TiO2) pigment 306 (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, 2005; 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, 2005; 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 7—Production of silicon 307 (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: SiO2(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 8—Smelting zinc 308 (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 9—Integrated production of lead and zinc 309 (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 (aa) lead metal (Pb) with a concentration of lead of at least 99.5% but less than 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 with a concentration of lead of at least 99.97%, 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 (aa) is not produced from a product mentioned in paragraph (2)(aa); 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. (5A) For the production of lead metal with a concentration of lead of at least 99.5% but less than 99.97%, 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 99.5% but less than 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 10—Aluminium smelting 310 (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 11—Alumina refining 311 (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 12—Production of high purity ethanol 312 (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 13—Production of magnesia 313 (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 14—Manufacture of newsprint 314 (1) The manufacture of newsprint is the chemical or physical transformation, through an integrated process, of any or all of woodchips, sawdust, wood pulp and recovered paper into rolls of coated or uncoated newsprint that: (a) has a grammage range of 30 g/m2 to 80 g/m2; and (b) has a moisture content range of 4% to 11%; and (c) is generally usable for newspaper or publication 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 coated or uncoated newsprint that: (a) has a grammage range of 30 g/m2 to 80 g/m2; and (b) has a moisture content range of 4% to 11%; and (c) is generally usable for newspaper or publication products; the basis for the issue of free carbon units is the total air dried tonnes of rolls of coated or 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 15—Dry pulp manufacturing 315 (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 16—Cartonboard manufacturing 316 (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 17—Packaging and industrial paper manufacturing 317 (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 18—Printing and writing paper manufacturing 318 (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. (5A) For the production of pulp from recovered paper 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 recovered paper; 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 19—Tissue paper manufacturing 319 (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 20—Integrated iron and steel manufacturing Note: Carbon steel, relevant product and saleable quality are explained in Part 2. 320 (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: (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 coke oven coke production mentioned in Division 45. (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. (10) 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. (11) 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. (12) 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. (13) 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. (14) 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 21—Manufacture of carbon steel from cold ferrous feed Note: Carbon steel, relevant product and saleable quality are explained in Part 2. 321 (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 22—Petroleum refining Note: Condensate, eligible petroleum feedstocks, stabilised crude petroleum oil and unleaded petrol are explained in Part 2. 322 (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 23—Production of ethene (ethylene) 323 (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 24—Production of polyethylene 324 (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 25—Production of synthetic rutile 325 (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 26—Production of manganese Note: Saleable quality is explained in Part 2. 326 (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%. (2) The production of manganese is specified as an emissions‑intensive trade‑exposed activity. (3) The production of manganese is a highly emissions‑intensive activity. Note: See Part 4. (4) For the production of manganese sinter, the basis for the issue of free carbon units is by a tonne of manganese sinter that: (a) has a concentration of manganese of at least 40%; and (b) is produced by, or as part of, carrying on the emissions‑intensive trade‑exposed activity; and (c) is of saleable quality. (5) For the production of ferromanganese alloy, the basis for the issue of free carbon units is by a tonne of ferromanganese alloy that: (a) has a concentration of manganese of at least 67%; and (b) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (c) is of saleable quality. (6) For the production of silicomanganese alloy, the basis for the issue of free carbon units is by a tonne of silicomanganese alloy that: (a) has a concentration of manganese of at least 60%; and (b) has a concentration of silicon (Si) of at least 12%; and (c) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (d) is of saleable quality. Division 27—Production of clinker 327 (1) The production of clinker is the physical and chemical transformation of: (a) either or both of calcium carbonate compounds (limestone (CaCO3)) and other calcium carbonate (CaCO3) feedstocks; and (b) any of the following: (i) clay; (ii) clay mixed with one or more feedstocks that contain one or more of the following: (A) silicon dioxide (SiO2); (B) iron (Fe); (C) aluminium oxide (alumina (Al2O3)); (iii) one or more feedstocks that, when combined, contain all of the following: (A) silicon dioxide (SiO2); (B) iron (Fe); (C) aluminium oxide (alumina (Al2O3)); that are fused together at a temperature higher than 1 000 °C into Portland cement clinker. (2) The Portland cement clinker must: (a) have a concentration of calcium silicates of at least 60%; and (b) have a concentration of magnesium oxide (MgO) of not more than 4.5%; and (c) be useable in the making of Portland cement. (3) The production of clinker is specified as an emissions‑intensive trade‑exposed activity. (4) The production of clinker is a highly emissions‑intensive activity. Note: See Part 4. (5) The basis for the issue of free carbon units for the production of clinker is by a tonne of Portland cement clinker on a dry weight basis that: (a) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (b) has a concentration of calcium silicates of at least 60%; and (c) has a concentration of magnesium oxide (MgO) of not more than 4.5%; and (d) is useable in the making of Portland cement; and (e) is of saleable quality. Note: Saleable quality is explained in Part 2. Division 28—Production of lime 328 (1) The production of lime is the physical and chemical transformation, through the calcining process, of calcium and magnesium sources (such as calcium carbonate (CaCO3) and magnesium carbonate (MgCO3)) into lime that has a concentration of either or both of calcium oxide (CaO) and magnesium oxide (MgO) of at least 60%. (2) The production of lime is specified as an emissions‑intensive trade‑exposed activity. (3) The production of lime is a highly emissions‑intensive activity. Note: See Part 4. (4) The basis for the issue of free carbon units for the production of lime is by a tonne of lime on a dry weight basis that: (a) has a concentration of either or both of calcium oxide (CaO) and magnesium oxide (MgO) of at least 60%; and (b) is not a relevant product for the emissions‑intensive trade‑exposed activity of integrated iron and steel manufacturing; and (c) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (d) is of saleable quality. Note: Relevant product and saleable quality are explained in Part 2. Division 29—Production of fused alumina 329 (1) The production of fused alumina is the physical transformation of alumina (aluminium oxide (Al2O3)) by heating it to its fusion point to produce fused alumina that: (a) has an alpha alumina crystalline structure; and (b) has a concentration of aluminium oxide of at least 99.0%. (2) The production of fused alumina is specified as an emissions‑intensive trade‑exposed activity. (3) The production of fused alumina is a highly emissions‑intensive activity. Note: See Part 4. (4) The basis for the issue of free carbon units for the production of fused alumina is by a tonne of fused alumina (aluminium oxide (Al2O3)) that: (a) has an alpha alumina crystalline structure; and (b) has a concentration of aluminium oxide of at least 99.0%; 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 30—Production of copper Note: Saleable quality is explained in Part 2. 