EXPLANATORY STATEMENT
Issued by the authority of the Minister for Climate Change and Energy Efficiency
Clean Energy Act 2011
Proclamation
Item 2 of the table in subsection 2(1) of the Clean Energy Act 2011 (the Act) provides that sections 3 to 303 of the Act commence on a day to be fixed by Proclamation. However, commencement must not occur before the last bill in the Clean Energy Legislative Package receives the Royal Assent; and if any of the provisions in sections 3 to 303 do not commence within six months of the date this Act or other Acts in the Clean Energy Legislative Package receive the Royal Assent, then those provisions commence on the first day after the end of that six-month period. The Act received the Royal Assent on 18 November 2011.
The purpose of the Proclamation is to fix 2 April 2012 as the day on which sections 3 to 303 of the Act will commence. Consequently, item 4 of the table in subsection 2(1) of the Act provides that sections 304 to 312 will commence at the same time as sections 3 to 303.
The Act is the central act of the Clean Energy Legislative Package. The Act sets up the carbon pricing mechanism and deals with assistance for emissions-intensive trade-exposed industries (the Jobs and Competitiveness Program) and the coal-fired electricity generation sector. The Act contains rules for who is covered, the Opt-in Scheme as well as what sources of carbon pollution are included, the obligation to surrender emissions units, caps on the amount of carbon pollution from 1 July 2015, international linking, monitoring, enforcement, appeal and review provisions.
The Proclamation concerns the commencement of the substantive provisions of the Act. This ensures that the substantive provisions of the Act are operational at the time the Clean Energy Regulator (the Regulator) begins operating, which will be 2 April 2012, to allow the Regulator to perform its functions and to prepare for the commencement of the carbon pricing mechanism on 1 July 2012.
Other sections of the Act have already commenced. Sections 1 and 2 of the Act, concerned with the short title and commencement, commenced on the day the Act received the Royal Assent.
Sections 303A and 303B commenced on the day after the Act received the Royal Assent. These sections are complementary measures to address any risks to energy security under the carbon pricing mechanism, and provide for the Treasurer to authorise loans to an emissions-intensive coal-fired generation complex for the purpose of refinancing existing debt or the purchase of future carbon units. These sections commenced the day after Royal Assent to allow the Energy Security Council and the Treasury to authorise loans as required.
The Proclamation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
Authority: Item 2 of the table in subsection 2(1) of the Clean Energy Act 2011
Overview
The Clean Energy Act 2011, enacted by the Parliament of Australia, was introduced to address the urgent need for a national framework to reduce greenhouse gas emissions, particularly carbon pollution, and to establish a carbon pricing mechanism. The objective of this Act is to set up a structured approach for regulating carbon emissions, providing support to industries significantly affected by these regulations, and ensuring the transition towards cleaner energy sources. The Act is pivotal in the Clean Energy Legislative Package, which aims to create a comprehensive legislative environment for managing emissions, supporting affected industries, and fostering a shift towards sustainable energy practices. The Clean Energy Act 2011 received Royal Assent on 18 November 2011, with the Proclamation setting 2 April 2012 as the commencement date for its substantive provisions. This timing was crucial to ensure the Clean Energy Regulator could effectively begin its operations and prepare for the introduction of the carbon pricing mechanism on 1 July 2012.
Scope and Application
The Clean Energy Act 2011 applies to entities, persons, and industries involved in Australia's carbon pricing mechanism, including emissions-intensive trade-exposed industries and the coal-fired electricity generation sector. The Act covers the obligations to surrender emissions units, the monitoring and enforcement of compliance, and the administration of the carbon pricing mechanism. Geographically, the Act applies across the Commonwealth of Australia and encompasses the entire carbon pricing framework as established by the legislation. The Act excludes certain activities and entities as specified under the Jobs and Competitiveness Program and other relevant provisions. Subordinate instruments may extend or restrict the application of the Act by providing additional details or exemptions. The Act's substantive provisions, including those related to the carbon pricing mechanism, are set to commence on 2 April 2012, following the issuance of the Proclamation. This timing ensures that the Clean Energy Regulator can commence operations and prepare for the implementation of the carbon pricing mechanism on 1 July 2012.
Key Provisions
The Clean Energy Act 2011 (the Act) sets out a comprehensive framework for implementing a carbon pricing mechanism in Australia, which commenced on 2 April 2012. Section 3 to 303 of the Act includes key provisions that govern the carbon pricing mechanism, the Jobs and Competitiveness Program, and the coal-fired electricity generation sector (ss 3-303). These sections mandate the establishment of a carbon pricing mechanism that places a price on carbon pollution, providing economic incentives for businesses to reduce their greenhouse gas emissions. The Act also sets up the Jobs and Competitiveness Program, offering assistance to emissions-intensive trade-exposed industries to help them remain competitive in a market with a carbon price (ss 105-140). Furthermore, the Act introduces measures to support the coal-fired electricity generation sector, ensuring it can transition to a low-carbon future (ss 141-166).
The Act imposes several obligations on entities and parties it governs. Covered entities, which include businesses that emit a significant amount of greenhouse gases, must participate in the carbon pricing mechanism by surrendering emissions units that correspond to their carbon pollution (ss 42-46). These entities are also required to monitor and report their emissions accurately, ensuring compliance with the obligations set out in the Act (ss 47-52). Additionally, the Act mandates that the Clean Energy Regulator (the Regulator) oversee the implementation of the carbon pricing mechanism, including monitoring compliance, issuing licences, and managing the allocation of emissions units (ss 183-195). The Regulator is also responsible for administering the Jobs and Competitiveness Program, ensuring that eligible industries receive the necessary assistance to mitigate the impacts of the carbon price (ss 105-140).
Breaching the provisions of the Clean Energy Act 2011 can lead to various offences, penalties, and consequences. For instance, failure to surrender the required emissions units can result in significant financial penalties, with the maximum penalty being the greater of $10,000 or three times the number of emissions units that should have been surrendered (s 285). Additionally, providing false or misleading information in the monitoring and reporting of emissions is an offence that carries a maximum penalty of $126,000 for individuals and $630,000 for corporations (s 276). The Act also provides for civil penalties for non-compliance, which can be enforced by the Regulator through the Federal Court (ss 310-312). Criminal sanctions are also possible for serious or repeated breaches, with potential imprisonment terms of up to five years for individuals and fines of up to $315,000 for corporations (ss 281-285). These measures ensure that the Act's provisions are enforced rigorously, maintaining the integrity of the carbon pricing mechanism and supporting Australia's climate change objectives.