Enhanced Project By-law Scheme
Functional Unit Guide
1 July 2012
EPBS Functional Unit Guide 1 July 2012
Table of Contents
1
Introduction .................................................................................................................... 3
1.1
What is the Enhanced Project By-law Scheme? .................................................... 3
1.2
What is the role of the EPBS Functional Unit Guide?........................................... 3
1.3
When will EPBS applicants need to refer to this guide? ....................................... 3
1.4
When will the AusIndustry Delegate refer to this guide? ...................................... 3
1.5
Updates to this guide .............................................................................................. 3
2 General provisions applying to all EPBS Functional Units ........................................... 4
2.1
EPBS functional units and industry sectors ........................................................... 4
2.2
Operational equipment ........................................................................................... 4
2.3
Major upgrades ...................................................................................................... 4
2.4
Whole projects/complex plants .............................................................................. 4
2.5
Tariff considerations irrelevant .............................................................................. 4
2.6
Components and peripheral items .......................................................................... 5
3 Request for EPBS Functional Unit approval ................................................................. 6
4 AusIndustry Delegate’s Decision .................................................................................. 7
4.1
Initial consideration ............................................................................................... 7
4.2
Verification ............................................................................................................ 7
4.3
No precedents......................................................................................................... 7
5 Examples of EPBS Functional Units ............................................................................. 8
Part A Discrete EPBS Functional Units ............................................................................ 9
Part A.1
Primary factor – discrete function.................................................................. 9
Part A.2
Making an EPBS Functional Unit claim ...................................................... 10
Part A.2.1
Seeking discrete EPBS Functional Unit approval ............................... 10
Part A.2.2
Evidence to support a discrete EPBS Functional Unit claim ............... 10
Part B Aggregated EPBS Functional Units..................................................................... 11
Part B.1
Pre-requisites for considering an aggregated approach ............................... 11
Part B.2
Secondary factors supporting aggregation ................................................... 11
Part B.3
Making an EPBS Functional Unit claim ...................................................... 12
Part B.3.1
Seeking EPBS Functional Unit approval ............................................. 12
Part B.3.2
Evidence to establish an aggregated EPBS Functional Unit claim ...... 12
Part B.4
Exclusions from aggregated EPBS Functional Units ................................. 13
Attachment A – Examples of EPBS Functional Units......................................................... 14
A.1. Ore processing project ......................................................................................... 14
A.2. Water supply project ............................................................................................ 16
A.3. Manufacturing line project ................................................................................... 17
A.4. Manufacturing medium high density fibreboard project ..................................... 18
A.5. Manufacturing laminated veneer lumber project ................................................. 20
A.6. Power supply project............................................................................................ 21
A.7. Coal mining project.............................................................................................. 23
A.8. LNG processing project ....................................................................................... 24
Attachment B – Tariff Act and TCOs .................................................................................. 25
Attachment C – Links and Contacts .................................................................................... 27
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1 Introduction
1.1 What is the Enhanced Project By-law Scheme?
The Enhanced Project By-law Scheme (EPBS) provides tariff concessions for eligible
goods that are not produced in Australia, where those goods are procured for eligible
projects that develop and implement an approved Australian Industry Participation (AIP)
Plan. Further details on the EPBS can be found in the Enhanced Project By-law Scheme
Policy and Administrative Guidelines (the EPBS Guidelines).
In accordance with Section 2.3.2 of the EPBS Guidelines, eligible goods for EPBS
purposes include “EPBS Functional Units”.
1.2 What is the role of the EPBS Functional Unit Guide?
The purpose of the Enhanced Project By-law Scheme Functional Unit Guide (this Guide)
is to provide ongoing and up-to-date assistance on:

defining an “EPBS Functional Unit”;

the information applicants need to provide to support a claim that an item of capital
equipment is an EPBS Functional Unit; and

