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Guidelines for completing a 2016 Application for an exemption certificate
Contents
Overview............................................................................................................................................................2
Exemption certificate application process..........................................................................................................2
General requirements....................................................................................................................................3
Completing the exemption certificate application.............................................................................................3
Part A: Prescribed person...............................................................................................................................3
Part B: Applicant details.................................................................................................................................5
Part C: Liable entity........................................................................................................................................5
Part D: Emissions-intensive trade-exposed activity........................................................................................6
Part E: Site details...........................................................................................................................................7
Part F: Quantity of relevant product..............................................................................................................8
Part G: Exemption calculation......................................................................................................................13
Supplementary information.............................................................................................................................14
Audit report..................................................................................................................................................14
Exemption certificate application processing times.....................................................................................15
Amending an exemption certificate.............................................................................................................15
Transfer of exemption certificate to liable entity.........................................................................................16
How an exemption certificate reduces a liable entity’s LRET and SRES liability...........................................17
Auditing and compliance..............................................................................................................................18
Protected information..............................................................................................................................18
Publication of exemption certificate information.....................................................................................19
Contact us........................................................................................................................................................19
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 1
Overview The Renewable Energy (Electricity) Act 2000 (the Act) and the Renewable Energy (Electricity) Regulations 2001 (the Regulations) include provisions to provide exemption from Renewable Energy Target (RET) liability for electricity used in defined emissions-intensive trade-exposed (EITE) activities. To obtain exemption, prescribed persons may apply to the Clean Energy Regulator for an exemption certificate.
Note: These guidelines are non-binding and of a general nature only. The Clean Energy Regulator suggests you seek your own legal advice if necessary in relation to your application.
Exemption certificate application process 1. Download the 2016 Application for exemption certificate1 form from the Clean Energy Regulator
website. Complete the application form. The Industrial and Transport Section can assist, or you may seek your own advice.
2. Send the application form to the Clean Energy Regulator with supporting documentation.
3. Lodge the application:
By post:
Clean Energy RegulatorIndustrial and Transport sectionGPO Box 621Canberra ACT 2601
By fax:
(02) 6159 3886
Please note - if the application is sent by fax, the signed original application must also be sent by post to the Clean Energy Regulator.
As security cannot be guaranteed, fax applications are faxed at your own risk. It is recommended that you post your application rather than send by fax.
Applications for the 2016 year (1 January to 31 December 2016) must be made on or before 30 March 2016.
Note: No extension of time can be given to lodge an exemption certificate application after the due date.
General requirements
Read the Regulations.
Post or fax your application on the approved form in hard copy. Your response can be either typed or legibly hand written.
1 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 2
Complete all applicable parts of the application form. If insufficient space is available to complete your response, please provide the response as an attachment.
Reference and label attachments in a logical manner. Lengthy or sizeable attachments may be provided in electronic format. Ensure any attachments and copies of original documents are legible.
Make sure the original copy of the application form is posted or faxed as per the lodgement details.
Keep a copy of the application that is submitted for your records.
Don’t alter the wording or the references in the application form in any way.
Don’t use correction fluid or covering stickers.
Don’t bind your application.
Don’t submit your application form by email, flash drive, or on a computer disk.
The Clean Energy Regulator recommends that potential applicants make themselves familiar with the Act2 and the Regulations3 before to applying for an exemption certificate.
The Clean Energy Regulator is responsible for implementing the legislation governing EITE exemption certificates. The Department of the Environment is responsible for developing the policy and legislation. The Department of the Environment can be contacted by phone (1800 803 772) or through their online enquiries portal through the ‘contact us’ link on their home page4.
Completing the exemption certificate applicationThe below information provides guidance for completing each part of the exemption certificate application.
Part A: Prescribed person
An application for an exemption certificate must be made by a prescribed person, who will receive the exemption certificate (this will generally be the entity carrying on the EITE activity).
Regulations 22G - 22M define categories of prescribed person who are entitled to apply for an exemption certificate. You must fit into one of these categories in order to apply.
Note: You are not a prescribed person under regulations 22G, 22H, 22I, 22J or 22K if another valid application has already been received for the 2016 year in relation to the EITE activity and site.
