IEN workshop - part 4 (PPTx 1.92 mb)

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Carbon Pricing Mechanism Workshops
Opt-in Scheme
February 2013
Page 1
Disclaimer
This presentation provides general information regarding the Opt-in Scheme. It is not intended to
comprehensively cover all aspects of the scheme. Persons should refer to the relevant legislation
relating to the Opt-in Scheme and in particular the Clean Energy Act 2011 (Clean Energy Act), the
National Greenhouse and Energy Report Act 2007 (NGER Act), and their supporting Regulations.
Changes to legislation may affect the information in this presentation. This presentation is not
intended to provide legal advice. If persons have concerns or questions about the application of the
Opt-in Scheme in their particular circumstances, they should seek professional advice.
February 2013
Page 2
Overview of presentation
• Summary of Opt-In Scheme
• Eligibility process
• Consent and the opt-in amount
• Liable entity status
• Key dates
February 2013
Page 3
What is the Opt-in Scheme?
•
Users of large volumes of eligible liquid fuel can
manage their carbon liability for emissions generated
by this fuel use by participating in the Scheme.
•
This is instead of the payment of an equivalent carbon
price through the fuel tax system.
•
Opt-in Scheme applies many of the concepts used by
the ATO for fuel tax credits.
February 2013
Page 4
Key points to note
•
Applications to opt-in for the 2013-14 financial year
close on 2 April 2013.
•
The Opt-in Scheme is a 12-month commitment by
participants.
•
Opting-in doesn’t affect liability for direct emissions.
•
Liability established under the Opt-in Scheme cannot
be transferred (e.g. through an LTC).
February 2013
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Legislative basis of Opt-in Scheme
•
Section 92A of the Clean Energy Act 2011 provides for the formulation
of the Opt-in Scheme by the regulations. Under the Opt-in Scheme if a
person is declared a designated opt-in person (DOIP) in relation to an
amount of fuel and meets the other requirements of the Opt- in Scheme
the person will be liable under the Act for the emissions embodied in that
fuel.
•
The Clean Energy Regulations 2011 formulate the Opt-in Scheme and
establish the conditions under which a person may be declared a DOIP
and the administrative arrangements for opting-in and opting-out under
the Opt-in Scheme.
Page 6
Definition - eligible fuels
•
•
Eligible fuels are petroleum-based and subject to excise or
duty, and include:
•
Petrol
•
Diesel
•
Kerosene
•
Aviation kerosene
•
Aviation gasoline
•
Fuel oil
•
Heating oil
•
Diesel blends.
An entity opts-in for all eligible fuel.
February 2013
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Aviation Fuel and Fuel Tax Credits
• Excise duty for aviation fuel is increased to take
account of effective carbon price.
• Entities who have opted in will receive a fuel tax credit
for an amount equal to the carbon charge.
• Users will need to register for fuel tax credits before
1 July 2013 in order to claim fuel tax credits for aviation
fuel.
February 2013
Page 8
Management of carbon liability – before Opt-in*
*The fuel tax credit rates listed below and in the following slide are approximate rates only from 1 July 2013.
February 2013
Page 9
Management of carbon liability – after Opt-in*
*The fuel tax credit rates listed below and in the following slide are approximate rates only from 1 July 2013.
February 2013
Page 10
Current status
•
The application form is available from the Clean Energy
Regulator website.
•
Department of Climate Change and Energy Efficiency (DCCEE)
is intending to release exposure draft regulations to amend
National Greenhouse and Energy Reporting (NGER) Regulations
for reporting of fuels covered by the Opt-in Scheme in early 2013.
February 2013
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Application to be declared a DOIP
•
Application types
•
Application and eligibility requirements
•
Evidence requirements
•
Declaration by applicant’s executive officer (or equivalent)
February 2013
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Application types
Applications to be declared a DOIP may be received from:
 Single entity
 Representative member of a GST group
 GST group member as single entity, or
 GST joint venture operator of a GST joint venture.
February 2013
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Application requirements
•
Valid applicant
•
Eligibility test
•
Threshold test
February 2013
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Valid applicant
•
Applicant not a foreign person
•
Applicant not an individual
•
Other criteria:
 Applicant is the appropriate party as required by
regulations
 Consent has been provided as and where required by
regulations
February 2013
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Eligibility Test
 Registered for fuel tax credits
 Acquiring, manufacturing or importing eligible fuel for use,
not supply
 Eligible for fuel tax credit in respect of that fuel use
 Evidence requirements
February 2013
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Eligible for fuel tax credit
•
For entities applying on their own behalf:
 Applicant (or DOIP) was entitled to a fuel tax credit in
respect of fuel acquired, manufactured or imported for
use at the start of the financial year
February 2013
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Eligible for fuel tax credit
• For GST Group

Applicant (or DOIP) was the representative member of a GST
group or a GST group member at the start of the financial year and

Entity entitled to a fuel tax credit in respect of fuel acquired,
manufactured or imported for use at the start of the financial year
was the GST group and