how the AusIndustry Delegate will deal with EPBS Functional Unit claims.
This guide is for additional guidance purposes only. It does not deal with all issues
associated with EPBS Functional Units (eg Australian Industry Participation requirements),
and must be read in conjunction with the EPBS Guidelines.
1.3 When will EPBS applicants need to refer to this guide?
Where the eligible goods for which an applicant is seeking EPBS approval include EPBS
Functional Units, the applicant must have regard to this Guide.
As noted in the EPBS Guidelines, all applicants are strongly encouraged to seek
AusIndustry Delegate approval of the scope of their proposed eligible goods at an early
stage of the project, prior to seeking evidence that the claimed units are not available from
Australian production. Where a project is valued at greater than $2 billion, early approval
by the AusIndustry Delegate is mandatory.
1.4 When will the AusIndustry Delegate refer to this guide?
The AusIndustry Delegate shall refer to this Guide when considering whether EPBS
Functional Units meet the requirements of the EPBS Guidelines. The final decision on the
eligibility of EPBS Functional Units is made by the AusIndustry Delegate. The
AusIndustry Delegate may issue additional guidance on eligibility on a case-by-case basis.
1.5 Updates to this guide
This Guide will be updated from time to time to reflect new technologies or to clarify
specific or emerging issues. When considering a request for eligible goods approval that
includes EPBS Functional Units, the AusIndustry Delegate would normally refer to the
Guide current on the date that the EPBS Project Acceptance application is approved.
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2 General provisions applying to all EPBS Functional
Units
2.1 EPBS functional units and industry sectors
For an item of capital equipment to be considered as an eligible EPBS Functional Unit, its
function must contribute to an activity appropriate to the eligible industries, as described in
Section 2.1.2 of the EPBS Guidelines. The particular functions performed by eligible
EPBS Functional Units are likely to vary between different industry sectors.
2.2 Operational equipment
As reflected by Section 2.3.1 of the EPBS Guidelines, eligible goods, including EPBS
Functional Units, must consist of equipment, machinery or component parts which are
procured for and will be integral to the project once it becomes operational, and that must
be in place or immediately available to the project at the time the project is commissioned.
Other equipment, for example tunnel borers or equipment for land preparation, may be
considered important or even essential to the project, but they would not be eligible for
EPBS concessions as they would not form part of the operational machinery or equipment
required to be in place at the time of commissioning.
2.3 Major upgrades
EPBS is targeted at eligible goods as procured for a project. Where only specific
components of an EPBS Functional Unit are being procured as part of a major upgrade
project (see Section 2.1.3 of the EPBS Guidelines), the AusIndustry Delegate will consider
the goods as procured, not the larger items of capital equipment of which they may be a
part. However, if a complete EPBS Functional Unit is procured for an upgrade project, it
would be assessed at the EPBS Functional Unit level.
2.4 Whole projects/complex plants
Whole projects or complex plant(s) encompassing several items of capital equipment which
together perform multiple functions would not be considered as an EPBS Functional Unit.
EPBS Functional Unit eligibility cannot be established on the basis that a project or
complex plant is delivered by a constructor under a single “turnkey” contract. This would
not be considered a relevant factor supporting treatment of a project or complex plant as a
discrete EPBS Functional Unit established under Part A of this Guide or as an aggregated
EPBS Functional Unit established under Part B of this Guide.
2.5 Tariff considerations irrelevant
Applicants should note that the existence or otherwise of a single tariff classification or a
Tariff Concession Order (TCO) that covers the scope of the goods to be imported cannot be
used as evidence that such goods meet EPBS Functional Unit requirements.
Attachment B to this Guide provides additional information on the interaction between
tariff classifications, TCOs and EPBS Functional Units.
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2.6 Components and peripheral items
To be considered as a component of an EPBS Functional Unit, machinery must be a part of
that unit and must contribute directly to the function to be performed by that unit.
Consistent with Section 2.3.3 of the EPBS Guidelines, materials and consumables are not
considered to be components of EPBS Functional Units and would not be eligible for entry
under the EPBS.
Items that the AusIndustry Delegate considers are peripheral to the process or function
performed by an EPBS Functional Unit (e.g. fittings, conveyors or pipelines connecting
EPBS Functional Units to each other or to other parts of the project, or auxiliary articles
such as support structures) will not be considered to be part of the EPBS Functional Unit.
Such items may be eligible under EPBS but will be assessed separately in accordance with
Section 2.3.2 of the EPBS Guidelines.
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3 Request for EPBS Functional Unit approval
Once an EPBS project has been approved, the applicant needs to seek EPBS Functional
Unit approval as an eligible good by writing to the AusIndustry Delegate. As noted in
Section 1.3 to this Guide, consistent with Section 6.5 of the EPBS Guidelines, all requests
for EPBS Functional Unit approval should be made as soon as possible after procurement
decisions are made.
A request for approval of an EPBS Functional Unit as an eligible good must be made in
accordance with Part A (Discrete EPBS Functional Units) or Part B of this Guide
(Aggregated EPBS Functional Units), taking into consideration the EPBS Guidelines and
the other provisions of this Guide.
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4 AusIndustry Delegate’s Decision
4.1 Initial consideration
On receipt of a request for approval of an EPBS Functional Unit as an eligible good, based
on all the available evidence, the AusIndustry Delegate will determine whether an item of
capital equipment claimed to be an EPBS Functional Unit meets the requirements of the
EPBS Guidelines and this Guide.
4.2 Verification
Before making a decision, the AusIndustry Delegate may seek the views of other parties,
including independent experts, relevant sources within DIISRTE, other government
agencies and industry associations.
4.3 No precedents
It is important to note that the treatment of specific goods as EPBS Functional Units might
differ substantially between projects. While previous decisions on EPBS Functional Units
made under the EPBS Guidelines, in conjunction with this Guide, may provide some
assistance, they will not necessarily be regarded as a precedent. The onus is on the
applicant to make a case based on the specific facts of its project and the goods to be
procured.
In particular, it should be noted that the AusIndustry Delegate may accept different EPBS
Functional Units for projects in the same sector depending upon the advice and evidence
available to the Delegate. Any changes in EPBS or Australia’s broader industry policy
framework may also affect decisions made by the AusIndustry Delegate in relation to the
scope of EPBS Functional Units.
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5 Examples of EPBS Functional Units
Examples of potential EPBS Functional Units (and their key components) for major
projects aimed at specific activities covered by the EPBS can be found in Attachment A to
this Guide. The examples are provided as a guide only. They illustrate the kinds of EPBS
Functional Units that the AusIndustry Delegate may, subject to the receipt of a valid
request, approve as eligible goods for projects aimed at specific eligible activities.
The examples set out in Attachment A may include EPBS Functional Units to be sourced
from Australian industry as well as those to be imported. Concessions may be provided for
imported EPBS Functional Units listed in the examples only where they are approved as
eligible goods and the AusIndustry Delegate is satisfied that all other EPBS requirements
have been met.
The examples set out in Attachment A include discrete EPBS Functional Units, as well as
aggregated EPBS Functional Units where more than one function is commonly carried out
concurrently within a single unit. Consistent with Part B to this Guide, provided a
compelling case can be made, the AusIndustry Delegate may accept aggregation of some of
the machinery listed in the examples. Where an applicant intends to present a case for
aggregation to the AusIndustry Delegate pursuant to Part B to this Guide, the examples
may act as a starting point for consideration.
Some examples in Attachment A include conveying or other material handling machinery
as a key component of an EPBS Functional Unit. In those examples, the conveying or
materials handling machinery would be limited to items identifiable as components of the
EPBS Functional Unit that contribute directly to the function of that unit. However,
consistent with Section 2.6 to this Guide, machinery for conveying materials to or from an
EPBS Functional Unit nominated in the examples, or any other peripheral items of
equipment, such as walkways and supporting structures, would not form part of an EPBS
Functional Unit, and must be considered separately for EPBS purposes.
For instance, in the debarking line in example A.5 in Attachment A, conveyors designed
to move logs through the debarking process are an essential part of that process and are
therefore considered to be key components of the debarking line. However, any conveyors
designed to bring logs to the debarking line, or to carry logs (directly or indirectly) to the
rotary lathe would be considered as auxiliary items, which would need to be assessed
separately for EPBS purposes. Similarly, any walkways surrounding or affixed to the
debarking line, or any structures required to support the debarking line, would be
considered as auxiliary items that would need to be assessed separately for EPBS purposes.
A specific EPBS project may involve the procurement of EPBS Functional Units that differ
from those in the examples. A specific EPBS project may also include additional EPBS
Functional Units, or may involve EPBS Functional Units with key components that differ
from those listed due to the engineering, design or technology selected.
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Part A Discrete EPBS Functional Units
Part A.1
Primary factor – discrete function
The primary factor when determining the scope of an EPBS Functional Unit is the discrete
function to be performed by the unit.
An EPBS Functional Unit must be an item of capital equipment that consists of:

