House debates

Tuesday, 11 October 2011

Bills

Clean Energy Bill 2011, Clean Energy (Consequential Amendments) Bill 2011, Clean Energy (Income Tax Rates Amendments) Bill 2011, Clean Energy (Household Assistance Amendments) Bill 2011, Clean Energy (Tax Laws Amendments) Bill 2011, Clean Energy (Fuel Tax Legislation Amendment) Bill 2011, Clean Energy (Customs Tariff Amendment) Bill 2011, Clean Energy (Excise Tariff Legislation Amendment) Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011, Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011, Clean Energy (Unit Shortfall Charge — General) Bill 2011, Clean Energy (Unit Issue Charge — Auctions) Bill 2011, Clean Energy (Unit Issue Charge — Fixed Charge) Bill 2011, Clean Energy (International Unit Surrender Charge) Bill 2011, Clean Energy (Charges — Customs) Bill 2011, Clean Energy (Charges — Excise) Bill 2011, Clean Energy Regulator Bill 2011, Climate Change Authority Bill 2011, Steel Transformation Plan Bill 2011; Consideration in Detail

5:39 pm

Photo of Greg CombetGreg Combet (Charlton, Australian Labor Party, Minister for Climate Change and Energy Efficiency) Share this | Hansard source

I present the supplementary explanatory memorandum to the Clean Energy Bill 2011. I move amendments (1) to (48) to the Clean Energy Bill 2011:

(1) Clause 5, page 12 (line 24), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(2) Clause 5, page 14 (after line 22), after the definition of executive officer, insert:

exempt landfill emissions, in relation to a landfill facility, has the meaning given by section 32A.

(3) Clause 5, page 20 (line 26), after "sections", insert "11AA, 11AB,".

(4) Clause 20, page 38 (line 14), omit "supply", substitute "use that resulted in that combustion".

(5) Clause 20, page 38 (line 31), omit "supply", substitute "use that resulted in that combustion".

(6) Clause 21, page 41 (line 12), omit "supply", substitute "use that resulted in that combustion".

(7) Clause 21, page 41 (line 29), omit "supply", substitute "use that resulted in that combustion".

(8) Clause 22, page 44 (line 4), omit "supply", substitute "use that resulted in that combustion".

(9) Clause 22, page 44 (line 20), omit "supply", substitute "use that resulted in that combustion".

(10) Clause 23, page 45 (lines 25 and 26), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(11) Clause 23, page 46 (lines 8 and 9), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(12) Clause 23, page 47 (line 10), omit "supply", substitute "use that resulted in that combustion".

(13) Clause 23, page 47 (line 27), omit "supply", substitute "use that resulted in that combustion".

(14) Clause 24, page 49 (lines 26 and 27), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(15) Clause 24, page 50 (lines 8 and 9), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(16) Clause 24, page 51 (line 2), omit "supply", substitute "use that resulted in that combustion".

(17) Clause 24, page 51 (line 19), omit "supply", substitute "use that resulted in that combustion".

(18) Clause 25, page 53 (lines 23 and 24), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(19) Clause 25, page 54 (lines 5 and 6), omit "covered emissions and legacy emissions", substitute "covered emissions, legacy emissions and exempt landfill emissions".

(20) Clause 25, page 54 (line 22), omit "supply", substitute "use that resulted in that combustion".

(21) Clause 25, page 55 (line 7), omit "supply", substitute "use that resulted in that combustion".

(22) Clause 30, page 63 (after line 4), after subclause (9), insert:

Exclusion of exempt landfill emissions from landfill facilities

(9A) For the purposes of this Act, a covered emission from the operation of a landfill facility does not include exempt landfill emissions from the operation of the facility.

(23) Heading to Subdivision F, page 64 (line 1), omit "Legacy emissions", substitute "Emissions".

(24) Clause 32, page 64 (lines 9 and 10), omit "the regulations", substitute "a determination under subsection 10(3) of the National Greenhouse and Energy Reporting Act 2007".