330 (1) The production of copper is either or both of the following: (a) the physical and chemical transformation of concentrated mineralised copper compounds into either or both of the following: (i) copper cathode that has a concentration of copper greater than 99.90%; (ii) copper anode that has a concentration of copper: (A) of at least 99.00%; and (B) of not more than 99.90%; (b) the physical and chemical transformation of copper anode into copper cathode that has a concentration of copper greater than 99.90% where the copper anode: (i) has a concentration of copper: (A) of at least 99.00%; and (B) of not more than 99.90%; and (ii) was not produced as part of the transformation in subparagraph (a)(i). (2) For subclause (1), concentrated mineralised copper compounds include: (a) copper sulphide concentrates; and (b) copper electrolyte solution. (3) The production of copper is specified as an emissions‑intensive trade‑exposed activity. (4) The production of copper is a highly emissions‑intensive activity. Note: See Part 4. (5) For the production of copper cathode from concentrated mineralised copper compounds, the basis for the issue of free carbon units is by a tonne of copper cathode that: (a) has a concentration of copper greater than 99.90%; and (b) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (c) is not transformed into copper cathode as part of the transformation mentioned in paragraph (1)(b); and (d) is of saleable quality. (6) For the production of copper anode from concentrated mineralised copper compounds, the basis for the issue of free carbon units is by a tonne of copper anode that: (a) has a concentration of copper: (i) of at least 99.00%; and (ii) of not more than 99.90%; and (b) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (c) is not subsequently transformed into copper cathode as part of the transformation mentioned in subparagraph (1)(a)(i); and (d) is of saleable quality. (7) For the production of copper cathode from copper anode, the basis for the issue of free carbon units is by a tonne of copper cathode that: (a) has a concentration of copper of at least 99.90%; and (b) is produced from copper anode that was not produced (c) is produced by carrying on the emissions‑intensive trade‑exposed activity; and (d) is of saleable quality. Division 31—Production of carbamide (urea) 331 (1) The production of carbamide (urea (CO(NH2)2)) is the chemical transformation of carbon dioxide (CO2) and anhydrous ammonia (NH3) to produce carbamide solution (urea (CO(NH2)2(aq))) that: (a) has a concentration of carbamide (urea (CO(NH2)2)) of at least 80%; and (b) is subsequently used to produce either or both of: (i) carbamide solutions (urea (CO(NH2) 2(aq))); and (ii) granulated, prilled or other solid forms of carbamide (urea (CO(NH2) 2(s))) of saleable quality; |
(b) the Regulator is satisfied that each activity to which the application relates meets the relevant requirements and conditions set out in Part 3; and (c) the Regulator is satisfied that each emissions‑intensive trade‑exposed activity will be carried out at the facility or facilities specified in the application during the financial year to which the application relates; and (d) the applicant has provided the documents required by clause 603; and (e) the Regulator has not made a decision under paragraph 803(2)(b) or (8)(c) to refuse the application; and (f) the Regulator is satisfied that the number of free carbon units to which the applicant or applicants is entitled if the application were approved is greater than zero. (4) For a combined application made by the same applicants for the same activity conducted at the same facility or facilities as an application in the previous financial year, the Regulator must approve the application if the criteria in subclause (3) have been met and: (a) no applicant covered by the application has an outstanding debt mentioned in subclause 808(1); or (b) if an applicant covered by the application has an outstanding debt mentioned in subclause 808(1)—the formula or other arrangement to apportion free carbon units between applicants has not been varied from the previous financial year to reduce the share of units of the applicant with the outstanding debt. (5) The Regulator must refuse the application in any other circumstances. Division 4—Notification of proposed refusal 805 (1) If the Regulator proposes to refuse an application, the Regulator must not make a decision until the Regulator has consulted the applicant in accordance with this clause. (2) However, the Regulator is not required to consult the applicant if the Regulator: (a) has already consulted the applicant in accordance with this clause about the same matter in relation to the same application; or (b) has made a decision under paragraph 803(8)(c). (3) The Regulator must: (a) notify the applicant, in writing, that it proposes to refuse the application; and (b) invite the applicant: (i) to revise the application within 30 days after the date of the invitation; or (ii) to give the Regulator further information or advice about the application within 30 days after the date of the invitation; and (c) inform the applicant that, if the applicant gives the Regulator any further information or advice after the 30 days, the Regulator is not required to consider it. (4) The invitation in paragraph (3)(b) is not an undertaking or guarantee that the Regulator will change the proposed refusal. (5) The Regulator: (a) must take the further information or advice into account if the applicant gives it to the Regulator within the 30 days; and (b) may take the further information or advice into account if the applicant gives it to the Regulator after the 30 days. (6) After the earlier of the applicant giving the Regulator further information or advice and the end of the 30 days, the Regulator must decide: (a) to approve the application under paragraph 804(1)(a); or (b) to refuse the application under paragraph 804(1)(b). Division 5—Notification of decision 806 (1) If the Regulator approves an application, the Regulator must notify the applicant, in writing, as soon as practicable after making the decision. (2) If the Regulator refuses an application after having consulted the applicant in accordance with Division 4, the Regulator must notify the applicant, in writing, as soon as practicable after making the decision. (3) A decision takes effect when it is made. Division 6—Correction of inaccurate allocation of free carbon units 807 (1) If: (a) the Regulator becomes aware that the allocation of free carbon units was incorrect; and (b) the Regulator becomes aware during the year to which the application relates; then the Regulator may make a correction in accordance with this Division. (2) Before making the correction, the Regulator must tell the applicant, in writing, about the proposed correction. (3) If the correction requires the Regulator to allocate additional free carbon units to an applicant, the additional units must be issued in accordance with subclause 902(4). (4) If the incorrect allocation has resulted in an applicant being allocated too many free carbon units, the Regulator must issue a notice to the applicant in accordance with clause 1307 to relinquish a specified number of those units. Division 7—Revision of application where outstanding debt 808 (1) This Division applies if the Regulator is satisfied that: (a) an amount of unit shortfall charge payable by an applicant remains unpaid at the time of the application; or (b) an amount of late payment penalty payable under section 135 of the Act may remain unpaid at the time of the application. (2) The Regulator must notify in writing: (a) if there is one applicant—the applicant; or (b) if the application is a combined application—all the eligible persons covered by the application; that it proposes to reduce the allocation of free carbon units to the applicant with the outstanding debt (the debtor) mentioned in subclause (1), by the amount of the debt. (3) The notice must: (a) invite the debtor to reduce that debt to zero; and (b) ask the debtor to tell the Regulator, within 30 days after receiving the notice, whether the debt has been paid in full. (4) If the debtor has not reduced the outstanding debt to zero within 30 days after being given the notice under subclause (2), the Regulator must reduce the debtor’s allocation of free carbon units in accordance with subclause (5). (5) The debtor’s allocation is to be reduced by the amount worked out as the debtor’s outstanding debt, divided by: (a) for applications for the financial years starting on 1 July 2012, 1 July 2013 or 1 July 2014—the fixed charge for the vintage year set out in subsection 100(1) of the Act; or (b) for applications for any other financial year—the benchmark average auction charge for the previous financial year. Part 9—Method of calculating the number of free carbon units to be issued to a person Division 1—General 901 This Part explains how many free carbon units are to be issued to an applicant whose application is approved. 