a single piece of machinery,
 that performs a discrete function; or

multiple pieces of machinery,
 that are integrally connected; and
 that together perform a discrete function.
A discrete function is a single transformation process. Each of the following is an example
of a discrete function:
 extracting
 crushing
 compressing
 cutting
 welding
 moulding
 extruding
 heating
 cooling
 filtering
 blending.
An EPBS Functional Unit:


must have a clear start and end point; and
perform a discrete function that is:
 conducted alone; or
 as one element in a chain of operations.
An automated system that controls the processes performed by a number of EPBS
Functional Units would be considered as a separate EPBS Functional Unit in its own right
– provided the units controlled by the automated system undertake eligible activities within
the scope of the approved EPBS project.
At this primary consideration stage, an item of capital equipment that performs multiple
functions will not be considered to be a discrete EPBS Functional Unit, even if those
functions are combined to achieve a particular purpose. However, in limited
circumstances, secondary factors may support the consideration of an EPBS Functional
Unit in which some functions have been aggregated (see Part B to this Guide).
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Part A.2
Part A.2.1
Making an EPBS Functional Unit claim
Seeking discrete EPBS Functional Unit approval
When requesting discrete EPBS Functional Unit approval, the applicant must nominate the
discrete EPBS Functional Units for which it is seeking approval. The applicant must also
demonstrate to the AusIndustry Delegate’s satisfaction that the nominated discrete EPBS
Functional Units are eligible goods for EPBS purposes and also meet the requirements of
this Guide.
An applicant may support EPBS Functional Unit claims with:

advice from the Industry Capability Network (ICN) ; or

advice from an independent technical expert, such as a professional engineer, at arm's
length from the project and not usually employed by the applicant company,
provided that advice addresses all of the requirements of this Guide and, in particular, is
based on the primary factor for determining the scope of an EPBS Functional Unit set out
in Part A.1 and evidence set out in Part A.2.2 to this Guide.
Part A.2.2
Evidence to support a discrete EPBS Functional Unit
claim
In establishing a case that a particular item of capital equipment is a discrete EPBS
Functional Unit, the following evidence will need to be provided as part of the request for
discrete EPBS Functional Unit approval:
(a)
a clear description of the item of capital equipment claimed to be a discrete EPBS
Functional Unit, including:
(i) a list of the key components incorporated within the discrete EPBS Functional Unit;
and
(ii) a flow diagram (which may be a manufacturer’s standard diagram) showing the
structure of the claimed discrete EPBS Functional Unit and its key components; and
(b) a description of the discrete function performed by that item of capital equipment,
including how key components directly contribute to that function and otherwise
meet the requirements of this Guide.
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Part B Aggregated EPBS Functional Units
Part B.1
Pre-requisites for considering an aggregated approach
A project that may potentially include multiple EPBS Functional Units must first be
considered under Part A of this Guide, which focuses on the primary factor for
determining the scope of an EPBS Functional Unit, namely the discrete function of that
unit. Where the applicant can demonstrate that the requirements of Part A are not suited to
the particular circumstances of its project, or particular elements of its project, the applicant
may seek to rely on the secondary factors set out in Part B.2 below to make a case for a
more aggregated approach to the structure of EPBS Functional Units. A more aggregated
approach, if accepted by the AusIndustry Delegate, can allow a single item of capital
equipment that performs multiple interrelated functions to be considered as an EPBS
Functional Unit.
Subject to the consideration of the secondary factors in Part B.2 below, receipt of a request
for approval in accordance with Part B.3 and exclusions in Part B.4 below, the
AusIndustry Delegate may accept a more aggregated approach to an EPBS Functional Unit
– but only where the Delegate is satisfied that:

the claimed aggregated EPBS Functional Unit is a single item of capital equipment;
and

aggregation would result in the following outcomes:
 Australian producers would not be adversely affected; and
 EPBS and Australia’s broader industry policy objectives would be achieved.
Where the AusIndustry Delegate is not satisfied that an aggregated approach would satisfy
all of the above requirements, the scope of an EPBS Functional Unit will be determined
under Part A of this Guide.
As noted in Section 2.4 to this Guide, whole projects or complex plant(s), encompassing
several items of capital equipment which together perform multiple functions, would not be
considered as an EPBS Functional Unit. Whether or not such equipment is to be delivered
under a “turnkey” contract is not a relevant consideration.
Part B.2
Secondary factors supporting aggregation
The following secondary factors may be taken into consideration by the AusIndustry
Delegate when determining the structure of an aggregated EPBS Functional Unit:

how the capital equipment will be procured by the project constructors;

how the capital equipment is procured by other project constructors in the industry both
in Australia and overseas;

the continuity of the process performed by the equipment;

whether the proposed aggregated EPBS Functional Unit is recognised as a single item
of capital equipment according to current industry engineering and procurement
practice;

the likely impact of aggregation on Australian industry and the development of supply
chain capability;
EPBS Functional Unit Guide 1 July 2012
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
the size and type of the project (including whether it is an upgrade project) and of the
proposed aggregated EPBS Functional Unit.
Part B.3
Part B.3.1
Making an EPBS Functional Unit claim
Seeking EPBS Functional Unit approval
When requesting aggregated EPBS Functional Unit approval, the applicant must nominate
the aggregated EPBS Functional Units for which it is seeking approval. The applicant must
also demonstrate to the AusIndustry Delegate’s satisfaction that the nominated aggregated
EPBS Functional Units are eligible goods for EPBS purposes and also meet the
requirements of this Guide.
An applicant may support aggregated EPBS Functional Unit claims with:

advice from the Industry Capability Network (ICN); or

advice from an independent technical expert, such as a professional engineer, at arm's
length from the project and not usually employed by the applicant company,
provided that advice addresses all of the requirements of this Guide and, in particular, is
based on the pre-requisites for considering an aggregated approach set out in Part B.1, the
secondary factors set out in Part B.2, the evidence set out in Part B.3.2, and the potential
for exclusions set out in Part B.4 to this Guide.
Part B.3.2
Evidence to establish an aggregated EPBS Functional
Unit claim
In establishing a case that a single item of capital equipment that performs multiple
interrelated functions should be considered as an aggregated EPBS Functional Unit, the
following evidence will need to be provided:
(a)
evidence to support an aggregated approach on the basis of secondary factors; and
(b)
a clear description of the item of capital equipment claimed to be an aggregated
EPBS Functional Unit, including:
(i)
an outline of the machinery claimed to form the aggregated EPBS Functional
Unit, a list of the key components of that machinery, and a list of items that, in
accordance with Section 2.6 to this Guide, would be peripheral to each piece of
machinery proposed to be included; and
(ii)
a schematic showing the structure of the claimed aggregated EPBS Functional
Unit, the machinery claimed to form the aggregated EPBS Functional Unit, the
key components of that machinery, and peripheral items identified in (b)(i)
above; and
(c)
a description of the overall function to be performed by the proposed aggregated
EPBS Functional Unit and the function to be performed by each piece of machinery
proposed to be included; and
(d)
a description of the how each piece of machinery claimed to form the aggregated
EPBS Functional Unit, and its key components, contribute to and work together to
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perform the individual and overall functions of the proposed aggregated EPBS
Functional Unit; and
(e)
evidence of genuine consultation with Australian industry (including Australian
producers of pieces of machinery claimed to form the aggregated EPBS Functional
Unit, and/or representatives of those producers) which identifies:
(i) all of the potential adverse impacts of the proposed aggregation that were claimed
by Australian industry; and
(ii) the means by which the project will be managed to minimise the potential
adverse impacts claimed by Australian industry (including through the removal
of specific items from the nominated aggregated EPBS Functional Unit, see
Part B.4 below).
Part B.4
Exclusions from aggregated EPBS Functional Units
The AusIndustry Delegate may agree to some level of aggregation with regard to an EPBS
Functional Unit, but also may decide to exclude specific items from such aggregation. The
Delegate may choose this option if such an approach would ensure that a more limited
aggregation than that proposed by the applicant would remove any potential adverse
impacts on Australian producers, or would better achieve EPBS or Australia’s broader
industry policy objectives.
For example, machinery that is capable of being produced in Australia and may be
considered a discrete EPBS Functional Unit or other eligible good in its own right is likely
to be excluded from an aggregated EPBS Functional Unit.
An aggregated EPBS Functional Unit would also exclude machinery or equipment such as
conveyors, piping, walkways or supporting structures that, under to Section 2.6 to this
Guide, would normally be treated as peripheral to the machinery included in the
aggregated EPBS Functional Unit.
Items excluded from an aggregated EPBS Functional Unit would be assessed separately for
EPBS purposes.
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Attachment A – Examples of EPBS Functional Units
Set out below are examples of EPBS Functional Units (second column) and their key
components (last column) for major projects aimed at specific eligible activities. Section 5
of this Guide provides guidance on the nature of the examples provided, and how they may
be considered by the AusIndustry Delegate.
A.1.
Ore processing project
This example involves a Greenfield project primarily focussed on the installation of ore
processing equipment. The EPBS Functional Units and their components for such a project
could include the following:
No.
EPBS Functional
Units
Function they undertake
Key Components
1.
Ore crushing plant
Crushes ore from stockpile
Primary Crusher
Secondary crusher
Gyratory crushers
Cone crushers
Conveyors
Hoppers
Feeders
Screens
Pumps
2.
Ore stacker/
reclaimer
Stockpiles ore for reclamation
and feeding into crushing plant
Bucket Wheel
Boom
Counterweight
Conveyor belt
Drive System
Hydraulic system
Apron feeders
Conveyors
Stackers
Reclaimers
3.
Grinding plant
Reduces ore size to fine
particles ready for processing
4.
Rougher scavenger
flotation plant
Separates ore to recover
minerals
High pressure grinding rollers
Ball mills
SAG mills
Stilling boxes
Tanks
Flotation cells
5.
Cleaner and
concentrate
filtration plant
Concurrently cleans and
concentrates ore
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Cleaners
Thickeners
Blowers
Flocculant unit
Deaerators
Pumps
No.
6.
EPBS Functional
Units
Tailings thickening
and stacking plant
EPBS Functional Unit Guide 1 July 2012
Function they undertake
Concurrently dewaters and
piles tailings waste for dry
stacking
15
Key Components
Belt filters
Tanks
Mixers