(25) Page 64 (after line 12), at the end of Subdivision F, add:

32A Exempt landfill emissions

  For the purposes of this Act, if:

(a) a person is a liable entity for an eligible financial year (the relevant eligible financial year) under a particular provision of Subdivision B of Division 2 of Part 3 in so far as that provision applies to a particular landfill facility; and

(b) the landfill facility's threshold number for the relevant eligible financial year is 10,000 for the purposes of that provision; and

(c) the following conditions are satisfied in relation to each earlier eligible financial year at any time during which the landfill facility was in existence:

  (i) no person was a liable entity for the earlier eligible financial year under Subdivision B of Division 2 of Part 3 in so far as that Subdivision applies to the landfill facility;

  (ii) the landfill facility's threshold number for the earlier eligible financial year was 25,000 for the purposes of a provision of that Subdivision; and

(d) an amount of greenhouse gas was emitted from the operation of the landfill facility during:

  (i) the relevant eligible financial year; or

  (ii) a later eligible financial year; and

(e) waste was accepted by the landfill facility during the period:

  (i) beginning on 1 July 2012; and

  (ii) ending immediately before the start of the relevant eligible financial year;

so much of the amount mentioned in paragraph (d) as is, under a determination under subsection 10(3) of the National Greenhouse and Energy Reporting Act 2007, taken to be attributable to waste accepted by the facility during the period mentioned in paragraph (e) is an exempt landfill emission from the operation of the landfill facility.

(26) Clause 33, page 65 (line 10), omit "supply", substitute "use".

(27) Clause 35, page 66 (after line 17), after paragraph (1)(a), insert:

(aa) it may reasonably be expected that the natural gas is wholly or partly for use by the OTN holder; and

(28) Clause 35, page 66 (line 19), omit "supply", substitute "use".

(29) Clause 35, page 68 (lines 33 to 35), omit paragraph (7)(c).

(30) Clause 36, page 70 (after line 2), after paragraph (1)(a), insert:

(aa) it may reasonably be expected that the natural gas is wholly or partly for use by the OTN holder; and

(31) Clause 36, page 70 (line 6), omit "supply", substitute "use".

(32) Page 70 (after line 21), at the end of Division 3, add:

36A Extended meaning of use

  For the purposes of this Division, if:

(a) a person (the first person) provides an amount of natural gas for use by another person; and

(b) the provision of the natural gas does not involve a supply of the natural gas;

any use of the natural gas by the other person is taken to be use by the first person.

(33) Clause 55B, page 83 (line 12), omit "supply", substitute "use".

(34) Clause 56, page 84 (after line 3), after paragraph (1)(a), insert:

(aa) it may reasonably be expected that the natural gas is wholly or partly for use by the recipient; and

(35) Clause 56, page 84 (line 5), omit "supply", substitute "use".

(36) Clause 56, page 84 (lines 7 and 8), omit paragraph (1)(d).

(37) Clause 56, page 85 (line 7), omit "the facility", substitute "an eligible facility of the applicant".

(38) Clause 56, page 85 (after line 12), after subclause (6), insert:

(6A) For the purposes of subsection (6), a facility is an eligible facility of the applicant if:

(a) the facility is under the operational control of the applicant; or

(b) the following conditions are satisfied:

  (i) the facility is under the operational control of another person;

  (ii) the applicant provides natural gas to the other person for use in the operation of the facility;

  (iii) the provision of the natural gas does not involve a supply of the natural gas.

(39) Clause 57, page 85 (after line 19), after paragraph (1)(a), insert:

(aa) it may reasonably be expected that the natural gas is wholly or partly for use by the recipient; and

(40) Clause 57, page 85 (line 21), omit "supply", substitute "use".

(41) Clause 57, page 85 (lines 23 and 24), omit paragraph (1)(d), substitute:

(d) it is intended that the whole or a part of that amount will be used as a feedstock;

(42) Clause 58, page 86 (after line 14), after paragraph (1)(a), insert:

(aa) it may reasonably be expected that the natural gas is wholly or partly for use by the recipient; and

(43) Clause 58, page 86 (line 16), omit "supply", substitute "use".

(44) Clause 58, page 86 (lines 18 to 20), omit paragraph (1)(d), substitute:

(d) the natural gas is to be used, in the course of carrying on a business, to manufacture compressed natural gas, liquefied natural gas or liquid petroleum gas;

(45) Page 87 (after line 4), at the end of Subdivision C, add:

58A Extended meaning of use

  For the purposes of this Subdivision, if:

(a) a person (the first person) provides an amount of natural gas for use by another person; and

(b) the provision of the natural gas does not involve a supply of the natural gas;

any use of the natural gas by the other person is taken to be use by the first person.

(46) Clause 92A, page 121 (after line 25), after subclause (4), insert:

(4A) For the purposes of this section, in determining whether an entity is entitled to a fuel tax credit in respect of the acquisition, manufacture or import of an amount of taxable fuel, disregard section 41-30 of the Fuel Tax Act 2006.