Fuel was acquired, manufactured or imported for use by a person
who was a member of the GST group at the start of the financial
year
February 2013
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Impacts for GST groups – single member opt-in
• The representative member of the GST group will still claim the
fuel tax credits on behalf of the entire group, including the
individual member that has opted-in.
• The representative member will need to be able to ascertain
what fuel was acquired by the individual member who has opted
in, in order to apply the full fuel tax credit rate to that fuel.
• The remaining fuel within the GST group will be subject to the
rate reduced by the carbon charge as no other member has
opted in.
February 2013
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Eligible for fuel tax credit
• For GST joint venture (GST JV)
 Applicant (or DOIP) was the operator of a GST JV at the
start of the financial year and
 Entity entitled to a fuel tax credit in respect of fuel
acquired, manufactured or imported for use at the start of
the financial year was a participant in the GST JV or the
operator of the GST JV and
 Fuel was acquired, manufactured or imported for use by
a person who was a participant of the GST JV at the start
of the financial year
February 2013
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Threshold Test
• Existing liable entity (or likelihood of becoming a future
liable entity)
OR
• Eligible fuel(s) that if combusted would produce
greenhouse gas emissions in excess of 25,000 tonnes
CO2-e in an eligible financial year
• Evidence requirements
February 2013
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Existing liable entities
• Applicant can pass Threshold Test where they are:
 On the Liable Entity Public Information Database (LEPID)
in financial year before they apply or at the time they
apply OR
 Likely to be liable entities in 2013-14 OR
 Would be a liable entity except for the transfer of liability
through use of a liability transfer certificate
February 2013
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Fuel use over the threshold
• Eligible threshold fuel used for eligible purposes has
potential greenhouse gas emissions of 25,000 tonnes
CO2-e
 In previous 2 financial years prior to application for
participation in Opt-In Scheme OR
 Likely use in financial year for which application to
participate in Opt-In Scheme is intended
•
Eligible purposes or uses do NOT include on-road
transport, agriculture, fisheries or forestry
February 2013
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Calculating fuel use
• GST group
 All eligible uses of eligible fuel by all GST group members
• GST joint venture (GST JV)
 All eligible uses of eligible fuel by all GST JV participants
February 2013
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Consent
• Consent is effectively ‘consent and guarantee’.
• The consenter is both:

consenting to the application by the prospective DOIP, and

providing a guarantee of payment for the carbon charge liability
that might arise under the Opt-in Scheme.
• If the DOIP fails to acquit this liability, the parties that
gave consent to the application for declaration
become jointly and severally liable for any outstanding
charges.
February 2013
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Eligibility assessment
DOIP on own behalf:
Regulator checks:
Valid applicant
Legal Personality
Eligibility Test
+
Entitlement to fuel tax credit
Threshold Test
+
Emissions Threshold
• Not a foreign person
• Registered for fuel tax credit
• CPM liable entity, or
• Not an individual
• Acquired, manufactured or
imported eligible fuel in relevant
financial year
• Eligible fuel(s) that if
combusted would produce
greenhouse emissions in
excess of 25,000 tonnes
CO2 –e
ALL OTHER APPLICANTS:
Legal Personality + Entitlement to fuel tax credit + Emissions Threshold
February 2013
+ Consents
Page 26
Opt-in amount
• The opt-in amount is the total quantity of eligible fuel
manufactured, acquired or imported for use by all
members or participants at the start of the financial
year.
• Only a GST group can submit a request for variation
of the opt-in amount and only where this is caused by
the departure of a group member.
February 2013
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Liable entity status
• A DOIP becomes a liable entity under the Clean Energy
Act 2011 and will have a reporting obligation under the
NGER Act 2007
• There are registration requirements under the NGER Act
• The entity will be placed on the LEPID
• As a new liable entity, the DOIP will need to apply for
an Australian National Registry of Emissions Units
(ANREU) account
February 2013
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Administrative duties
• Advise the Clean Energy Regulator of changes to
membership
• Provide annual confirmation of status and eligibility to
participate in the Scheme (14 July)
• All record-keeping in respect of claims made under
the Opt-in Scheme; records are to be kept for 5 years
February 2013
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Reporting duties
• The DOIP is responsible for providing reports to the
Clean Energy Regulator in accordance with sections:
 22AA of the NGER Act – by 15 June, and
 22A of the NGER Act – by 31 October.
• Additional regulations for reporting will be available in
early 2013
February 2013
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Opting out
• A DOIP can notify the Clean Energy Regulator its
intention to opt out by 31 May each year.
• The Clean Energy Regulator can also opt out a DOIP
under certain circumstances including:
 No longer meeting eligibility or threshold tests
 Failure to report as required
February 2013
Page 31
Event
Scheme
Development &
Initial
Application
Late Jan 2013
Opt-in Scheme application form available
Early 2013
National Greenhouse and Energy Reporting (NGER) Regulations will be made to
establish reporting obligations of DOIPs (Designated Opt-In Persons)
02 April 2013
Deadline for DOIP applications for FY 2013-14 – midnight AEDT
01 July 2013
Opt-in Scheme commences
31 May 2014
Last day to opt-out of Scheme for 2014-15
15 June 2014
NGER reporting deadline – Interim Emissions Number and surrender of eligible
emissions units for interim liability
14 July 2014
Deadline for Annual Notification by DOIP of eligibility and ongoing participation in
Scheme for 2014-15
31 Oct 2014
NGER reporting deadline including Opt-in reporting obligations for FY 2013-14
01 Feb 2015
Deadline for surrender of eligible emissions units for final liability for FY 2013-14
First Acquittal
Period
Date
First Year of
Opt-In Scheme
Key Dates – First Year of Opt-In
February 2013
Page 32
Useful URLs and other information
For Information on
URL
Carbon Pricing Mechanism
www.cleanenergyregulator.gov.au Click the appropriate
tab or search for specific term
Fuel Tax Credits
www.ato.gov.au Search for “Fuel Tax Credits”
Call Centre
1 300 553 542
February 2013
Page 33
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