Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1)

Administered by Department of the Environment and Energy

Legislation au F2012L01254 Regulations Not in force Legislative Instrument

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EXPLANATORY STATEMENT

 

Select Legislative Instrument 2012 No. 111

 

Subject - Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995

 Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1)

 

Section 5 of the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 (the Manufacture Levy Act) provides that the Governor-General may make regulations for the purposes of various sections Manufacture Levy Act.  The Manufacture Levy Act imposes a levy on the manufacture of ODSs and SGGs. The Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004 (the Manufacture Levy Regulations) prescribe the rates of levy in dollar amounts in relation to the weight of ozone depleting substances (ODSs) and Synthetic Greenhouse Gases (SGGs) manufactured.

 

The Commonwealth charges levies for the import and manufacture of hydrochlorofluorocarbons (HCFCs), synthetic greenhouse gases (SGGs) and methyl bromide (MB) to cover the costs of administering the licensing scheme for the import, export and manufacture of ODSs and SGGs.

 

The Manufacture Levy Act was amended by the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Act 2011, to amend the way in which the levy is calculated to include the new carbon charge component which would come into effect on 1 July 2012.

 

The Regulation would amend the way in which the levy is calculated to include a new carbon charge component. The Regulation would also prescribe details about the global warming potential of synthetic greenhouse gases and prescribe the rates of the levy.

 

Details of the proposed Regulation are set out in the Attachment A.

 

The statement of compatibility with human rights is at Attachment B.

 

The Act specifies no conditions that need to be satisfied before the power to make the proposed Regulation may be exercised.

 

The proposed Regulation would be a legislative instrument for the purposes of the Legislative Instruments Act 2003.

 

The proposed Regulation would commence on 1 July 2012.

 

The Minute recommends that the Regulation be made in the form proposed.

 

Authority:  Section 5 of the Ozone Protection

and Synthetic Greenhouse Gas

(Manufacture Levy) Act 1995

ATTACHMENT A

 

Details of the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1)

 

Section 1 – Name of Regulation

 

This regulation provides that the title of the Regulation is the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1) (the Manufacture Levy Act).

 

Section 2 – Commencement

 

This provides that the Regulation commences on 1 July 2012.

 

Section 3 – Amendment of the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004

 

This regulation provides that the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004 are amended as set out in Schedule 1.

 

Schedule 1 – Amendment

 

Item 1 Regulation 5

 

This substitutes the existing regulation 5 for new regulations 5 to 7.

 

New Regulation 5 - Value for calculation of carbon dioxide equivalence for an amount of SGG

 

Regulation 5(1) provides a table outlining SGGs and their global warming potential amount (GWP value) for the purposes of working out the carbon dioxide equivalence of an amount of an SGG under subsection 2B (1) of the Manufacture Levy Act.

 

These GWP values are those agreed in the Kyoto Protocol.

 

The note below the table refers to the source document from which the GWP values in the table are derived from.

 

Regulation 5(2) provides for calculating the carbon charge component of the levy for blends of different types of SGGs and ODSs with a worked example provided for illustrative purposes.

 

New Regulation 6 – Manufacture Levy rate‑SGGs

 

This defines the prescribed rate for the manufacturing of SGGs at $165 per tonne for the purposes of subsection 3A(5) of the Manufacturing Levy Act for.

 


New Regulation 7 – Manufacture Levy rate‑substances other than SGGs

 

This defines the prescribed rate for manufacturing of HCFCs at $3000 per ozone depleting potential (ODP) tonne and for methyl bromide at $135 per tonne for the purposes of subsection 4(1) of the Manufacture Levy Act.

 

ATTACHMENT B

Statement of Compatibility with Human Rights

Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011

 

Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995

Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Regulations 2004

Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004

 

These Legislative Instruments are compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.

 

Overview of the Bill/Legislative Instrument

The Legislative Instruments make technical amendments to reflect the application of an equivalent carbon price for synthetic greenhouse gases.  The changes to the respective Acts were made as a part of the Australian Government’s Clean Energy Future Legislation Package in 2011.

The Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 (the Act) provides measures to meet Australia’s obligations under the Vienna Convention for the Protection of the Ozone Layer, the Montreal Protocol on Substances that Deplete the Ozone Layer, the United Nations Framework Convention on Climate Change and its Kyoto Protocol. In particular, the Act provides measures to protect the ozone layer from ozone depleting substances and to minimise emissions of synthetic greenhouse gases. Under the Act, ozone depleting substances and synthetic greenhouse gases are listed as scheduled substances.

The Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995 (the Principal Regulations) currently control the acquisition, manufacture, use, storage and disposal of ozone depleting substances and synthetic greenhouse gases.

The Regulation Amendments amend the Principal Regulations to administer the application of an equivalent carbon price on synthetic greenhouse gases and other technical amendments.