902 (1) The Regulator must issue the number of units determined in accordance with this Part to the applicant’s Registry account. (2) For applications made in relation to a financial year that is a fixed charge year, the issue of free carbon units must include the following: (a) as soon as practicable after approving the application: (i) 100% of units worked out in relation to: (A) the EPa and NGPa allocations mentioned in clause 906; and (B) previous year adjustments mentioned in clause 906; and (C) maximum cap adjustments mentioned in clause 911; and (D) sub‑threshold emissions adjustments mentioned in clause 912; and (E) adjustments mentioned in clause 913; and (F) LNG supplementary allocation adjustments mentioned in clause 914; and (ii) 75% of units worked out in relation to the EIa allocations mentioned in clause 906; (b) as soon as practicable after the start of the financial year following the vintage year of the carbon units—the remaining 25% of units worked out in relation to the EIa allocations. (2A) However, for an application for the year ending 30 June 2014 relating to an activity mentioned in Division 53 or 54 of Part 3, the adjustments mentioned in sub‑subparagraphs (2)(a)(i)(C) and (D) that would be made if there were an application in respect of the same activity and the same facility or facilities for the financial year 2014‑15, must be made in relation to the financial year 2013‑14. Note: The activities mentioned in Divisions 53 and 54 of Part 3 are the production of ferrovanadium and the rendering of animal by‑products. (3) For applications made in relation to a financial year that is a flexible charge year, 100% of free carbon units must be allocated, as soon as practicable after approving the application, worked out in relation to: (a) the EIa, EPa and NGPa allocations mentioned in clause 906; and (b) previous year adjustments mentioned in clause 906; and (c) maximum cap adjustments mentioned in clause 911; and (d) sub‑threshold emissions adjustments mentioned in clause 912; and (e) adjustments mentioned in clause 913; and (f) LNG supplementary allocation adjustments mentioned in clause 914. (4) If, under clause 807, the Regulator is required to issue additional free carbon units to an applicant because the initial allocation was incorrect, the additional free carbon units must be issued in accordance with subclause (2) or (3) as soon as practicable after the Regulator becomes aware of the incorrect allocation. (5) If the application is a combined application mentioned in clause 703, the Regulator must issue the units according to the formula, or other arrangement, to apportion units set out in the application. (6) If: (a) either: (i) an applicant has an outstanding debt mentioned in subclause 808(1); or (ii) the application is a combined application and one of the applicants has an outstanding debt mentioned in subclause 808(1); and (b) the applicant’s outstanding debt is greater than the allocation worked out using the formula or other arrangement mentioned in clause 602; the applicant’s allocation is zero. (7) If the Regulator considers that the requirements for the closure of equipment will be met during the financial year to which the application relates in relation to the emissions‑intensive trade‑exposed activity, the Regulator must reduce the number of free carbon units by the number of carbon units that would be likely to be required to be relinquished in accordance with Division 2 of Part 13. (8) If the number of free carbon units worked out under this clause is not a whole number: (a) round up the number to the next whole number if the first decimal place is 0.5 or more; and (b) round down the number to the next whole number if the first decimal place is less than 0.5. Division 2—Special arrangements for facility without continuous emissions‑intensive trade‑exposed activity 903 (1) This clause applies: (a) for an application in relation to an emissions‑intensive trade‑exposed activity to which Division 3 of Part 7 applies; and (b) if the Regulator is satisfied that the applicant has met the requirement in subclause 705(1) or (2). (2) The Regulator must be satisfied that the assessment of the amount or volume of the relevant product provided under subclause 705(3), or the amount or volume substituted by the Regulator under subclause 803(8), is the best estimate of the amount or volume of the relevant product that is reasonably likely to be produced in the financial year to which the application relates, having regard to: (a) any arrangements that have been entered into to buy the facility’s output; and (b) the likelihood that the equipment that is to be used to carry on the emissions‑intensive trade‑exposed activity: (i) will be commissioned as described in the application; and (ii) is likely to be ready to produce the product mentioned in the application; and (iii) will produce the amount or volume of the relevant product claimed by the applicant; and (c) any other matter that the Regulator considers relevant. Division 3—Special arrangements for significant expansion 904 (1) This Division applies: (a) for an application in relation to an emissions‑intensive trade‑exposed activity to which Division 4 of Part 7 applies; and (b) if the Regulator is satisfied that the applicant has met the requirement in subclause 706(1). (2) The Regulator must be satisfied that, in respect of the relevant facilities, the amount or volume of the relevant product that: (a) the applicant has set out as reasonably likely to be produced in the financial year to which the application relates above the level of production of the previous financial year; or (b) the Regulator has substituted under paragraph 803(8)(a) as reasonably likely to be produced in the financial year to which the application relates above the level of production of the previous financial year; is the best estimate of the amount or volume of the relevant product that is reasonably likely to be produced. 905 For subclause 904(2), the Regulator must have regard to: (a) any arrangements that have been entered into to buy the facility’s output; and (b) the likelihood that the equipment that is to be used to carry on the emissions‑intensive trade‑exposed activity: (i) if new equipment is to be commissioned—will be commissioned as described in the application; and (ii) is likely to be ready to produce the product mentioned in the application; and (iii) will produce the amount or volume of the relevant product claimed by the applicant; and (c) the likelihood that the new or recommissioned equipment that forms the basis of the application will be installed or recommissioned as described in the application; and (d) the likelihood that any other equipment is to be decommissioned or operated at a lower rate after the new equipment is installed or relevant old equipment recommissioned; and (e) any other matter that the Regulator considers relevant. Division 4—Formula 906 (1) The formula for working out the total number of free carbon units (the baseline allocation) to be issued to an applicant in respect of an emissions‑intensive trade‑exposed activity carried on during a specified period is: EIa allocationst + EPa allocationst + NGPa allocationst + previous year adjustmentst where: EIa allocationst is kat (EIat APiat). EPa allocationst is kat (EPat EAFit APiat). NGPa allocationst is kat (NGPat NGAFit APiat). previous year adjustmentst is Tiat. Note: Clause 902 explains how to work out the final number of units to be allocated. (2) If there is more than one kind of relevant product in respect of an emissions‑intensive trade‑exposed activity, the formula in subclause (1) must be applied for each kind of product and the result for each kind of product added together to work out the baseline allocation to be issued for the activity. (3) For an application relating to an activity mentioned in Division 51 or 52 of Part 3 for the year ending 30 June 2013, APiat is worked out using the formula in subclause 907(7) or (7A). (4) For an application for the years ending 30 June 2013 and 30 June 2014 relating to an activity mentioned in the following, APiat is worked out using the formula in subclause 907(7A): (a) Division 53 of Part 3 (production of ferrovanadium); (b) Division 54 of Part 3 (rendering of animal by‑products). 907 (1) This clause explains the symbols that are used in the formula and elsewhere in this Part. (2) In the formula: a represents the emissions‑intensive trade‑exposed activity. i represents the applicant. t represents the financial period during which the emissions‑intensive trade‑exposed activity is carried out or is to be carried out. kat (3) kat is the assistance rate for: (a) the emissions‑intensive trade‑exposed activity; and (b) the period during which the emissions‑intensive trade‑exposed activity is carried out. (4) kat is worked out as follows: (a) for the financial year starting on 1 July 2012 (the ka1)—66.0% for a moderately emissions‑intensive activity and 94.5% for a highly emissions‑intensive activity; (b) for each subsequent financial year—ka1 Í (1–0.013)t‑1 rounded to the nearest 3 significant figures. Example: If ka1 is 94.5%: For 2013–14, kat will be 94.5% Í (1–0.013)2‑1 = 93.3%. For 2014–15, kat will be 94.5% Í (1–0.013)3‑1 = 92.1%. EIat (5) EIat is the baseline level (in Part 4) of direct emissions per unit for the production of the relevant product, including emissions associated with the use of steam. Note 1: This is also known as the direct emissions‑intensity baseline for the activity. Note 2: An applicant may choose for this to be taken to be zero under clause 912. APiat (6) APiat is the adjusted production, that is the volume or amount of the relevant product, adjusted in accordance with clause 803, to be the volume or amount used to issue carbon units for a given financial year