The objects of this Act are:

  (a)   to encourage the additional generation of electricity from renewable sources; and

  (b)   to reduce emissions of greenhouse gases in the electricity sector; and

  (c)   to ensure that renewable energy sources are ecologically sustainable; and

  (d)   to contribute to the achievement of Australia's greenhouse gas emissions reduction targets.

This is done through the issuing of certificates for the generation of electricity using eligible renewable energy sources and requiring certain purchasers (called liable entities ) to surrender a specified number of certificates for the electricity that they acquire during a year.

Where a liable entity does not have enough certificates to surrender, the liable entity will have to pay renewable energy shortfall charge.

An exemption relating to one or more emissions - intensive trade - exposed activities may be taken into account in working out a liable entity's renewable energy certificate shortfall for a year. If it is, it will reduce the renewable energy shortfall charge otherwise payable.