Scenario 1: An entity has a contract with the liable entity
During the 2016 year you (the prescribed person) have a contract with the liable entity (e.g. your electricity retailer) for electricity supply to the site at which the EITE activity is carried out. This may be:
an existing contract—the prescribed person is the person with contract for supply of electricity to site (regulation 22G), or
a new contract—the prescribed person is the person with a new contract for supply of electricity (regulation 22J).
2 http://www.comlaw.gov.au/Series/C2004A00767 3 http://www.comlaw.gov.au/Series/F2001B00053 4 http://www.environment.gov.au/about-us/contact-us
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 3
For example: You have an existing contract to purchase electricity from an electricity retailer for use in the EITE activity of smelting zinc from 2016 to 2020.
Scenario 2: Liable entity with operational control
During the 2016 year you have operational control of the principal facility at the site of the EITE activity and are also a liable entity for a substantial portion of the electricity consumed at the site.
Operational control is defined with reference to the National Greenhouse and Energy Reporting Act 2007 (NGER Act) and generally means you have the most authority over operating, health and safety and/or environmental policies for the facility. For more information about operational control review the NGER legislation or guidance on the Clean Energy Regulator website5.
You are generally a liable entity if you make wholesale acquisitions of electricity. For more information about liable entities6 see the Clean Energy Regulator website.
For an EITE activity currently carried out at a site:
The prescribed person is the liable entity with operational control (regulation 22H).
During the six months prior to lodgement of the application, you must be the liable entity for the majority, or over 30% of the liable electricity consumed at the site.
For an EITE activity which will be carried on at a site later in the 2016 year:
The prescribed person is the liable entity for the future EITE activity (regulation 22I).
You must be the liable entity for over 30% of the electricity consumed at the site during 2016.
Describe the basis upon how you meet the criteria of a liable entity with operational control, including, in particular, supporting evidence of operational control and that you meet the criteria of being a liable entity.
For example: You conduct the EITE activity of smelting zinc, have operational control of the principal facility at the site, and you also purchase wholesale electricity for use in the EITE activity.
Scenario 3: Nominated person
If you are a controlling person in relation to the principal facility at the site at which the EITE activity is carried out, a prescribed person can nominate you to apply for the exemption certificate. In this case:
The prescribed person is the nominated person (regulation 22K).
A controlling person is defined in sub-regulation 22K(3) and generally means a person with operational or financial control of the facility.
Written notice of the nomination must be given to the Clean Energy Regulator before your application is lodged.
5 http://www.cleanenergyregulator.gov.au/NGER/About-the-National-Greenhouse-and-Energy-Reporting-scheme6 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Renewable-Energy-Target-liable- entities
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 4
For example: You operate a zinc smelter, but an intermediary person has a contract with the liable entity for the supply of electricity to the zinc smelter. The intermediary (as a prescribed person) nominates you to apply for the exemption certificate.
Part B: Applicant details
Complete the details of the applicant (the applicant must be the legal entity that is the prescribed person as described in Part A).
In Part B you must provide the company name (the legal entity name as registered on the Australian Business Register) and trading name/s if applicable (to enable the Clean Energy Regulator to accurately identify the company in different circumstances).
Nominate the primary contact person. This person will be the main point of contact for the Clean Energy Regulator when seeking additional information or clarification regarding the application. This should be the person who is most knowledgeable about the application and relevant legislation.
A secondary contact person must also be nominated. This person may be contacted if the primary contact is unavailable. This person should also have knowledge of the application and relevant legislation.
Part C: Liable entity
Complete the details of the liable entity for the electricity consumed at the site (generally this will be your electricity retailer) and please provide any required supporting documentation.
You may need to contact the liable entity for assistance in completing these questions.
If on 1 January 2016 there were multiple liable entities for the electricity consumed at the site at the start of the year you will need to provide details of:
any other liable entities and indicate whether you are intending to apply for another exemption certificate in respect of a concurrent liable entity (under regulation 22M(b)(i)), or under regulation 22M(b)(ii)).
a second liable entity commenced to supply electricity to the site during the year (under regulation 22L.
If so, once you have been issued with the first exemption certificate, you can then apply for an exemption certificate in respect of another liable entity using the '2016 Application for Exemption Certificate - multiple liable entities7)' form available on the Clean Energy Regulator website. Applications must be made on or before 30 June 2016 (for applications in regards to paragraph 22M(b)(i) of the Regulations), or 31 December 2016 (in regards to paragraph 22M(b)(ii) of the Regulations).
