House debates

Wednesday, 23 May 2012


Clean Energy Legislation Amendment Bill 2012; Second Reading

9:40 am

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

I move:

That this bill be now read a second time.

This bill makes amendments to the Clean Energy Act 2011 and related acts.

These amendments support the establishment of the Clean Energy Finance Corporation. They also address commitments made by the government during the passage of the original legislation or are minor and technical amendments designed to improve the operation of the carbon pricing mechanism.

Gaseous fuels

During passage of the Clean Energy Act in 2011 the government, following consultation with industry, committed to consider the coverage of gaseous fuels—which include liquefied petroleum gas, liquefied natural gas and compressed natural gas—in a similar way to how large liquid fuel users may be able to opt into the carbon price mechanism.

This commitment responded to representations by the gaseous fuels sector and to a recommendation made by the Joint Select Committee on Australia's Clean Energy Future Legislation.

Today, following those consultations and the committee's recommendations, the government honours the commitment that we made, which provides the gaseous fuels sector with the flexibility it sought to meet its carbon price liabilities. The gaseous fuels sector has expressed a strong preference to be able to access the carbon market and be part of the emissions trading scheme that we have legislated. This is a similar preference that companies like Qantas and Virgin expressed to the government last year about their ability to be covered by the Clean Energy Act 2011.

The government has consulted extensively with participants in the gaseous fuels sector to develop the approach proposed in this bill.

From 1 July 2012, compressed natural gas, CNG, will be covered by the carbon pricing mechanism, rather than the fuel tax system. This bill, together with the Clean Energy (Excise Tariff Legislation Amendment) Bill 2012 and the Clean Energy (Customs Tariff Amendment) Bill 2012, which I will address and introduce shortly, give effect to that change.

Furthermore, from 1 July 2013, LPG, liquefied petroleum gas, and LNG, liquefied natural gas, will be covered by the mechanism. A transitional period will allow the required administrative changes to be made by the industry, as well as within the Australian Taxation Office and the Clean Energy Regulator.

The government has been working with industry on arrangements to streamline and reduce costs during this transitional period.

CNG is covered from 2012, as I said, as it may be treated as natural gas for the purposes of the carbon price mechanism.

These measures were notified to stakeholders and then announced in the 2012-13 budget.

National Greenhouse and Energy Reporting Act 2007

The bill also amends the National Greenhouse and Energy Reporting Act 2007 to enhance its operation for reporting entities.

A person with 'operational control' of a facility is generally responsible for carbon price liability and associated reporting obligations. Where operational control is not clear, a nomination may be made. The bill streamlines the requirements for nomination. Annual nominations will no longer be required and nominations may last for as long as required.

The bill provides that the regulator only needs to publish a 'net energy consumption'. An additional requirement to publish 'total energy consumption' is removed. The 'net energy consumption' requirement is more appropriate because it does not include the transformation of one energy commodity into another.

Carbon Credits (Carbon Farming Initiative) Act 2011

The bill also makes technical amendments to the Carbon Credits (Carbon Farming Initiative) Act 2011 to ensure the robustness of the processes supporting the Carbon Farming Initiative.

The bill maintains the integrity of the Carbon Farming Initiative by requiring that projects have secured all required regulatory approvals before they receive any credits. It simplifies the process of finalising methodology determinations by clarifying the material to be used by the Domestic Offsets Integrity Committee in making determinations.

The bill provides more time to approve methodologies for existing projects to facilitate the transition of these projects into the CFI. Methodologies submitted for assessment by the middle of 2012, and approved by the middle of 2013, can be backdated to the middle of 2010 and that will improve the operation of the Carbon Farming Initiative for project proponents.

Australian National Registry of Emissions Units Act 2011

The bill amends the Australian National Registry of Emissions Units Act 2011 to enhance the security of the registry.

The bill increases the amount of time during which the Clean Energy Regulator may defer giving effect to a transfer instruction from 48 hours to five business days, giving the regulator time to make decisions about deferral and deal with suspicious transactions.

The bill also provides for conditions restricting or limiting the operation of certain accounts to apply in prescribed circumstances.

Clean Energy Finance Corporation

As I indicated earlier, the bill amends legislation establishing the Australian Renewable Energy Agency and the Clean Energy Regulator to provide for the appropriate sharing of information between those agencies and the Clean Energy Finance Corporation.

These amendments will enhance the operation of the carbon pricing mechanism and support the establishment of the Clean Energy Finance Corporation, whose establishing bill I previously introduced to the House. I commend this amendment bill to the House.

Debate adjourned.