for: (a) the applicant; and (b) the period during which the emissions‑intensive trade‑exposed activity is carried out. (7) APiat is worked out using the formula: Piat–1 + EAPiat where: Piat–1 is the amount or volume of the relevant product produced in the financial year before the financial year to which the application relates. EAPiat is the expected additional production for: (a) the applicant; and (b) the facilities to which the criteria in subclause 705(1) or (2) or 706(1) relate; and (c) the period during which the emissions‑intensive trade‑exposed activity is carried out. EPat (7A) However, for subclauses 906(3) and (4), APiat is worked out using the formula: where: Piat is the amount or volume of the relevant product produced in the financial year to which the application relates. (8) EPat is the baseline level (in Part 4) of electricity per unit for the production of the relevant product. EAFit (9) EAFit is the electricity allocation factor, which relates to the effect of the carbon price on the price of electricity. (10) EAFit is: (a) 1; or (b) the factor as modified in accordance with Division 5. NGPat (11) NGPat is the baseline level (in Part 4) of natural gas (or its components) feedstock used per unit for the production of the relevant product. Note: This is also known as the natural gas (or components) feedstock intensity baseline for indirect natural gas emissions for the activity. NGAFit (12) NGAFit is the natural gas feedstock (or its components) allocation factor, which relates to the effect of the carbon cost on the cost of natural gas. (13) The factor NGAFit, measured in tonnes of CO2–e per terajoule (TJ), is: (a) for ethene produced in accordance with Division 23 of Part 3 in: (i) New South Wales—an ethane‑specific factor of 21.5; and (ii) Victoria—an ethane‑specific factor of 4.8; and (b) for a product that is not ethene—explained in the following table.
(14) In subclause (13): ethane‑specific factor means the factor worked out in relation to the emissions associated with the production and transmission of ethane. metropolitan means: (a) the area that is on, or east of, the Great Dividing Range in New South Wales, and includes Queanbeyan; and (b) Canberra, Melbourne, Brisbane, Adelaide and Perth. F means value to be determined in the future. Tiat (15) Tiat is the adjustment for the previous financial year’s production for the activity being conducted at the same facility or series of facilities for that year, which is: (a) zero if: (i) the application relates to the financial year starting on 1 July 2012; or (ii) the application relates only to a facility or facilities to which the criteria in subclause 705(1) or (2) relate; or (iii) the relevant product relates only to facilities for which a requirement under Division 2 of Part 13 took effect in the financial year before the financial year to which the application relates; or (iv) no application was approved for free carbon units in relation to the carrying on of the emissions‑intensive trade‑exposed activity at the same facilities or series of facilities in the previous financial year; or (b) worked out using subclause (16) if the application relates to the financial year starting on 1 July 2013 or 1 July 2014; or (c) worked out using subclause (17) if the application relates to the financial year starting on 1 July 2015; or (d) worked out using subclause (18) if the application relates to a flexible charge year other than the financial year starting on 1 July 2015. (16) For paragraph (15)(b), Tiat is worked out using the formula: CPt‑1/CPt Í (1+r) Í [kat‑1 Í (Piat‑1 Í (EIat‑1 + EPat‑1 Í EAFit‑1 + NGPat‑1 Í NGAFit‑1)) – (baseline allocationt‑1 – Tiat‑1)] where: CPt is the fixed charge for the vintage year as set out in the table in subsection 100(1) of the Act. baseline allocationt‑1 means the total number of free carbon units worked out under clause 906 for the previous period. Note: r is explained in Part 2. (17) For paragraph (15)(c), Tiat is worked out using the formula: CPt‑1/BAACt Í [kat‑1 Í (Piat‑1 Í (EIat‑1 + EPat‑1 Í EAFit‑1 + NGPat‑1 Í NGAFit‑1)) – (baseline allocationt‑1 – Tiat‑1)] where: BAACt is the benchmark average auction charge for the financial year starting on 1 July 2014. (18) For paragraph (15)(d), Tiat is worked out using the following formula. kat‑1 Í (Piat‑1 Í (EIat‑1 + EPat‑1 Í EAFit‑1 + NGPat‑1 Í NGAFit‑1)) – (baseline allocationt‑1 – Tiat‑1) Division 5—Modification of formula in Division 4—large user electricity contracts 908 (1) This Division applies in relation to an application that includes a single facility that consumed more than 2 000 gigawatt‑hours of electricity at the facility in the financial year starting on 1 July 2008. (2) For this Division: contract in relation to the supply of electricity to a facility means a contract that is either or both of the following: (a) a contract for the physical supply of electricity to a facility; (b) a contract (including a contract for differences or a derivative) under which the price paid for the supply of electricity to a facility is hedged. eligible large user of electricity, in relation to a facility, means any of the following: (a) the person who had operational control of the facility on 1 July 2012; (b) the holder of a liability transfer certificate that was in force in relation to the facility on 1 July 2012; (c) a person who is a party to a contract in relation to the supply of electricity to the facility, as the purchaser of electricity, on 1 July 2012; (d) a person who is a participant in a designated joint venture in relation to the facility on 1 July 2012. price, for electricity, means any monetary amount or other consideration to be provided under a contract in relation to the supply of electricity to a facility. purchaser, of electricity, means a person: (a) who is a party to a contract in relation to the supply of electricity to a facility; and (b) who: (i) in relation to a contract for the physical supply of electricity to a facility—is supplied electricity for the facility either wholly or partly under the contract; or (ii) in relation to a contract under which the price paid for the supply of electricity to a facility is hedged—purchases electricity for the facility. relevant pre‑existing contract means a contract in relation to the supply of electricity to a facility: (a) that was entered into before 3 June 2007 and was still in force on 1 May 2012; and (b) that is expected to be in force on 1 July 2012. (3) For this Division, a contract in relation to the supply of electricity to a facility is taken not to be a relevant pre‑existing contract if: (a) the contract was entered into before 3 June 2007; and (b) after 3 June 2007, either or both of the following occur: (i) one or more terms of the contract are varied; (ii) other agreements or arrangements are made by the parties to the contract; and (c) the Regulator is given a written statement by each party to the contract that under: (i) the contract; and (ii) any other agreements or arrangements, made by the parties, that are in force at the time of giving the statement; the average cost for the purchaser of electricity as a result of the commencement of the Act and associated provisions is reasonably expected to be greater than the equivalent of 0.7 carbon units per MWh from 1 July 2012 until the end of the contract or 30 June 2021, whichever is the earlier. (4) For paragraph (3)(c): (a) the cost for the purchaser of electricity includes a cost which is conditional on the receipt of free carbon units under this program; and (b) the number of free carbon units mentioned in paragraph (a) is to be worked out as if the electricity allocation factor were 1; and (c) the value of the benefit of those free carbon units is not to be deducted from the cost when working out the cost for the purchaser of electricity. 909 (1) An eligible large user of electricity may apply to the Regulator, before 1 August 2012, for the Regulator to issue a certificate (a large user electricity certificate) modifying the formula in Division 4 for: (a) the facility specified in the certificate; and (b) relevant products produced, or to be produced, by the emissions‑intensive trade‑exposed activity carried on at the facility. (2) If there is a relevant pre‑existing contract in relation to the facility, the application must be accompanied by: (a) a copy of each relevant pre‑existing contract; and (b) a copy of any other document or contract that is relevant to the operation of any provision of the relevant pre‑existing contracts that increases or decreases the price paid for electricity; and (c) a statement of whether there is any information in the control or possession of a third party relevant to the increase or decrease in prices under the relevant pre‑existing contracts; and (d) an explanation of how the commencement of the Act and associated provisions will change the price that is paid for electricity under the relevant pre‑existing contracts relative to the price that would have been charged if the Act and associated provisions had not commenced; and (e) a statement of the measures that the eligible large user of electricity, and other persons involved in the supply of electricity, are able to take, as cost‑effective measures, to reduce the increase in the price for