If during the 2016 year the liable entity for the electricity consumed at the site changes, once you have been issued with the first issued exemption certificate, you can then apply for an exemption certificate in respect of the second liable entity using the '2016 Application for Exemption Certificate - change of liable entity8)' form available on the Clean Energy Regulator website. Applications must be made on or before 31 December 2016 (for applications in regards to regulation 22L).
7 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry 8 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 5
Part D: Emissions-intensive trade-exposed activity
It is the responsibility of the prescribed person to identify whether an EITE activity is carried out at a site. Refer to the activity definitions in Schedule 6 of the Regulations to determine whether your activity is an eligible EITE activity.
For each EITE activity, Schedule 6 also contains:
the classification of activity in terms of whether it is highly or moderately emissions-intensive, and
the electricity baseline for activity—this is the amount of electricity used in the activity per unit of relevant product.
Instead of directly measuring electricity consumed in the EITE activity, measure relevant product quantity and use the electricity baseline to calculate electricity consumption to determine the level of exemption.
Example: Production of carbon black
The electricity baseline for this EITE activity is 0.514MWh per tonne.
If 100,000 tonnes of carbon black is produced at a site in a year, the calculated electricity consumption in the EITE activity is:
[0.514MWh/tonne x 100,000 tonnes] = 51,400MWh
An application can only relate to one EITE activity. If multiple EITE activities are carried on at the same site:
nominate which EITE activity this application relates to, and
lodge a separate application for each other EITE activity if desired.
Explain how the EITE activity will be carried on at the site in 2016, by briefly describing how the specific processes conducted at the site constitute the activity definition in Schedule 6 of the Regulations. Attach process diagrams and other supporting material as relevant.
Example: Aluminium smelting
Describe how the EITE activity you conduct at the site uses the Hall-Héroult process to transform alumina into saleable aluminium metal.
Also explain how any requirements under Schedule 6 relating to the conduct of the EITE activity will be met for the 2016 year.
Example: Smelting zinc
The EITE activity definition requires zinc output of 99.95% or higher purity.
Explain how the smelting process you conduct at the site is capable of meeting this purity requirement.
If the EITE activity has not yet commenced at the site but is due to commence in 2016 you must state what approvals are necessary for the conduct of the EITE activity (e.g. Commonwealth government EPBC approval,
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 6
state government environmental approval and/or license, state government planning/construction approval, etc.) and whether these approvals have been obtained at the time of making the application.
Part E: Site details
The site is the geographical location at which the EITE activity is carried out. The site must be located in Australia to be eligible for an exemption certificate.
An application can only relate to one site.
If the EITE activity is carried on independently at multiple sites, applications must be lodged separately for each site.
If the processes which constitute a single EITE activity occur across multiple sites, applications must be lodged separately for each site and the amount of relevant product reported in accordance with the concept of an activity group (see page 9 for further details).
Provide details of the site to which the application relates, including the site name (the name commonly referred to for business purposes) and the site location.
The site is the geographical location at which the EITE activity is carried out. The site must be located in Australia to be eligible for an exemption certificate.
Part F: Quantity of relevant product
What is relevant product?
Relevant product is the product (or input) as defined in Division 3 of the applicable activity definition under Schedule 6 of the regulations.
Example: Production of methanol
Division 3 – Electricity baseline for calculating exemption
610 Electricity baseline for product
The electricity baseline for calculating the amount of a liable entity’s exemption in respect of the production of methanol is 0.490 MWh per tonne of 100% equivalent methanol (CH3OH) that is produced by carrying on the emissions-intensive trade-exposed activity.
The relevant product is 100% equivalent methanol (CH3OH) that is produced by carrying on the EITE activity (i.e. methanol produced by some other means is not counted as relevant product).
Some EITE activities can produce more than one type of relevant product. In this case you will need to complete ‘Appendix D: Quantity of relevant product ’ 9 in relation to each additional type of relevant product that is produced from the EITE activity at the site. Appendix D is available on the Clean Energy Regulator website.