Thickeners
Stackers
A.2.
Water supply project
This example involves a Greenfield project primarily focussed on the installation of
seawater desalination equipment. The EPBS Functional Units and their components for
such a project could include the following:
No.
EPBS Functional
Units
Function they undertake
1.
Seawater extraction
and intake system
Provides seawater to the plant
2.
Seawater pretreatment plant
Filters to remove solids from
seawater
3
Flocculant dosing
plant
Collects contaminants for
removal
4.
Reverse osmosis
plant
Desalinates treated
seawater/waste water
5.
Potabilisation plant
Stabilises/conditions pure water
through the addition of
chemicals
6.
Wastewater
treatment plant
Concurrently collects, treats
and discharges wastewater
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Key Components
Intake tower
Intake and outfall piping
Intake basin
On-shore screening system
Intake pump station
Tunnel Liners
Pressure filters
Cartridge filters
Pumps
Chemical dosing system
Control system
Hyperboloid mixers
Airblowers
CO2 production
Turbo circulator
Conveyors
Centrifuges
Reverse osmosis racks
Reverse osmosis membranes
Reverse osmosis pressure
vessels
Pumps
Piping
Cleaning and flushing system
Control systems
Permeate tank
Chemical dosing system
Lime dosing system
CO2 storage and dosing system
Tanks
Piping
Control systems
Outfall piping
Tanks
Discharge piping and diffuser
Thickener
Centrifuge system
A.3.
Manufacturing line project
This example involves a Greenfield project primarily focussed on the installation of
manufacturing equipment. The EPBS Functional Units and their components for such a
project could include the following:
No
.
EPBS Functional
Units
Function they undertake
Key Components
1.
Extrusion line
Extrudes product
Extrusion machines
Parts docking station
2.
Moulding line
Moulds parts from plastic or
metal raw materials
Moulding presses
Raw material hoppers
Trimming machine/presses
3.
Post-forming
treatment plant
Specialized heat or pressure
treats parts
Autoclaves
Ovens
Quench tanks
Process gas storage vessels
4.
Finishing/corrosion
protection
Paints/finishes formed
products
Spray paint booths
Pumps
Ventilation equipment
Paint recovery system
5.
Labelling
Labels finished product
Labelling machines
6.
Packaging
Packs finished product
Cartoning machines
Palletisers
Wrapping machines
7.
Quality control
station
Inspects and tests finished
product
Testing equipment
Measuring equipment
Identification system
8.
Water treatment
Extracts contaminants from
Water pumps
water supplied to
Filters
manufacturing equipment or
waste water generated by such
equipment
9.
Air purification
Extracts contaminants from
air supply to manufacturing
equipment or waste air
generated by such equipment
Extraction fans
Circulation fans
Filters
10.
Control systems
Automatically controls the
manufacturing equipment
Distributed control system
(DCS)
Local control desks
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A.4.
Manufacturing medium high density fibreboard project
This example involves a Greenfield project primarily focussed on the installation of
equipment for manufacturing medium density fibreboard. The EPBS Functional Units and
their components for such a project could include the following:
No.
EPBS Functional
Units
Function they undertake
Key Components
1.
Debarking line
Removes bark
Conveyor
Debarker
Bark hopper
2.
Chipping plant
Chips logs
3.
Chip washing
system
Cleans chips of waste
contamination
4.
Pulping plant
Reduces the chips to fibres
5.
Fibre drying system
Dries fibres
Chipper
Conveyors
Surge bins
Screens
Chip Pump comprising:
● Transport pump; and
● motor
Water pre-treatment
equipment
Chip washer hydro cyclones
Electric control system
Piping
Washing bowls
Pluggers (screw compactors)
Plug heater
Defibrator (refiner)
Blowers
Crushers
Mixers
Dust combustion equipment
Drier components
6.
Fibre weighing
system
Weighs fibres
7.
Blow line
Dries/mixes fibres (with
additives) to a constant
density
8.
Matt former
9.
Pressing
EPBS Functional Unit Guide 1 July 2012
Fibre weighing equipment
Discharge conveyors
Conveyor belting
Vessel
Blowers
Wax Injection equipment
Forms a mat of consistent
Pendistor
density and thickness
Matt belt
Matt saw
Compacts the matt to a board Multi hot press
Material handling machinery
18
10.
Finishing
Finishes pressed board for
market
11.
Control system
Controls the manufacturing
equipment
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Conveyors
Cooler
Laminating machine
Bundling/packaging
machinery
Distributed control system
(DCS)
Local control desks
A.5.
Manufacturing laminated veneer lumber project
This example involves a Greenfield project primarily focussed on the installation of
equipment for manufacturing laminated veneer lumber. The EPBS Functional Units and
their components for such a project could include the following:
No.
EPBS Functional
Units
Function they undertake
Key Components
1.
Debarking line
Removes bark
Conveyor
Debarker
Bark hopper
2.
Rotary lathe
Produces plies (or veneers)
Rotary lathe
3
Grader and stacker
Concurrently grades and
stacks plies/veneers
Grader and stacker
Conveyor
4
Green chipping line
Concurrently chips and
Chipping wheel
screens waste wood and bark Screens
Conveyor
5.
Gas drier
Removes moisture from
green timber
Multi level gas drier
Conveyor belt
6.
Multi-layer
lamination
Laminates veneers
Continuous assembly line
Curtain glue applicator
7.
Laminated Veneer
Lumber (LVL)
laminated pressing
line
Presses veneers
Continuous lay up area
Cold press
Saw
Conveyor