electricity under the relevant pre‑existing contract as a result of the commencement of the Act and associated provisions; and (f) an opinion by a Queens Counsel or Senior Counsel as to how the provisions of the relevant pre‑existing contracts that deal with increases in price because of the commencement of the Act and associated provisions will operate; and (g) evidence that the eligible large user of electricity has shown its explanation of how the price will increase to the other parties to each relevant pre‑existing contract; and (h) any opinion of another party to a relevant pre‑existing contract, about the explanation mentioned in paragraph (g), that: (i) was given to the eligible large user of electricity, in writing, before the application was made; and (ii) was intended by the other party to be disclosed to the Regulator or could reasonably be regarded as having been given by the other party without reservations about being disclosed to the Regulator; and (i) a statement of the date (the end date) for each relevant pre‑existing contract that is the earliest of the following: (i) the date specified in the contract, as in force on 3 June 2007, as the date on which the contract ends; (ii) the date specified in the contract, as in force on 1 May 2012, as the date on which the contract ends; (iii) the first date after 1 May 2012 (or the first likely date after 1 May 2012) on which the obligation to pay the price for electricity under the relevant pre‑existing contract could be ended without material adverse consequences to the purchaser of electricity under that contract; and (j) the portion of electricity that is likely to be used in each financial year by the facility that is attributable to arrangements other than the relevant pre‑existing contracts until the last end date for the last of those relevant pre‑existing contracts; and (k) a statement of what the new electricity allocation factor should be in relation to each eligible financial year before the end date for the relevant pre‑existing contracts; and (l) a statement of the emissions intensity of any coal‑fired electricity generators that are relevant for the purposes of paragraph (8)(c); and (m) whether the eligible large user of electricity is unable to disclose any information relevant to the application because of a requirement to keep a matter confidential. (3) If there is no relevant pre‑existing contract in relation to the facility, the application must be accompanied by: (a) a statement that there is no relevant pre‑existing contract in force; and (b) if: (i) a contract in relation to the supply of electricity to the facility was entered into before 3 June 2007; and (ii) the contract would ordinarily have been in force on 1 May 2012; and (iii) the contract ceased to be in force before 1 May 2012; a description of the parties to the contract and the date on which the contract ceased to be in force. (4) The Regulator must: (a) prepare a draft large user electricity certificate that sets out: (i) a new electricity allocation factor for each eligible financial year until the end date for the last of the relevant pre‑existing contracts; or (ii) if there are no relevant pre‑existing contracts—a statement that the electricity allocation factor is not to be modified in relation to an emissions‑intensive trade‑exposed activity carried on at the facility; and (b) give a copy of the draft certificate to: (i) the eligible large user of electricity; and (ii) each other party to a relevant pre‑existing contract; and (c) notify the eligible large user of electricity and each other party, in writing, of the reasons why it has prepared the draft certificate; and (d) invite the eligible large user of electricity and each other party to give the Regulator comments about the draft certificate within 30 days after the date of the invitation. (5) The invitation is not an undertaking or guarantee that the Regulator will make a particular decision on the application. (6) If, after considering any comments about the draft certificate received in accordance with the invitation in subclause (4), the Regulator is satisfied that it has sufficient information to be able to issue a certificate, the Regulator must issue a large user electricity certificate that sets out: (a) a new electricity allocation factor for each eligible financial year until the end date for the last of the relevant pre‑existing contracts; or (b) if there are no relevant pre‑existing contracts—a statement that the electricity allocation factor is not to be modified in relation to an emissions‑intensive trade‑exposed activity carried on at the facility. (7) For each eligible financial year, the new electricity allocation factor must be worked out as follows: (1 Í non‑contract portion) + (X Í contract portion) where: non‑contract portion means the portion of electricity that is not included in the contract portion for that eligible financial year (expressed as a percentage). X means the Regulator’s reasonable estimate of the number of carbon units issued on 31 October of that eligible financial year that would represent the difference in price for the supply of 1 MWh of electricity on that day between: (a) the price that would have been paid for electricity under the relevant pre‑existing contracts that have not reached their end dates if the Act and associated provisions had not commenced; and (b) the likely price for electricity under those contracts as a result of the commencement of the Act and associated provisions. contract portion means the portion of electricity that is reasonably likely to be attributable, for that eligible financial year, to a relevant pre‑existing contract that has not reached its end date (expressed as a percentage). (8) For subclause (7): (a) factor X may be: (i) an actual number for a financial year; or (ii) the product of a formula, or another suitable procedure, that may use updated information relating to electricity market prices or the price of carbon units; and (b) factor X must not be less than 0; and (c) factor X must not be more than: (i) if the price increase for electricity for any of the relevant pre‑existing contracts that have not reached their end date relates to the costs that are imposed on one or more coal‑fired electricity generators because of the commencement of the Act and associated provisions—the weighted average emissions‑intensity of those generators in respect of the financial year starting on 1 July 2008, worked out in accordance with subclause (9); or (ii) in any other case—1; and (d) if the price for the supply of electricity on 31 October of the relevant financial year is not reflective of the weighted average price increase for the supply of electricity on a typical day during the relevant financial year, the Regulator must use: (i) a more appropriate day in the relevant financial year; or (ii) the weighted average price increase. (9) For subparagraph (8)(c)(i), the weighted average emissions‑intensity of the generators is to be worked out by dividing the emissions of the generator’s facilities reported under the NGER Act by the sent out generation of the generator in the financial year starting on 1 July 2008. (10) If an application is not made under subclause (1) before 1 August 2012, the Regulator must use an electricity allocation factor of zero in respect of any emissions‑intensive trade‑exposed activity carried on at the facility in the first 10 eligible financial years of the application of the Act and associated provisions. Note: The first 10 eligible financial years of the application of the Act and associated provisions start on 1 July 2012, 1 July 2013, 1 July 2014, 1 July 2015, 1 July 2016, 1 July 2017, 1 July 2018, 1 July 2019, 1 July 2020 and 1 July 2021. 910 (1) The Regulator must amend a large user electricity certificate issued under clause 909 in any of the following circumstances: (a) a relevant pre‑existing contract on the basis of which the certificate was issued is terminated as a result of circumstances beyond the control of the purchaser of electricity under the relevant pre‑existing contract; (b) the Regulator’s interpretation of a relevant pre‑existing contract on the basis of which the certificate was issued differs substantially from: (i) a binding decision of a State or Territory Supreme Court, the Federal Court or the High Court on the relevant pre‑existing contract; or (ii) a binding decision of an independent arbitrator or independent expert on the relevant pre‑existing contract; (iii) a binding decision of a Court mentioned in subparagraph (i) on a contract in which the provisions relating to the price paid for electricity by the purchaser are, in all material respects, the same as the equivalent provisions in, or relating to, the relevant pre‑existing contract; (c) the Regulator believes it is appropriate to amend the certificate to correct a minor error in the certificate. (2) Before amending the large user electricity certificate, the Regulator must consult with the person who is the eligible person in respect of any relevant activity conducted at the relevant facility when the circumstance mentioned in subclause (1) occurs. (3) If paragraph (1)(a) applies: (a) the end date of the relevant pre‑existing contract is taken to be the day on which the relevant pre‑existing contract is terminated; and (b) the Regulator must amend the large user electricity certificate by amending the electricity allocation factor for each remaining eligible financial year until the end date for the last of the relevant pre‑existing contracts, in accordance with subclause 909(7). (4) If paragraph (1)(b) applies, the Regulator must amend the large user electricity certificate by amending the electricity allocation factor for each remaining eligible financial year until the end date for the last of the relevant pre‑existing contracts, in accordance with the relevant decision of the Court, independent arbitrator or independent expert. Division 6—Maximum number of units to be allocated to new facilities Note: New facility and series of new facilities are explained in clause 205. 