Example: Production of magnesia
This EITE activity may produce three types of relevant product. An example is the three products listed
9 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
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below:
Caustic calcined magnesia
Deadburned magnesia
Electrofused magnesia
Complete Part F for one of these relevant products and complete Appendix D for each of the other relevant products produced from the EITE activity at the site.
Is the site part of an activity group?
Where the production processes which constitute a single EITE activity occur across two or more different sites (with an intermediate product transferred between the sites as part of the production processes), the sites may constitute an activity group as defined in sub-regulation 22A(9).
Example: Production of high purity ethanol
A site transforms fermentable sugars into low purity ethanol (an intermediate product).
The low purity ethanol is transferred to a different site where it undergoes further purification to produce high purity ethanol (the relevant product).
The two sites constitute an activity group.
If the EITE activity at the site is part of an activity group, please complete Appendix A in addition to the standard application form.
For a site which is part of an activity group, the amount of relevant product referable to the site must be calculated using the method of paragraph 22B(2)(b) of the Regulations.
This method apportions the total relevant product for all sites in the activity group between each of the sites in the activity group:
PT× ESET
Where:
PT = total relevant product from all sites in the activity group
ES = estimated electricity consumption at the site to which the application relates10
ET = sum of estimated electricity consumption for all sites in the activity group11
Note that this methodology applies to all relevant products produced from the activity group, even if some relevant products are wholly produced at only one site in the activity group.
For each applicable site in the activity group, estimate electricity consumption based on the ratio:
10 Any sites where the EITE activity is only carried on in an ancillary way should be discounted from this calculation.11 Any sites where the EITE activity is only carried on in an ancillary way should be discounted from this calculation.
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EITEactivity electricity consumptiontotal siteelectricity consumption
If the amount of electricity consumed in the EITE activity represents 80% or more of the total electricity consumed at the site, provide an estimate of the total electricity consumed at the site.
Otherwise, provide an estimate of only the electricity consumed in the EITE activity.
For example: An activity group (of three sites) has a total of 184,000 tonnes of relevant product. The amount of relevant product attributable to each site is determined as follow in table below.
Site % of site electricity used in EITE activity
Amount of site electricity (MWh)
ES (MWh) PT x [ ES / ET ] (tonnes)
Site A 50% 128,000 64,000 184,000 x [64,000 / 156,000] = 75,487.2
Site B 90% 42,000 42,000 184,000 x [42,000 / 156,000] = 49,538.4
Site C 20% 250,000 50,000 184,000 x [50,000 / 156,000] = 58,974.4
Sub-total - - 156,000 -
Calculating ASP
The quantity ASP (on which the amount of exemption is based) has three components:
ASP2016 = SP2014-15 + EASP2015-16 + ST2015-16
Where:
SP2014-15 is the quantity of relevant product for the 2014–15 financial year.
EASP2015-16 is the quantity of new or expected additional production, if any, within the meaning of regulation 22ZD(1) for the 2015–16 financial year. If applicable, please complete Appendix B or C in conjunction with calculating this quantity.
ST2015-16 is the true-up mechanism to adjust for any discrepancy between the quantity of relevant product for the 2013–14 financial year (including, if applicable, any quantity of new or expected additional production for the 2014–15 financial year) as assessed in the 2015 application, and the actual quantity of relevant product for the 2014–15 financial year.
If no exemption certificate was issued for the EITE activity and the site in 2015, then ST2015-16 is zero (in accordance with regulation 22ZB(4)(b).
Quantity of relevant product SP2014-15
You must report the quantity (mass or volume) of relevant product produced (or used) at the site in the 2014–15 financial year.
You should be able to provide an accurate value or reasonable estimate based on site data.
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You may be asked to provide supporting evidence such as site production (or inventory) database records, or production quantities submitted under other statutory reporting requirements.
The quantity of relevant product must be referable to the site:
It must be produced from (or used in) the EITE activity carried on at the site specified in the application, or
If the site is part of an activity group, it is not a site where the activity is carried on in an ancillary way, and the quantity of relevant product is determined in accordance with the method of regulation 22B (described on page 9).
Either way, only one site can be nominated in respect of a quantity of relevant product (such that exemption is not allocated for the same quantity of relevant product more than once).
A requirement for most (but not all) relevant products is that the relevant product is of saleable quality.
