EXPLANATORY STATEMENT
Issued by the Authority of the Greenhouse and Energy Minimum Standards Regulator
Greenhouse and Energy Minimum Standards Act 2012
Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.3) 2016
Purpose and Operation
Section 37 of the Greenhouse and Energy Minimum Standards Act 2012 (the Act) enables the GEMS Regulator, by legislative instrument, to exempt models of GEMS products from one or more requirements of a GEMS determination in relation to all or specified supplies or uses of products of that model and enables the GEMS Regulator to specify conditions to which the exemption is subject. GEMS determinations are defined in section 11 of the Act.
Section 37 also provides that regulations may be made in order to provide a framework for administrative processes around the submission and assessment of applications for exemption.
The purpose of the Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.3) 2016 (the Instrument) is to exempt the specified three phase electric motors from the GEMS level requirements contained in section 6 of the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012 (the Determination).
JKC Australia LNG Pty Ltd (JKC Australia) has sourced custom designed three phase electric motors needed for its Ichthys LNG Onshore Project in Darwin. JKC Australia has sought an exemption from the Determination due to the significant costs, and potential delays, to the Ichthys LNG Onshore Project if a replacement motor is sourced.
Consultation
The exemption set out in the Instrument was considered on application from the applicant named in the Instrument. Since the Instrument will only exempt the motors currently held by the applicant, consultation was only undertaken with the applicant for the purposes of clarification of their application.
Detailed description of provisions in the Instrument
- Name of Instrument
Section 1 sets out the name of the Instrument.
2. Authority
Section 2 sets out the provision of the Act under which the Instrument is made.
3. Commencement
Section 3 sets out the commencement arrangements for the Instrument.
4. Definitions
Section 4 sets out the definition of terms used in the Instrument. The term ‘Exempt Model’ is defined in section 5 of the Instrument.
5. Exemption
Section 5 exempts the motor model specified in clause 1 of the Schedule to the Instrument (the Exempt Model) from the energy use and testing requirements of section 6 of the Determination, subject to the conditions specified in section 6 of the Instrument.
6. Conditions of Exemption
Section 6 specifies the conditions to which the exemption is subject.
7. Schedule – Exemption and conditions of exemption
The Schedule to the Instrument sets out the following terms:
- specifications of the Exempt Model;
- the requirements of the Determination from which the model is exempt;
- the supply and use to which the exemption applies; and
- conditions of the exemption.
Overview
The Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.3) 2016 was introduced to provide an exemption from specific energy efficiency requirements for three phase electric motors, as outlined in the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012. Enacted by the Greenhouse and Energy Minimum Standards Regulator under section 37 of the Greenhouse and Energy Minimum Standards Act 2012, the instrument aims to address the significant costs and potential delays that JKC Australia LNG Pty Ltd (JKC Australia) would incur in sourcing replacement motors for its Ichthys LNG Onshore Project in Darwin. The exemption was granted following consultation with JKC Australia, focusing on clarifying their application for exemption due to the specific nature of the exemption to the motors currently held by the applicant. The policy objective is to facilitate the project's progress by allowing the use of motors that do not meet the specified energy efficiency standards, subject to certain conditions aimed at mitigating any potential negative environmental impacts.
Scope and Application
The Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.3) 2016 applies specifically to three phase electric motors used in the Ichthys LNG Onshore Project by JKC Australia LNG Pty Ltd. The Instrument provides an exemption from the energy use and testing requirements stipulated in the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012 for the specified three phase electric motors, subject to certain conditions. This exemption was sought by JKC Australia due to the potential financial burden and project delays that could arise from sourcing replacement motors. The exemption applies solely to the particular motors held by the applicant and is effective under the authority granted by section 37 of the Greenhouse and Energy Minimum Standards Act 2012. The conditions of the exemption, outlined in section 6 of the Instrument, must be adhered to, and consultation for this exemption was limited to JKC Australia to clarify their specific application.
Key Provisions
The main operative sections of the Greenhouse and Energy Minimum Standards (Exemption) Instrument (No.3) 2016 (the Instrument) pertain to the exemption of specific models of three phase electric motors from certain energy use and testing requirements. Section 5 of the Instrument exempts the specified motor model from the energy use and testing requirements as outlined in section 6 of the Greenhouse and Energy Minimum Standards (Three Phase Cage Induction Motors) Determination 2012 (the Determination). This exemption is subject to specific conditions outlined in section 6 of the Instrument. These conditions are further detailed in the Schedule, which includes the specifications of the exempt model, the particular requirements of the Determination from which the model is exempt, and the conditions under which the exemption applies.
The Instrument imposes several obligations and requirements on the parties governed by it. JKC Australia LNG Pty Ltd, as the applicant for the exemption, must ensure that the exempt motor model adheres to the conditions specified in section 6 of the Instrument. This includes ensuring that the motor model is used strictly in accordance with the specified supply and use outlined in the Schedule. The Instrument also mandates that any modifications to the motor model must be reported to the GEMS Regulator, as any change may affect the eligibility for the exemption.
In terms of the consequences of breach, the Act does not explicitly outline specific offences, penalties, or civil/criminal consequences for breaching the conditions of the exemption within the Instrument itself. However, under the general provisions of the Greenhouse and Energy Minimum Standards Act 2012, non-compliance with GEMS requirements can lead to significant penalties. For example, section 43 of the Act stipulates that a person who contravenes a GEMS determination is liable to a penalty. The penalty for a corporation can be up to $210,000, and for an individual, it can be up to $42,000, depending on the severity and frequency of the offence. Additionally, ongoing non-compliance may lead to further enforcement actions, including court proceedings which could result in higher penalties or even imprisonment for serious breaches.