911 (1) This Division applies if: (a) an application (the current application) is made for the issue of free carbon units in a financial year in relation to the carrying on of an emissions‑intensive trade‑exposed activity at a new facility or series of new facilities; and (b) either: (i) an application was approved for the issue of free carbon units in relation to the carrying on of the emissions‑intensive trade‑exposed activity for the financial year before the financial year to which the current application relates (the relevant previous financial year); or (ii) an event mentioned in subclause 1305(2) occurred in relation to the carrying on of the emissions‑intensive trade‑exposed activity in the financial year before the financial year to which the current application relates (the relevant previous financial year); and (c) before a decision is made on the current application, the number of free carbon units that would be worked out for the current application using the formula (the starting formula): kat‑1 Í (EIat‑1 + EPat‑1) Í (Piat‑1) is: (i) for the second year in which an application is made under the program and the following 4 financial years—greater than 120% of the number that is worked out under subsection (2); and (ii) for each subsequent financial year—greater than the number that is worked out under subsection (2). (2) For paragraph (1)(c), disregard any sub‑threshold emissions adjustment under subclause 912(8), then add together the following amounts for the relevant previous financial year: (a) the amount of any covered emissions attributable to the operation of the new facility or series of new facilities; (b) the amount of total emissions attributable to the combustion of fuels mentioned in subsection 30(2) of the Act that are attributable to the operation of the new facility or series of new facilities; (c) any amount of electricity (measured in MWh) that is: (i) consumed in the operation of the new facility or series of new facilities that is the subject of the application; and (ii) supplied by electricity generators that are: (A) co‑located with one or more of the new facilities, or directly connected to the new facilities by a dedicated line; and (B) not part of the new facility or series of new facilities; multiplied by the total amount of emissions of the electricity generators and then divided by the total amount of electricity (measured in MWh) generated by those electricity generators as measured at all the generator terminals; (d) the amount of electricity, measured in MWh, attributable to the operation of the new facility or series of new facilities, worked out using the formula: (I – X) Í a where: I is the amount of electricity purchased from an electricity grid and consumed in the operation of the facilities; X is the amount of electricity produced by electricity generators that are part of the facilities which was not consumed by those facilities and was exported to an electricity grid or to another facility; a is: (i) EAFit (as defined in subclause 907(10)); or (ii) if A is less than B—the total amount of emissions associated with electricity produced by electricity generators that are part of the facilities divided by the total amount of electricity generated by those electricity generators (measured at all the generator terminals); 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) This Division applies if: (a) a facility involves carrying on one or more activities identified in Part 3; and (b) either: (i) 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 (ii) 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 (c) for the financial year before the financial year to which the current application relates—both of the following apply: (i) the facility did not pass the relevant threshold test under sections 20 to 25 of the Act; and (ii) the person mentioned in those sections did not have a provisional emissions number in relation to the facility. (3) To work out the sub‑threshold emissions adjustment for the facility: (a) if the applicant chooses to use method 2 (set out in subclause (8))—use that method; and (b) in all other cases—use method 1 (set out in subclauses (4) to (7)). Method 1 (4) For each of the facilities mentioned in subclause (2), work out the result using the formula: CEat‑1 – NGat‑1 where: CEat is the total covered emissions from the operation of the facility in the financial year to which the application relates. NGat 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: (a) if, in the previous financial year, the applicant chose to use method 2 to work out the sub‑threshold emissions adjustment for the facility—is reduced to zero; and (b) in all other cases—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. (5A) However, if using the formula in subclause (4) would result in a negative allocation of free carbon units, the number of carbon units required to be issued is reduced by the amount of carbon units allocated for EIat‑1, mentioned in subclause 907(5), as if EIat‑1 were zero. (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) EIat, mentioned in subclause 907(5), is taken to be zero; and (b) the sub‑threshold emissions adjustment is: (i) if, in the previous financial year, the applicant did not choose to use method 2 to work out the sub‑threshold emissions adjustment for the facility—the number worked out under method 1; or (ii) in all other cases—zero. If this Division does not apply (9) If the facility is not a facility to which this Division applies, 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. Division 9—Calculation of supplementary allocation of units for LNG production activity 914 (1) This Division applies if: (a) an application (the current application) is made for the issue of free carbon units in a financial year in relation to the carrying on of a LNG production activity, which is an emissions‑intensive trade‑exposed activity; and (b) either: (i) an application was approved for the issue of free carbon units in relation to the carrying on of the LNG production activity for the financial year before the financial year to which the current application relates (the relevant previous financial year); or (ii) Division 3 of Part 13 applies in relation to the carrying on of the LNG production activity in that relevant previous financial year; and (c) in the relevant previous financial year at least 1 tonne of liquefied natural gas was produced at a LNG facility that meets the criteria for the LNG production activity in Division 36 of Part 3; and (d) before a decision is made on the current application, the number of free carbon units that would be worked out for the current application using the formula (the LNG starting formula): kat‑1 x (EIat‑1 + EPat‑1) x (Piat‑1) in accordance with Division 4 is less than 50% of the final LNG emissions number worked out under Division 10. (2) The LNG supplementary allocation adjustment is the amount worked out by multiplying the final LNG emissions number by 50% and then subtracting from the resulting number the number worked out using the LNG starting formula in paragraph (1)(d). (3) The number of carbon units that are required to be issued in accordance with this Part in respect of the current application is to be increased by the amount worked out under subclause (2) and 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, dividing the result by the benchmark average auction charge for the financial year starting on 1 July 2014 and multiplying that number by (1+r). Division 10—LNG supplementary allocation rules Final LNG emissions number 915 (1) The Regulator, in accordance with this Division, must work out a final LNG emissions number for a LNG project that is the subject of an application. (2) The final LNG emissions number is worked out by adding together category A emissions and category B emissions for the relevant previous financial year, where: Category A emissions are the following eligible LNG emissions that arise from the LNG project: (a) if section 26, 27 or 28 of the Act applies to require an adjustment of a provisional emissions number in relation to covered emissions—the amount of any covered emissions that contribute to the adjusted provisional emissions number, worked out by multiplying the amount of the covered emissions by the prescribed percentage; (b) if section 26, 27 or 28 of the Act do not apply to require an adjustment of a provisional emissions number in relation to covered emissions—the amount of any