Saleable quality is defined in regulation 22C, and is generally taken to have its ordinary meaning in the respective market, providing it:
has commercial value as the output of an EITE activity process
does not include sub-standard product that was discarded
does not include product that was subsequently recycled back into the EITE activity to produce a new output, and
does not include product that was scrapped or lost before packaging.
Explain the basis on which quantity of relevant product SP2014-15 was determined, including how it was identified to comply with any material properties or specifications identified in the relevant activity definition under Part 3 of Schedule 6 of the Regulations.
How do you determine how much of your overall production (or input) is relevant product? For example, this may involve:
identifying and deducting some quantity that does not meet the requirements of the EITE activity definition
converting to dry weight basis (if applicable), or
converting to 100% equivalent basis (if applicable).
Example: Production of methanol
150,000 tonnes of methanol is produced at the site in the nominated financial year. However this total includes 50,000 tonnes of imported methanol which is blended in at an earlier stage of the production process.
As it is a requirement that the methanol must be a product of the EITE activity at the site, the amount of relevant product was calculated as:
150,000 tonnes - 50,000 tonnes = 100,000 tonnes.
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 10
Describe the method of measuring the quantity of relevant product SP2014-15, including the following information as applicable:
What type of measurement apparatus is used?
At what point in the production process did measurement take place?
What is the frequency and accuracy of the measurement method?
How is the relevant product typically measured by the industry (are there any accredited industry test methods)?
Are there any measurement requirements imposed by the National Measurement Act 1960?
Attach all relevant documents to support the method of measurement.
To assist the Clean Energy Regulator with verifying the quantity of relevant product and planning in relation to future year applications:
state the annual capacity (nameplate or estimated maximum) of relevant product for the site, and
detail any planned changes to the site which may have a material (e.g. greater than or equal to ±10% variation) effect on future quantities of relevant product.
Period for reporting quantity of relevant product
You must report the quantity of relevant product for the previous financial year.
Example: In the 2016 exemption certificate application you must report the quantity of relevant product for the 2014–15 financial year.
A true-up mechanism in the exemption calculation adjusts for any discrepancy between the quantity of relevant product reported for the previous financial year, and the actual quantity of relevant product in the applicable financial year.
Example: For the 2016 application year you report 60,000 tonnes of relevant product for the 2014–15 financial year
However, the quantity of relevant product in the 2015–16 financial year (which is the basis for the exemption provided for 2016) is actually 50,000 tonnes.
As such, the quantity of relevant product in the 2017 application will be reduced by 10,000 tonnes to account for the higher-than-actual quantity of relevant product reported for 2016.
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Part G: Exemption calculation
Exemption is provided for the calculated amount of liable electricity used in the EITE activity at the site in the year, multiplied by the applicable exemption assistance rate.
Please calculate the expected MWh amount of exemption using the method of regulation 22Z:
PE = EP x ASP x k x G
Where:
EP = Electricity baseline (from Schedule 6 of Regulations for the applicable activity)
ASP = Quantity of relevant product (as reported in Part F of application)
k = Exemption assistance rate of 100% (calculated under regulation 22ZA(1))
G = Liable % (as determined in Part E of application)
That is: exemption = [electricity baseline] x [relevant product] x [exemption %] x [liable %]
Example: Production of high purity ethanol (for 2015)
Electricity baseline = 0.168MWh/kL of relevant product (from schedule 6)
Relevant product = 100,000kL
Exemption % = 100%
Liable % = 100% (assume all electricity used in the activity is liable)
Exemption = [0.168] x [100,000] x [100%] x [100%] = 16,800 MWh
If more than one type of relevant product is produced at the site, sum individual calculations to obtain total exemption.
Example: Production of magnesia (for 2015)
Caustic calcined magnesia
Deadburned magnesia Electrofused magnesia
Electricity baseline (MWh/t)
0.0757 0.202 2.45
Relevant product (t) 100,000 200,000 100,000
exemption % 100% (highly emissions-intensive activity)
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Liable % 100% (assume all electricity used in the activity is liable)
PEcaustic calcined magnesia = [0.0757] x [100,000] x [100%] x [100%] = 7,570 MWh
PEdeadburned magnesia = [0.202] x [200,000] x [100%] x [100%] = 40,400 MWh
PEelectrofused magnesia = [2.45] x [100,000] x [100%] x [100%] = 245,000 MWh
Exemption = PEcaustic calcined magnesia + PEdeadburned magnesia + PEelectrofused magnesia
= 7,570 + 40,400 + 245,000 = 292,970 MWh
When stating the amount of the exemption that should be set out in the exemption certificate and how that amount should be calculated, you must also state any assumptions made about values or amounts not known at the time of the application.