(47) Clause 125, page 163 (lines 26 to 28), omit paragraph (7)(b), substitute:

(b) the number of eligible Australian carbon credit units exceeds:

  (i) if at least 50% of the total of the interim emissions numbers of the person for the relevant eligible financial year is attributable to, or to estimates of, provisional emissions numbers under Subdivision B of Division 2 of Part 3 (which deals with landfill facilities)—the total of the interim emissions numbers of the person for the relevant eligible financial year; or

  (ii) otherwise—5% of the total of the interim emissions numbers of the person for the relevant eligible financial year;

(48) Clause 128, page 169 (lines 12 and 13), omit paragraph (7)(b), substitute:

(b) the number of eligible Australian carbon credit units exceeds:

  (i) if at least 50% of the person's emissions number for the relevant eligible financial year is attributable to provisional emissions numbers under Subdivision B of Division 2 of Part 3 (which deals with landfill facilities)—the person's emissions number for the relevant eligible financial year; or

  (ii) otherwise—the number worked out using the formula in subsection (8);

Amendments (1) to(10), (11), (14), (15), (18), (19) and (22) to (25) that appear on sheet 267 deal with issues associated with landfill waste. The Clean Energy Bill provides that landfill facilities with emissions of at least 10,000 tonnes but less than 25,000 tonnes of carbon dioxide equivalents will be covered by the carbon-pricing mechanism if they are within a prescribed distance of a designated large landfill facility with emissions of at least 25,000 tonnes. This provision was intended to address the risk of waste being diverted from large landfills to smaller neighbouring landfills. The government has decided to set the initial prescribed distance at zero so that operators of small landfills will not be liable on 1 July 2012 and for at least the first three years of the scheme. This will provide time to gather evidence rather than projections of waste diversion to smaller landfills and to have the prescribed distance rule reviewed by the Climate Change Authority no later than 2015-16. Any future increases in the prescribed distance could bring additional small landfills into the mechanism for the first time. It is also possible that small landfills will become liable for the first time because another landfill within the prescribed distance will start to pass the 25,000-tonne threshold.

The amendments I have moved will reduce the regulatory uncertainty for landfill operators regarding the future operation of the prescribed distance rule. These amendments will ensure that, if the prescribed distance is increased following the review, small landfills brought into the carbon price mechanism will not be liable for emissions from waste deposited retrospectively. The small landfill will only be liable for emissions from the waste that is deposited in the financial year that coverage of the landfill commences and subsequent years. They will not face liabilities as a result of these factors beyond their control.

The amendments also provide for legacy and exempt landfill emissions to be measured using the NGER determination under section 10 (3) of the National Greenhouse and Energy Reporting Act rather than regulations. Amendment (3) is a minor technical amendment which is consequential on the amendments in (1), (3) to (6) and (9) of sheet 257. Those amendments deal with situations where no person has clear operational control of a facility. Amendments (4) to (9), (12), (13), (16), (17), (20), (21) and (26) to (45) are technical amendments to ensure that natural gas liability works the same way whether or not the end user of the gas owned the gas. These amendments respond to comments made by some stakeholders during the inquiry of the Joint Select Committee on Australia's Clean Energy Future Legislation. In some cases, gas is provided for use without transfer of ownership of the gas. For instance, the owner of a facility might buy gas for the facility and make it available for use at the facility without transferring ownership in the gas to the contracted operator of the facility.

Amendment (46) on sheet 267 is a technical amendment to the opt-in scheme to ensure that aviation fuel users can use the opt-in scheme as intended. The amendment seeks to clarify that fuel users may opt into the carbon-pricing mechanism, even if the user or another entity becomes entitled to a fuel tax credit after opting in. The amendment will ensure that the opt-in scheme operates as intended and will remove any doubt as to the validity of aviation fuel users. Amendments (47) and (48) on sheet 267 will allow local councils and other landfill operators to discharge a larger proportion of their emissions using eligible CFI credits than currently permitted during the fixed price years of the carbon price mechanism. The surrender limit will be raised by these amendments from five per cent to 100 per cent of an operator's liability if the majority of liability is attributable to landfill emissions. The amendments are restricted to emitters in the landfill sector because they are in the unusual position of being able to generate CFI credits by implementing projects to capture legacy emissions at the same time as they have to surrender emissions units to discharge their liabilities. The added flexibility under these amendments will reduce the compliance burden on local councils and commercial landfill operators. Mr Deputy Speaker, if it is convenient to the House, and I understand it may be so with the Leader of the Opposition, it may be useful for me to move the remaining government amendments together.

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