August 2012
THE EQUIVALENT CARBON PRICE ON
SYNTHETIC GREENHOUSE GASES IN THE
FIRE PROTECTION INDUSTRY
Under the Australian Government’s Clean Energy Future Plan introduced on 1 July 2012, new
controls apply to imports of some synthetic greenhouse gas fire protection extinguishing
agents. The arrangements include a levy incorporating an equivalent carbon price.
Synthetic greenhouse gases are listed under
the Kyoto Protocol, and most have a high
global warming potential. For example,
FM200 (hydrofluorocarbon 227ea or HFC227ea), a common fire extinguishing agent,
has a global warming potential 2900 times
greater than carbon dioxide.
Since 1 July 2012, a carbon charge based on
an equivalent carbon price has been applied
to all products containing any of the regulated
synthetic greenhouse gases, whether they are
imported as bulk gases such as bulk
extinguishing agents, or contained in products
or equipment, such as systems installed in
specialised equipment or vehicles. The price
is calculated at the point of import of the gas
or equipment, or manufacture of the gas
within Australia, and is calculated by
multiplying the global warming potential of the
imported gases by the quantity imported and
by the equivalent carbon price current at the
time of import.
Licensees may claim a refund of the carbon
charge component if they export the synthetic
greenhouse gas or equipment within
12 months of its import, or if they on-sell to a
business which exports the gas or equipment
within 12 months of its import.
Examples of the global warming potential of
synthetic greenhouse gas extinguishing
agents are given in the table below.
Product
Synthetic
Greenhouse
Gas
Global
Warming
Potential
FE-13TM
HFC-23
11,700
FE-25TM
HFC-125
2,800
Halotron® II
HFC-134a
1,300
FM-200®
HFC-227ea
2,900
FE-36TM
HFC-236fa
6,300
SF6
Sulfur
Hexafluoride
23,900
Note: Extinguishing agents such as carbon dioxide, NovecTM
1230, Inergen®, Argonite® and water mist systems are NOT
affected by the equivalent carbon price. The global warming
potential is based on the Intergovernmental Panel on Climate
Change, Second Assessment Report, 1995.
Who pays the equivalent
carbon price on synthetic
greenhouse gases?
Only persons who import regulated synthetic
greenhouse gases, in bulk or in equipment
(such as systems installed in specialised
equipment or vehicles), or manufacture
synthetic greenhouse gases need a licence
(either a Controlled Substances Licence or an
Ozone Depleting Substances/Synthetic
Greenhouse Gas (ODS/SGG) Equipment
Licence) and are required to pay a levy.
These importers must be licensed under the
Ozone Protection and Synthetic Greenhouse
Gas Management Act 1989.
You may also be eligible, under certain
conditions, for a partial fee waiver.
Applications may be made on-line at
www.environment.gov.au/equivalent
carbonprice
Note: Importers of either bulk synthetic
greenhouse gases or equipment containing
synthetic greenhouse gases are required to:
 Report all imports on a quarterly basis,
within 15 days of the end of the quarter
 Pay the carbon charge component of the
levy based on the equivalent carbon price,
and the existing cost recovery levy, within
60 days after the end of the quarter to
which the import relates.
Low volume importers
You may also be eligible, under certain
conditions, for a partial fee waiver. Separate
guidance is available at the department’s
website.
Can the equivalent carbon
price be passed on?
Each business will need to make a
commercial decision about whether some, or
all, of the carbon charge component of the
levy based on the equivalent carbon price is
passed on to consumers or other businesses
dealing with products or services containing
these gases. The Australian Competition and
Consumer Commission has provided a guide
for businesses on determining carbon price
claims
www.accc.gov.au/content/index.phtml/item
Id/1017091
How can I estimate the
equivalent carbon price?
An online calculator is available at
www.environment.gov.au/equivalent
carbonprice to help calculate the levy on
synthetic greenhouse gases, including blends
of these gases.
What is my business required
to do?
Synthetic greenhouse gases may still be used
as fire extinguishing agents. But as the value
of these gases will increase with the
introduction of a carbon charge based on an
equivalent carbon price, all businesses,
including fire protection businesses, will need
to consider how these gases are used, stored,
supplied, serviced, disposed of and otherwise
managed. For instance, avoiding accidental
discharges of extinguishing agent in order to
save on replacing the extinguishing agent.
For example, 1 kg of FM200 will have an
equivalent carbon price of $66.70. An
accidental release of 25 kg would therefore
cost over $1,500 to replace.
The carbon charge based on the equivalent
carbon price also provides an incentive to
recycle the fire extinguishing agent or switch
to alternative technology that uses agents
which have a lower, or no, global warming
potential.
Fire protection businesses and technicians
must continue to comply with all legislative
and regulatory requirements, including fire
protection handling licence conditions,
relevant codes of practice, work health and
safety legislation and with competition and
consumer legislation.
A compliance and audit team will oversee
compliance with the Ozone Protection and
Synthetic Greenhouse Gas Management Act
1989.
What will the new
arrangements mean for
owners of fire protection
systems containing synthetic
greenhouse gas extinguishing
agents?
Accidental discharges can happen when a fire
panel is tested. Building owners and others
who have fire protection systems containing
synthetic greenhouse gas extinguishing
agents should have their systems properly
installed and maintained by technicians with
an extinguishing agent handling licence.
Is the Goods and Services Tax
(GST) applied to the
equivalent carbon price?
Information on the Goods and Services Tax
(GST) can be found under the Frequently
Asked Questions available at
www.environment.gov.au/equivalent
carbonprice
More information
For more information about the Australian
Government’s administration of synthetic
greenhouse gases, including the list of gases
affected and how to calculate the equivalent
carbon price, go to
www.environment.gov.au/
equivalentcarbonprice
For details about the Clean Energy Future
package, go to the website:
www.cleanenergyfuture.gov.au/cleanenergy-future/our-plan