Supplementary information
Audit report
It is a requirement under the Act and Regulations from 2012 onward, that an exemption certificate application be accompanied by an audit report in the circumstance where:
the application is made by a prescribed person under regulations 22G, 22H, 22I, 22J or 22K of the regulations, and
the amount of exemption (in MWh) applied for exceeds 15,000MWh for the application year.
Because EITE activities now have full exemption for all activities it is expected that some entities that did not need to provide an audit report previously will need to do so for 2016 because their exemption level exceeds 15,000 MWh.
The legislative reference for this requirement is paragraph 46A(2)(bb) of the Act and regulation 22UA of the Regulations. The audit report must comply with the requirements of regulation 22UB of the Regulations.
For more information on what is required in the audit report see the Audit determination handbook12 on the Clean Energy Regulator website.
Exemption certificate application processing times
Processing times for exemption certificate applications for 2016 and future years are outlined in regulation 22ZL.
All applicants must lodge 2016 exemption certificate applications to the Clean Energy Regulator on or before 30 March 2016. No extension of time can be given to lodge an exemption certificate application after the due date.
12 http://www.cleanenergyregulator.gov.au/NGER/For-auditors/Requirements-and-responsibilities
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The Clean Energy Regulator must issue an exemption certificate within 60 days after receipt of the exemption certificate application. If further information is requested about the application, then the Clean Energy Regulator must issue an exemption certificate issued 45 days after receipt of the further information.
Information contained in the exemption certificate
The following information will be contained in the exemption certificate:
unique exemption certificate identification number as determined by the Regulator
name of the prescribed person
name of the liable entity to whom the exemption certificate relates
site and EITE activity to which the exemption certificate relates
year to which the exemption certificate relates
date of issue of the exemption certificate
amount of exemption in MWh
amount of relevant product, as used in determining the amount of exemption
percentage of electricity constituting a relevant acquisition, as used in determining the amount of exemption, and
details of amendments made to the exemption certificate (if any).
Amending an exemption certificate
The Clean Energy Regulator may amend an exemption certificate upon request in writing by the prescribed person (under subsection 46C(2) of the Act), with consideration to the matters outlined in regulation 22ZN.
The Clean Energy Regulator may also amend an exemption certificate for 2016 on their own initiative (under subsection 46C(3) of the Act) in the following circumstances.
There is a change of liable entity (regulation 22ZP)
A prescribed person who has been issued with an exemption certificate may apply for another exemption certificate under regulation 22L if the liable entity for the site changes during the 2016 year.
As a result:
The Clean Energy Regulator will issue the prescribed person with a second exemption certificate providing a pro-rata amount of exemption (based on number of days of liability in the year) to the second liable entity.
The Clean Energy Regulator will then amend the first exemption certificate, reducing its amount of exemption by the amount in the second exemption certificate.
Furthermore, if the liable entity for the site changes again during the 2016 year, the prescribed person may apply for a third exemption certificate in relation to the third liable entity (on or before 31 December 2016).
Note: Applications for the 2016 year must be made on or before 31 December 2016.
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There are multiple liable entities (regulation 22ZQ)
A prescribed person who has been issued with an exemption certificate may apply for another exemption certificate under regulation 22M if there were multiple liable entities for the electricity consumed at the site during the 2016 year.
As a result:
The Clean Energy Regulator will issue the prescribed person with a second exemption certificate providing pro-rata amount of exemption (based on total expected relevant acquisitions in the year) to the second liable entity.
The Clean Energy Regulator will then amend the first exemption certificate reducing the amount of exemption by the amount in the second exemption certificate.
Note: Applications must be made on or before 30 June 2016 for applications in regards to paragraph 22M(b)(i) of the Regulations, or must be made on or before 31 December 2016 for applications in regards to paragraph 22M(b)(ii) of the Regulations.
