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By Mark Beaufoy and Laura Schuijers
July 1 marked the first day of the first compliance year under Australia's carbon pricing mechanism (CPM). Entities liable under the CPM will need to record and report their covered greenhouse gas emissions. The threshold emissions level for an entity to be liable is 25,000 tonnes of carbon dioxide equivalent (CO2e), with liability payable by 1 February 2013. However, entities with emissions over 35,000 tonnes will need to pay 75% of their liability before 15 June 2013. From July 1, many businesses that use fuel will also pay a carbon price via a reduction in their fuel tax credit entitlements.
A little over a month prior to the commencement of the CPM, Climate Change Minister Greg Combet introduced a number of legislative amendments into Parliament. In summary, the amendments:
• Bring suppliers of non-transport fuels into the scheme from 1 July 2012 for compressed natural gas (CNG), and from 1 July 2013 for liquefied petroleum gas (LPG) and liquefied natural gas (LNG)
• Amend the National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act) to specify that the Clean Energy Regulator (Regulator), which began operation in April, only needs to publish net rather than total energy consumption, and to improve procedures for nominating who has operational control of a facility
• Allow the Regulator to have five days rather than two to defer giving effect to a transfer instruction, in order to properly deal with suspicious transactions
• Amend the legislation underpinning the Carbon Farming Mechanism (CFI) to require that projects have received regulatory approvals before any credits are granted, and to allow "back dating" for credits generated since mid-2010 (so long as the methodology is approved by mid 2013).
To learn more, read or download the complete report Climate Change Update - Australian Carbon Pricing Mechanism Takes Shape.
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