covered emissions not related to electricity generation; (c) the amount of emissions that are attributable to the combustion of fuels mentioned in subsection 30(2) of the Act and are not related to electricity generation; (d) the amount of emissions from the combustion of the opt‑in amount of taxable fuel specified in the Opt‑in Scheme that are not related to electricity generation; (e) the amount of any emissions from the production of steam imported from another facility that is not part of the LNG project, other than steam derived from another facility for the purpose of generating electricity for use within the LNG project. Category B emissions are the following eligible LNG emissions that arise from the LNG project: (a) the amount of any covered emissions mentioned in paragraphs (a) to (d) of the definition of category A emissions that are related to electricity generation; (b) the amount of any emissions generated from the consumption of electricity within the LNG project supplied by electricity generators that are part of a facility within the LNG project, or are connected to a facility within the LNG project by a dedicated line, worked out by: (i) measuring (in MWh) the amount of electricity supplied by the generators consumed within the LNG project; and (ii) multiplying the amount from subparagraph (i) by the total amount of emissions produced by the generators; and (iii) dividing the amount from subparagraph (ii) by the total amount of electricity generated by the generators, measured in MWh at all the generator terminals; (c) the amount of emissions which relate to electricity purchased from an electricity grid and consumed within the LNG project, measured in MWh, multiplied by EAFit (as defined in subclause 907(10)); (d) the amount of any emissions from the production of steam imported from another facility that is not part of the LNG project for the purpose of generating electricity for use within the LNG project. (3) The Regulator must be satisfied that the emissions used to work out the final LNG emissions number are eligible LNG emissions from the LNG project that are: (a) not excluded under subclause (6) or (7); and (b) attributable to the production of liquefied natural gas under clause 916; and (c) apportioned to the production of liquefied natural gas under clause 917; and (d) for a LNG project that includes small‑scale upstream emissions—estimated under clause 918. (4) Eligible LNG emissions are emissions with the following characteristics from machinery, equipment and processes used in the LNG project that are mentioned in subclause (5): (a) the emissions are able to be measured using a method determined under section 10 of the NGER Act; (b) either: (i) the emissions are directly emitted from the machinery, equipment or process; or (ii) the emissions arise from the consumption of electricity or steam by the machinery, equipment or process. (5) The machinery, equipment and processes are the following: (a) the extraction of a gas mixture containing natural gas for liquefaction from an upstream geological formation; (b) the transportation or handling, or both, of a gas mixture containing natural gas from the location where it was extracted to a location where it is liquefied; (c) the liquefaction of natural gas; (d) the use of machinery, equipment or processes that are integral to, and essential for: (i) the physical transformation in the LNG production activity described in Division 36 of Part 3; or (ii) the extraction, transportation or handling of a gas mixture containing natural gas that is to be liquefied or consumed within the LNG project; Example 1: Machinery used to move liquefied natural gas within the LNG project. Example 2: Machinery, equipment or processes used to conduct operations in control rooms, laboratories or maintenance workshops. Example 3: Machinery used to create non‑electrical energy for use in the LNG project. (e) the processing of by‑products that involve the recovery of materials for re‑use in the LNG project; (f) the processing within the LNG project of waste materials created at the LNG project to comply with Commonwealth, State or Territory obligations; (g) the use of gas that is not directly derived from the upstream geological formation that forms part of the LNG project for commissioning purposes; (h) the recovery of waste heat within a LNG project; (i) the consumption of steam within a LNG project; (j) the treatment of a gas mixture containing natural gas that is subsequently transformed into liquefied natural gas, including the following treatments: (i) bulk water removal (such as the separation of water from a gas mixture containing natural gas and flaring of entrained hydrocarbons in this water); (ii) removal of acid gases (such as carbon dioxide and hydrogen sulphide); (iii) dehydration and mercury removal; (iv) flaring or venting of greenhouse gases and any fugitive emissions related to that treatment or the liquefaction process (such as flaring or venting compressor seals and valves); (k) the supply of utilities (such as compressed air, nitrogen and water) used to support the LNG project; (l) the regeneration of any catalysts or solvents used within a LNG project; (m) drilling activities where a gas mixture containing natural gas is extracted and transformed into liquefied natural gas within the LNG project; (n) the short‑term buffer storage of liquefied natural gas where the volume of that buffer storage is designed specifically for enabling efficient loading of liquefied natural gas on transportation, as a gas or a liquid, away from the LNG project; (o) the loading of the liquefied natural gas on transportation (such as ocean going tankers and other waterborne vessels or facilities, pipeline systems and road transport) away from the facility, other than gasification for the resupply of natural gas in gaseous form. (6) Eligible LNG emissions do not include emissions from the following machinery, equipment and processes used in the LNG project: (a) the transportation of equipment used in any part of the LNG project; (b) the transportation of saleable by‑products produced within the LNG project away from the LNG project; (c) the transportation of saleable by‑products produced within the LNG project within or between LNG facilities forming part of the LNG project, if the by‑products do not contain the natural gas that is to be liquefied within the LNG project; (d) processing solely for the production of saleable by‑products for transportation away from the LNG project, if the by‑products are not to be liquefied into liquefied natural gas by the LNG project; Example 1: Condensate stripping operations. Example 2: LPG fractionation. Example 3: Acid gas removal of a solely domestic gas stream. (e) the carrying out of complementary activities (such as packaging, operating a head office and administrative and marketing operations) whether or not these activities are carried out at the same location as the LNG project; (f) the transportation of people or supplies to and from the LNG project or the operation of accommodation buildings. Note: Saleable by‑products are explained in paragraph 916(2)(a). (7) An emission from within a LNG project, other than an emission from the consumption of steam or electricity imported into the LNG project, that has not been reported for the purposes of Parts 3 to 3F of the NGER Act is not an eligible LNG emission. (8) An emission from a facility within a LNG project that has not been reported under subclause 710(2) is not an eligible LNG emission. (9) To avoid doubt, an emission that cannot be measured using a method determined under section 10 of the NGER Act is not an eligible LNG emission. (10) The Regulator may reduce the final LNG emissions number to zero if: (a) the applicant has not provided sufficient information under clauses 710 and 801 for the Regulator to make a reasonable estimate of the final LNG emissions number; or (b) the auditor’s report included in the application in accordance with clause 604 does not include an auditor’s reasonable assurance opinion in relation to the matters set out in paragraph 604(7)(d). Attribution of emissions 916 (1) This clause sets out the rules that apply to the attribution of emissions from a particular source within a LNG project to the production of liquefied natural gas or the production of saleable by‑products. (2) The rules to be applied are as follows: (a) saleable by‑products for this Division are hydrocarbon products determined to be of a saleable quality when transported away from the LNG project; (b) emissions directly emitted from, or arising from consumption of electricity or steam by, a particular piece of machinery, equipment or process are to be treated as follows: (i) if the machinery, equipment or process is demonstrated to have been used solely for the production of saleable by‑products—the emissions must not be attributed as eligible LNG emissions; (ii) if the machinery, equipment or process is demonstrated to have been used solely for the production of liquefied natural gas—the emissions must be attributed as eligible LNG emissions; (iii) if the machinery, equipment or process cannot be demonstrated to have been used solely for the production of saleable by‑products or the production of liquefied natural gas—the