The EITE activity ceases at the site (regulation 22ZR)
An exemption certificate may be amended if during the 2016 year the Clean Energy Regulator becomes satisfied that the EITE activity has ceased at the site.
The exemption certificate is inaccurate (regulation 22ZS)
An exemption certificate may be amended if during the 2016 year the Clean Energy Regulator becomes aware that the exemption certificate is inaccurate.
Transfer of exemption certificate to liable entity
The prescribed person may provide a copy of the exemption certificate to the named liable entity, who may use it to reduce their relevant acquisitions for the applicable year.
The transfer of an exemption certificate is a matter between the prescribed person and the liable entity, and the Clean Energy Regulator does not have any role in overseeing this transaction. You should discuss timelines and other aspects of the negotiation with the liable entity.
Note: Only the named liable entity can use the exemption certificate for exemption from liability.
How an exemption certificate reduces a liable entity’s LRET and SRES liability
A liable entity must submit their exemption certificate with their Energy Acquisition Statement (EAS) for the applicable year (the AEAS for a year is due by 14 February of the following year) in order to reduce their relevant acquisitions for the year by the amount stated on the exemption certificate.
The amount of exemption provided by a single exemption certificate can be used to reduce both the Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES) liabilities of the named liable entity.
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LRET liability = [total relevant acquisitions (MWh) - exemption (MWh)] x RPP
LRET liability is effectively reduced by [exemption (MWh) x RPP]
SRES liability = [total relevant acquisitions (MWh) - exemption (MWh)] x STP
SRES liability is effectively reduced by [exemption (MWh) x STP]
Where:
RPP = Renewable Power Percentage
STP = Small-scale technology percentage
The relevant values of RPP and STP for 2015 are published on the Clean Energy Regulator website. The 2016 values will be published later in 2016.
For example: In the 2016 year, if the RPP is 13%, and if the STP is 10%, and a RET liable entity has total relevant acquisitions of 100,000MWh and an exemption certificate which provides 20,000MWh of exemption.
RET liability without the exemption certificate
LRET = 100,000MWh x 13% = 13,000 LGCs
SRES = 100,000MWh x 10% = 10,000 STCs
Liability with the exemption certificate LRET = [100,000 - 20,000] MWh x 13% = 10,400 LGCs
SRES = [100,000 - 20,000] MWh x 10% = 8,000 STCs
The exemption certificate reduces liability by
20,000MWh x 13% = 2,600 LGCs
20,000MWh x 10% = 2,000 STCs
These examples provide a guide only. Liable entities are required to surrender STCs on a quarterly basis and the calculations determining quarterly surrender requirements are complex. For more information about determining liability under SRES13 see the Clean Energy Regulator website.
Auditing and compliance
The Clean Energy Regulator may audit the information provided in the exemption certificate application (including relevant product data, details relating to the conduct of the EITE activity, and liable/non-liable electricity consumption).
The Act provides the Regulator with the authority to search premises and seek information to assess compliance with the Act.
13 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Renewable-Energy-Target-liable-entities/Calculating-certificate-liability
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 16
Possible outcomes of an audit may include amendments to the exemption certificate or penalties under the Act.
Protected information
Protected information provided in the application will be treated as commercial-in-confidence and in accordance with the secrecy provisions of Part 12 of the Act and Part 3 of the Clean Energy Regulator Act 2011 as relevant.
These provisions may allow information to be divulged to specified persons or bodies.
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 17
Publication of exemption certificate information
Under section 38C of the Act, the Clean Energy Regulator is required to publish the following information in relation to exemptions:
the name of each person to whom an exemption certificate is issued and the EITE activity set out in the exemption certificate (must be published within 14 days after the exemption certificate is issued)14
the name of each liable entity that receives an exemption for a year, the estimated value in dollars of the amount of exemption, and the name of each of the EITE activities set out in the exemption certificates to which the exemption relates (must be published by 1 October of each year)15, and
the total amount of exemptions given for each EITE activity for a year (must be published by 1 October of each year)16.
Contact usIndustrial and Transport team
Phone: 1300 553 542
Email: [email protected]
14 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Issued-partial-exemption-certificates 15 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Reported-exemptions 16 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Reported-exemptions
GPO Box 621 Canberra ACT 2601 1300 553 542 [email protected] www.cleanenergyregulator.gov.au 18
