Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.1) 2017

Overview

The Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.1) 2017 was enacted to address the specific needs of JKC Australia LNG Pty Ltd, which had sourced three custom designed three phase cage induction electric motors for its Ichthys LNG Onshore Project in Darwin. These motors were found to not meet the minimum energy efficiency standards as outlined in the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012, deviating by one percent or less. The exemption was granted under section 37 of the Greenhouse and Energy Minimum Standards Act 2012, enabling the Greenhouse and Energy Minimum Standards Regulator to exempt certain products from compliance requirements. The exemption was approved based on the minimal negative impact on Australia's greenhouse gas emissions and the significant costs and potential delays to the project if the exemption were not granted. This Instrument exempts two of the three motors, subject to conditions that limit the exemption to the supply and use of these models solely at the Ichthys LNG Onshore Project.

Scope and Application

The Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.1) 2017 applies to three specific three phase cage induction electric motors used in the Ichthys LNG Onshore Project in Darwin, sourced by JKC Australia LNG Pty Ltd. This instrument is an exemption from the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012, granted under Section 37 of the Greenhouse and Energy Minimum Standards Act 2012. The exemption applies to the specified electric motors which do not meet the energy efficiency minimum standards by one percent or less. The exemption is limited to the supply and use of these motors at the Ichthys LNG Onshore Project, and is subject to certain conditions that were considered necessary by the GEMS Regulator to mitigate any potential negative impacts on greenhouse gas emissions. The Instrument extends the application of the Act by providing a legislative framework for exemptions from specific energy efficiency standards for certain products, subject to certain conditions, in cases where compliance would result in significant costs or delays.

Key Provisions

The main operative sections of the Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.1) 2017 (Instrument) are Sections 5 and 6. Section 5 exempts the specified three-phase electric motors from the energy use and testing requirements of section 6 of the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012. This exemption is specifically tailored to the three custom-designed electric motors sourced by JKC Australia LNG Pty Ltd for its Ichthys LNG Onshore Project. The exemption applies only to these particular models and only for their use within the Ichthys LNG Onshore Project. Section 6 sets out the conditions under which the exemption is granted, ensuring that the exemption does not lead to a significant negative impact on Australia’s greenhouse gas emissions and acknowledging the significant costs and potential delays that would be incurred if the exemption were not granted. The Instrument imposes certain obligations on the parties involved, primarily JKC Australia LNG Pty Ltd. Firstly, they must ensure that the exempt models are used solely within the Ichthys LNG Onshore Project, as specified in the conditions of the exemption. This limitation is crucial to maintaining the balance between the project's operational needs and the environmental objectives of the GEMS Act. Additionally, JKC Australia must comply with any other conditions specified in Section 6 of the Instrument, which may include reporting requirements or other administrative obligations to ensure transparency and accountability in the use of the exempt models. The GEMS Regulator retains the authority to monitor compliance with these conditions and may take action if non-compliance is identified. Failure to adhere to the conditions of the exemption or the misuse of the exempt models could result in significant legal consequences. While the Instrument itself does not explicitly list offences or penalties, breaches of conditions imposed by the GEMS Act or the regulations made under it can lead to enforcement actions by the GEMS Regulator. This may include the imposition of fines, legal proceedings, or other administrative penalties. The severity of these penalties can vary depending on the nature and extent of the breach, but they are intended to ensure that the exemption does not undermine the broader objectives of the GEMS Act to reduce greenhouse gas emissions and improve energy efficiency. The Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.1) 2017 aims to balance the needs of specific industrial projects with the overarching goal of reducing greenhouse gas emissions. By exempting the specified three-phase electric motors from certain energy efficiency requirements, the Instrument acknowledges the practical challenges faced by the Ichthys LNG Onshore Project while imposing conditions to mitigate any potential environmental impact. The obligations and potential consequences for non-compliance underscore the importance of adhering to the terms of the exemption and ensuring that the benefits of the exemption do not come at the expense of broader environmental goals.