Human rights implications

The Legislative Instruments have been assessed against the seven human rights instruments forming the definition of 'human rights' under the Human Rights (Parliamentary Scrutiny) Act 2011.

The Legislative Instruments are consistent with the civil, political, economic, social, and cultural rights conferred by those instruments; are consistent with the rights conferred by those instruments on children and persons with disabilities; and are consistent with Australia's obligations under those instruments not to discriminate on the basis of race, not to discriminate against women, and not to allow torture or other cruel, inhuman or degrading treatment.

Conclusion

The Legislative Instruments are compatible with Australia's human rights obligations.

 

Senator the Hon Don Farrell, Parliamentary Secretary for Sustainability and Urban Water

 

 

Overview

The Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1) was enacted to address the issue of synthetic greenhouse gases (SGGs) and their contribution to global warming, as part of Australia’s commitment to the international climate agreements including the Kyoto Protocol. This regulation amends the existing Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004 to introduce a carbon charge component in the calculation of the levy on the manufacture of SGGs, in line with the new carbon pricing mechanism introduced by the Australian Government. The regulation was made under the authority of section 5 of the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 by the Governor-General. The policy objective of these amendments is to align the domestic regulation of SGGs with international efforts to mitigate climate change by ensuring that the manufacture of these substances is subject to a financial charge reflective of their global warming potential. This regulatory change is intended to support the overarching goals of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, which seeks to protect the ozone layer and reduce emissions of substances that contribute to climate change. The regulation ensures that the manufacture of SGGs is economically penalised in a manner consistent with international standards, thereby encouraging reduced emissions and compliance with global climate policies. The regulation commenced on 1 July 2012, aligning with the introduction of the carbon pricing mechanism in Australia.

Scope and Application

The Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 applies to entities involved in the manufacture of ozone depleting substances (ODS) and synthetic greenhouse gases (SGG) within Australia. The Act imposes a levy on the manufacture of these substances to cover the costs of administering the licensing scheme for the import, export, and manufacture of ODS and SGGs. The Act operates nationally across the Commonwealth, and its regulations can be amended through subordinate instruments such as the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1). This amendment regulation introduced a new carbon charge component to the levy calculation, aligning with the Australian Government's Clean Energy Future Legislation Package in 2011. The new regulation also prescribed the rates of the levy for different substances, including SGGs, hydrochlorofluorocarbons (HCFCs), and methyl bromide (MB). The changes were designed to reflect an equivalent carbon price for SGGs and were implemented on 1 July 2012. The Act and its regulations are compatible with Australia's human rights obligations as per the Human Rights (Parliamentary Scrutiny) Act 2011.

Key Provisions

The Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1) (the Regulation) amends the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Regulations 2004 (the Manufacture Levy Regulations). This regulation introduces new provisions that change the way the levy is calculated to include a carbon charge component. The regulation specifies global warming potential (GWP) values for synthetic greenhouse gases (SGGs) (Regulation 5), sets the levy rate for SGGs at $165 per tonne (Regulation 6), and specifies the levy rates for hydrochlorofluorocarbons (HCFCs) and methyl bromide at $3000 per ozone depleting potential (ODP) tonne and $135 per tonne, respectively (Regulation 7). The new regulations are intended to align with Australia's obligations under international agreements such as the Kyoto Protocol, which aim to reduce greenhouse gas emissions and protect the ozone layer. Under the amended Manufacture Levy Regulations, parties and entities involved in the manufacture of SGGs, HCFCs, and methyl bromide must comply with the new rates and calculation methods set out in the Regulation. Manufacturers need to accurately determine the GWP of the SGGs they produce, apply the correct levy rates based on these values, and account for the new carbon charge component. These changes necessitate updates to the manufacturers' internal accounting and reporting processes to ensure compliance with the updated regulations. Failure to comply with the amended Manufacture Levy Regulations can result in significant legal and financial consequences. Entities that do not correctly apply the new levy rates or calculation methods may face penalties under the Manufacture Levy Act. The penalties for non-compliance could include fines and other sanctions, although the specific penalties are not detailed in the provided document. Ensuring adherence to these regulations is critical for manufacturers to avoid legal repercussions and to contribute effectively to environmental protection objectives. In summary, the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Regulation 2012 (No. 1) introduces critical changes to the calculation and application of levies on the manufacture of certain substances. It requires manufacturers to adopt new methods for calculating the carbon charge component and to apply updated levy rates. Non-compliance with these regulations can lead to penalties, underscoring the importance of accurate and timely adherence to the new provisions. The changes align with Australia's international commitments to mitigate the impacts of ozone-depleting substances and greenhouse gases, ensuring continued protection of the environment and compliance with global standards.

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