emissions must be apportioned in accordance with clause 917; (c) the origin of emissions may be demonstrated by using: (i) the molar percentage of saleable products that flow through, or are immediately upstream of, the piece of machinery, equipment or process; or (ii) process flow diagrams, based on reasonable assumptions, that represent the flow of inputs and outputs of liquefied natural gas and saleable by‑products through the LNG project; (d) if electricity consumption of a particular piece of machinery, equipment, or process has not been monitored, method 2 in subclause 917(3) may be used to estimate emissions to be attributed under subparagraphs (b)(i) and (ii). Apportioning of emissions 917 (1) This clause sets out how emissions from a particular source within a LNG project are to be apportioned between the production of liquefied natural gas and the production of saleable by‑products. (2) Category A emissions that are not fully attributable to the production of liquefied natural gas are to be apportioned by multiplying the emissions by the percentage derived using one or both of the following methods for each piece of machinery or equipment or several pieces of machinery or equipment that are used as part of a single process (the equipment or process): Method 1—work out the final molar percentage of eligible LNG emissions by measuring the total number of moles of liquefied natural gas as a percentage of the total number of moles of liquefied natural gas and saleable by‑products that have been measured as final saleable products from the activity. Method 2—work out the process molar percentage of eligible LNG emissions by measuring the total number of moles of liquefied natural gas as a percentage of the total number of moles of liquefied natural gas and saleable by‑products that have flowed through the equipment or process. (3) Category B emissions that are not fully attributable to the production of liquefied natural gas are to be apportioned using one or more of the following methods for each source of category B emissions: Method 1—work out the final molar percentage of eligible LNG emissions by measuring the total number of moles of liquefied natural gas as a percentage of the total number of moles of liquefied natural gas and saleable by‑products that have been measured as final saleable products from the activity and multiply the emissions by that percentage. Method 2—work out the total amount of category B emissions from the consumption of a particular source of electricity that have not been apportioned using another method and multiply that amount by the predetermined percentage for the equipment or process and by the process molar percentage, where: predetermined percentage is the proportion of equipment energy demand of the total energy demand expressed as a percentage. equipment energy demand is the number set out in the technical specifications for each piece of equipment, being the maximum demand for the equipment or process, multiplied by the run‑time factor for the equipment or process. total energy demand is the total of the equipment energy demand of every piece of machinery or equipment being apportioned by this method that consumes electricity from a particular source of Category B emissions. run‑time factor is the ratio of the hours of operation of the equipment or process in the previous financial year to the total hours of operation in the previous financial year, expressed as a percentage. Method 3— Step 1: work out the emissions as follows: (a) for a piece of equipment or single process—by multiplying the electricity consumption for the equipment or process by the emissions intensity of the generated source the equipment or process is connected to; (b) for a piece of equipment or process that consumes electricity from multiple sources of generation—by multiplying the electricity consumption for the equipment or process by the total emissions from each of the sources and dividing that number by the total electricity generated from each of the sources. Step 2: work out the process molar percentage of eligible LNG emissions by measuring the total number of moles of liquefied natural gas as a percentage of the total number of moles of liquefied natural gas and saleable by‑products that have flowed through the equipment or process and multiply the emissions worked out in step 1 by that percentage. (4) For the apportioning of category B emissions, method 2 must not be used if electricity consumption of the equipment or process has been monitored in the previous financial year. (5) In working out the run‑time factor using method 2, if the hours of operation are not monitored for the equipment or process, a reasonable estimate of the hours of operation may be used, based on either or both of the following: (a) an explanation of the engineering design of the equipment or process; (b) the hours of operation for the equipment or process that was used in the applicant’s application in the year prior to the previous financial year, adjusted as required to reflect any change in operations. Small‑scale upstream emissions 918 (1) This clause does not apply to the calculation of a provisional LNG emissions number. (2) For a LNG facility that had a maximum production capacity of less than 500 000 tonnes of liquefied natural gas in the previous financial year, upstream emissions from the production are to be included in the relevant final LNG emissions number for the facility’s LNG project using the formula: SSLF t–1 x Piat–1 where: Piat–1 is the amount or volume of the relevant product produced in the financial year before the financial year to which the application relates. SSLFt is the small‑scale upstream LNG facility emission factor for an area that is worked out by the Regulator as follows: (a) adding together all direct emissions (measured in CO2‑e) reported under section 19 of the NGER Act for the year ending 30 June 2009 from the following: (i) all facilities that extract a gas mixture containing natural gas which is consumed within a metropolitan or non‑metropolitan area of a State or Territory; (ii) all network or pipeline facilities that transport or handle natural gas which is consumed within a metropolitan or non‑metropolitan area of a State or Territory; (b) dividing the number worked out under paragraph (a) by the total amount of natural gas (measured in gigajoules) consumed in a metropolitan or non‑metropolitan area of the State or Territory and reported under section 19 of the NGER Act for the year ending 30 June 2009; (c) multiplying the number worked out under paragraph (b) by: (i) the average gigajoules per tonne of LNG production that meets the criteria in Division 36 of Part 3 for the previous financial year; or (ii) if the auditor’s report included in the application in accordance with clause 604 does not include an auditor’s reasonable assurance opinion in relation to the matters set out in paragraph 604(7)(d)—54.5 gigajoules per tonne of LNG production. (3) In subclause (2): metropolitan means: (a) the area that is on, or east of, the Great Dividing Range in New South Wales, and includes Queanbeyan; and (b) Canberra, Melbourne, Brisbane, Adelaide and Perth. 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). (1A) However, subclause (1) does not apply if the following financial year begins on or after 1 July 2013. (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. 0 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. Schedule 2—Pipelines that are not natural gas supply pipelines Note: See regulation 1.8.
Endnotes Endnote 1—About the endnotes The endnotes provide information about this compilation and the compiled law. The following endnotes are included in every compilation: Endnote 1—About the endnotes Endnote 4—Amendment history Endnotes about misdescribed amendments and other matters are included in a compilation only as necessary. Abbreviation key—Endnote 2 The abbreviation key sets out abbreviations that may be used in the endnotes. Legislation history and amendment history—Endnotes 3 and 4 Amending laws are annotated in the legislation history and amendment history. The legislation history in endnote 3 provides information about each law that has amended (or will amend) the compiled law. The information includes commencement details for amending laws and details of any application, saving or transitional provisions that are not included in this compilation. The amendment history in endnote 4 provides information about amendments at the provision (generally section or equivalent) level. It also includes information about any provision of the compiled law that has been repealed in accordance with a provision of the law. Misdescribed amendments A misdescribed amendment is an amendment that does not accurately describe the amendment to be made. If, despite the misdescription, the amendment can be given effect as intended, the amendment is incorporated into the compiled law and the abbreviation “(md)” added to the details of the amendment included in the amendment history. If a misdescribed amendment cannot be given effect as intended, the amendment is set out in the endnotes. Endnote 2—Abbreviation key
Endnote 3—Legislation history
Endnote 4—Amendment history
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