Multiple opening hot oil press
8.
LVL curing and
cooling system
Cools air temperature for
processing operations
Continuous lay up area
Conveyor
9.
LVL cutter
Concurrently cuts product to
length and stacks for
customer orders
Saw
Stacking line
Metal strapping
EPBS Functional Unit Guide 1 July 2012
20
A.6.
Power supply project
This example involves a Greenfield project primarily focussed on installation of a power
supply equipment. The EPBS Functional Units and their components for such a project
could include the following:
No.
1
EPBS Functional
Units
Gas turbine
generator
Function they undertake
Key Components
Heats/compresses air to force
it past turbine fans in order to
turn a shaft connected to an
electrical generator
Supplies natural gas to the
generator turbine
Compressor
Combustor
Turbine
2
Natural gas system
3.
Gas Filter
Coalescer
Fuel Oil System
Removes fluids from natural
gas
Supplies fuel oil to the
generator turbine
5.
Cooling Water
System
Regulates temperature of
generator turbine and
exhaust
6.
Air System
Supplies air to generator
turbine
7.
Oily Water System
Waste water control
8.
Potable Water
System
Removes impurities from
water
9.
Demineralised
Water System
Removes impurities from
water
4.
EPBS Functional Unit Guide 1 July 2012
21
Twin screw oil flooded gas
Compressed skid
Gas fin fan cooler
Gas inlet scrubber
Control panel
Vibration monitoring
Filed instrumentation
Programmable Logic
Controller
Pressure vessel
Ventilation and exhaust fan
blower.
Gas fuel coalescer skid
Heater.
Low pressure fuel oil pumps
Duplex filter
Heater skids
Control panel
Field instrumentation
Cooling sea water pumps
Sea water pumps
Heat exchanger shell and tube
Field instrumentation
Air compressor skid Air dryer
Air receiver
Electric and control panel
Vibration monitoring system
Filed instrumentation
Oily water pumps
Control panel
Field instrumentation
Water pumps
Control panel
Field instrumentation
Water forwarding pumps
Duplex filter
Control panel
Field instrumentation
No.
10.
EPBS Functional
Units
Hypochlorite
Dosing System
Function they undertake
Key Components
Treats impurities in the water Hypochlorite forwarding
pumps
Hypochlorite injection system
Electric and control panel
Field instrumentation
NB: Power transmissions systems comprising lines, towers, transformers, etc, will not be
considered as EPBS Functional Units – consistent with Section 2.3.2 of the EPBS Guidelines,
these items will be treated separately – for example, as equipment packages, individual EPBS
Functional Units or conveying equipment, as the case may be.
EPBS Functional Unit Guide 1 July 2012
22
A.7.
Coal mining project
This example involves a Greenfield coal mining project primarily focussed on the
procurement of equipment to mine coal. The EPBS Functional Units and their components
for such a project could include the following:
No.
EPBS Functional
Units
Longwall mining
system
Function they undertake
Key Components
Extracts coal ore from the
underground ore body
2
Flexible Conveyor
Train
3
Sizers
4
Cyclones
Moves mined coal ore from
the face to the processing
plant
Reduces coal to nominated
size
Removes small particulate
matter
Roof supports
Armoured face conveyor
Beam stage loader and crusher
Boot end
Maingate/tailgate drives
Shearer
Hydraulic power pack
Monorail
Conveyors
Conveyor belt
5.
Vibrating Feeders
and Screens
Flotation cells
Separates coal by size
7.
Magnetic
separators
Separates ferrous material
from the coal ore
8.
Tailings thickener
Condenses waste material
9.
Continuous mining Extracts coal from the seam
system
Feeder pump
Cyclone vessel
Overflow chamber
Vibrating feeders Screens
Conveyor belt
Agitation cells
Flotation columns
Air injectors
Mixers
Skimmers
Waste remover
Coils
Magnets
Belts
Conveyors
Filters
Centrifuges
Thickeners
Continuous miner
Conveyor
10.
Sample testing
station
Sampler
Conveyor
1
6.
EPBS Functional Unit Guide 1 July 2012
Cleans coal ore
Tests coal properties
23
Crusher rolls
A.8.
LNG processing project
This example involves Liquefied Natural Gas (LNG) processing projects primarily
focussed on the installation of equipment for transforming gas into a form suitable for
subsequent transport or supply. The EPBS Functional Units and their components for such
a project could include the following:
No.
EPBS Functional
Units
Acid gas removal
unit
Function they
undertake
Feed gas is treated by
removing CO2 (Carbon
Dioxide - Acid Gas)
2.
Dehydration unit
3.
Mercury removal
unit
4.
Liquefaction
module
Dries the gas leaving the
acid gas removal section
using molecular sieve
driers
Removes mercury before
sending the gas to the
liquefaction units
Liquefies gas
5.
Nitrogen rejection
unit
6.
Refrigeration
module
7.
Sulphur Recovery
unit
1.
EPBS Functional Unit Guide 1 July 2012
Flashes the nitrogen from
the LNG product and
delivers the nitrogen rich
gas to the fuel gas system
Refrigerates gas
Key Components
Coalescer Filter
Absorber
Amine Regenerator
Heat Exchangers
Pumps
Filters and Separators
Dehydration:
Glycol unit
Molecular sieve
Pressure Swing Adsorption unit
Activated carbon bed
Main Cryogenic Heat Exchanger
(MCHE)
Refrigerators
Columns
Nitrogen removal column
Flash vapour exchanger
Refrigeration modules depends on
which LNG process is selected,
and could include:
 propane, accumulator
 mixed refrigerant kettles
 refrigerant compressors
Removes sulphur (mainly Boiler
under H2S form)
Condensor
contained in the acid gas Claus Reactors
feed from the acid gas
removal unit and
converts it into liquid
sulphur
24
Attachment B – Tariff Act and TCOs
B.1
Comparison between:

an EPBS Functional Unit; and

goods that meet Tariff provisions for classifying goods
imported together to perform a particular function
An EPBS Functional Unit may be different and unrelated to the sort of equipment that
might meet Note 4 to Section XVI of Schedule 3 to the Customs Tariff Act 1995 (the
Tariff). This Note directs how certain machines and components intended to work together
to perform a clearly defined function are to be classified for tariff purposes. That is:
“Where a machine (including a combination of machines) consists of individual
components (whether separate or interconnected by piping, by transmission devices,
by electric cables or by other devices) intended to contribute together to a clearly
defined function covered by one of the headings in Chapter 84 or Chapter 85, then
the whole falls to be classified in the heading appropriate to that function.”
Note 3 to Chapter 90 of Schedule 3 to the Tariff extends these provisions to goods falling
within that chapter.
The reason EPBS Functional Units may be different and unrelated to the sort of equipment
that meets the above Tariff provisions is that the purposes of EPBS Functional Units and
the relevant Tariff provisions are fundamentally different.
The Tariff provisions mentioned above facilitate customs clearance by providing a practical
means for classifying separate machines that are imported together in a single shipment and
that together perform a clearly defined function covered by a single tariff classification
falling within specific Tariff chapters. The purpose of these Tariff provisions is not to
classify equipment that must be imported in multiple shipments to a single tariff
classification. Where equipment is imported in multiple shipments, each shipment must be
classified and assessed for duty separately.
The purpose of EPBS is to provide duty-free entry to distinct items of capital equipment as
they are procured for the project rather than as they are shipped. This means that an
approved EPBS Functional Unit may be imported in component form across multiple
shipments, with duty-free treatment applying across all shipments, no matter where the
equipment or its separately shipped components may be classified in the Tariff.
Given the fundamentally different purposes of the EPBS Functional Unit provisions and
the abovementioned Tariff provisions, there will be cases where equipment accepted as an
EPBS Functional Unit would not meet the terms of the above mentioned Tariff provisions,
and cases where equipment that meets the terms of the relevant Tariff provisions would not
be accepted as an EPBS Functional Unit. The diagram below demonstrates the
interrelationship between EPBS Functional Units and equipment that meets the relevant
Tariff provisions:
EPBS Functional Unit Guide 1 July 2012
25
B.2
EPBS Functional Units and TCOs
Once an EPBS Functional Unit has been approved by the AusIndustry Delegate, an
applicant must then establish (among other things) that equivalent goods are not produced
in Australia or that the EPBS Functional Unit is more technologically advanced, more
productive or more efficient than equivalent goods produced in Australia.
One of the means by which an applicant may demonstrate Australian non-availability is
through a current TCO (see Section 5 of the EPBS Guidelines). However, TCOs can be
granted only for goods that fall within a single classification.
Therefore, any applicant who intends to rely on a TCO as evidence of non-availability must
ensure that its EPBS Functional Unit is acceptable to AusIndustry for EPBS purposes, and
also satisfies the Tariff provisions that allow it to fall within a single tariff classification.
An applicant in this situation is strongly encouraged to seek advice from both AusIndustry
and the Australian Customs and Border Protection Service as early as possible to ensure
that a claimed EPBS Functional Unit meets both EPBS and Tariff requirements.
On occasions, an EPBS applicant will be advised that an EPBS Functional Unit acceptable
to the AusIndustry Delegate for EPBS purposes is not acceptable to the Australian Customs
and Border Protection Service for TCO purposes because it does not fall to a single tariff
classification. In such a case, the applicant will need to revise the structure of its EPBS
Functional Unit and seek further advice from both AusIndustry and Customs and Border
Protection. Alternatively, the applicant may decide to rely upon evidence of nonavailability other than a TCO.
Due to the requirement for TCOs to fall within a single tariff classification, the structure of
EPBS Functional Units for a project that intends to establish Australian non-availability
through TCOs may differ from the structure of EPBS Functional Units for a similar project
that intends to establish Australian non-availability through other means.
EPBS Functional Unit Guide 1 July 2012
26
Attachment C – Links and Contacts
Contact areas
Enhanced Project By-law Scheme Policy and
Administrative Guidelines
Australian Industry Participation
Project Acceptance application form
Implementation Report application form
Industry Capability Network
Enterprise Connect
Supplier Advocates
Department of Industry, Innovation, Science,
Research and Tertiary Education
Australia and New Zealand Standard Industry
Classification
Websites
www.ausindustry.gov.au
Australian Customs and Border Protection
Service
www.customs.gov.au
EPBS Functional Unit Guide 1 July 2012
27
www.aip.gov.au
www.ausindustry.gov.au
www.ausindustry.gov.au
www.icn.org.au
www.enterpriseconnect.gov.au
www.aip.gov.au
www.innovation.gov.au
www.abs.gov.au