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Client Update: Jobs and Competitiveness Program regulations released

23 September 2011 

In brief: The Department of Climate Change and Energy Efficiency has released exposure draft regulations to establish the assistance program under which free carbon units issued pursuant to the carbon pricing scheme will be provided to emissions-intensive trade-exposed industries. Partner Grant Anderson reports.

Introduction

The Department of Climate Change and Energy Efficiency has released exposure draft regulations to establish the Jobs and Competitiveness Program under the Clean Energy Bill 2011. These regulations specify the emissions-intensive trade-exposed activities that are eligible for free carbon units. Currently there are 31 such activities, although it is contemplated that more will be added once they have been formally assessed according to the requirements outlined in the Federal Government's paper Establishing the eligibility of activities under the Jobs and Competitiveness Program, September 2011.

The draft regulations

The regulations set out the allocative baselines (direct emissions per unit of production, electricity per unit of production and feedstock natural gas per unit of production) for each emissions-intensive trade-exposed activity, as well as the classification of each activity as highly emissions-intensive (entitled to an initial 94.5 per cent level of assistance) or moderately emissions-intensive (entitled to an initial 66 per cent level of assistance). However, the provisions regarding the 'top up' assistance that is to be provided for LNG projects to ensure that they receive free carbon units sufficient to cover 50 per cent of their total emissions (associated with extraction, processing, production and transport) have yet to be released.

The regulations also specify:

  • who is eligible to apply for the free carbon units in respect of an emissions-intensive trade-exposed activity;
  • the information that is required to be provided in support of such an application;
  • the manner in which an eligible entity's entitlement to free carbon units is to be calculated;
  • the calculation of the quantity of free carbon units that is to be provided where the facility undergoes a significant expansion, is a new facility (in which case a cap applies) or is to be closed;
  • the calculation of the quantity of free carbon units that is to be provided in respect of sub-threshold facilities;
  • the provisions that apply in calculating the free carbon units that are to be allocated in respect of a facility that is a large electricity user (ie a facility that consumes more than 2,000GWhpa of electricity). Eligibility for such assistance requires the disclosure of a substantial amount of information to the Clean Energy Regulator and an application for assistance must be made before 1 August 2012; and
  • the requirements regarding reporting and record keeping.

Next steps

Submissions on the exposure draft regulations are due by 28 October 2011.

If you would like advice in connection with the draft regulations, or assistance in making a submission, please contact any of the people below.

For further information, please contact:

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