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CLEAN ENERGY AMENDMENT REGULATION 2013 (NO. 1) (SLI NO 17 OF 2013)
Select Legislative Instrument 2013 No. 17
Clean Energy Act 2011
Clean Energy Amendment Regulation 2013 (No. 1)
Section 312 of the Clean Energy Act 2011 (the Act) provides, in part, that the Governor-General may make regulations prescribing matters required or permitted by the Act, or necessary or convenient to be prescribed for carrying out or giving effect to the Act.
The Act, together with the other Acts in the Clean Energy Legislative Package, establishes the carbon pricing mechanism as part of the Government's climate change plan, as set out in the document Securing a Clean Energy Future: the Australian Government's Climate Change Plan.
The Clean Energy Amendment Regulation 2013 (No. 1) (the Regulation) amends the Clean Energy Regulations 2011 (the Principal Regulations) to make changes to the application requirements for large GST groups and other minor administrative and technical amendments under the Opt-in Scheme.
The liquid fuels Opt-in Scheme
Part 3, Division 7 of the Act provides that regulations may formulate a scheme that allows eligible users of certain fuels to 'opt in' to the carbon pricing mechanism. This scheme is known as the 'Opt-in Scheme'. Regulations establishing the Opt-in Scheme were made in late 2012.
The Regulation makes amendments to reduce the compliance requirements for GST group representatives wishing to opt-in to the carbon pricing mechanism where their GST group contains more than 20 members, by allowing for more flexible requirements for obtaining a consent, that functions as a guarantee, from members of those GST groups. The amendments also make associated amendments to the notification and reporting requirements of the Opt-in Scheme to account for the alternate application arrangements, and make minor technical and administrative amendments.
The minor technical and administrative amendments include:
* ensuring that the fuel acquisitions of a non-participant GST joint venture operator are included in the GST joint venture's opt-in amount; and
* setting out the consent and guarantee arrangements when a DOIP's GST group representative changes.
A summary of the key amendments made by the Regulation is provided at Attachment A.
A Human Rights Statement in respect of the Regulation is included at Attachment B.
Details of the Regulation are set out in Attachment C.
The Regulation is a legislative instrument for the purposes of the Legislative Instruments Act 2003.
The Regulation commences on the day after it is registered.
The Clean Energy Act and Clean Energy Regulations reflect the outcomes of comprehensive consultation with the public and stakeholders.
In September 2010 the Government announced the establishment of the Multi-Party Climate Change Committee (MPCCC) to consult, negotiate, and report to the Cabinet, through the Minister for Climate Change and Energy Efficiency, on agreed options for the implementation of a carbon price in Australia; and to provide advice on, and participate in, building community consensus for action on climate change.
On 24 February 2011, the Prime Minister announced the climate change framework outlining the broad architecture for a mechanism, which had been considered by the MPCCC. The proposed mechanism focused on the high level architecture, start date, potential mechanisms to allow flexibility to move to emissions trading, sectoral coverage and international linking arrangements.
DCCEE conducted a public consultation process on the proposed mechanism in April and May 2011.
On 10 July 2011, the Government published Securing a clean energy future: The Australian Government's climate change plan. This set out the details of the mechanism and related proposals for fostering renewable energy generation, energy efficiency and action on the land. It also set out measures to assist Australian households and businesses to adapt to the mechanism and to support energy markets.
On 28 July 2011, the Government released the following draft bills to implement the mechanism and related initiatives for public comment:
* Clean Energy Bill 2011;
* Clean Energy (Consequential Amendments) Bill 2011;
* Clean Energy Regulator Bill 2011;
* Climate Change Authority Bill 2011;
* Clean Energy (Unit Shortfall Charge--General) Bill 2011;
* Clean Energy (Unit Issue Charge--General) Bill 2011;
* Clean Energy (Charges--Excise) Bill 2011;
* Clean Energy (International Unit Surrender Charge) Bill 2011;
* Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Amendment Bill 2011;
* Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Amendment Bill 2011;
* Fuel Tax Legislation Amendment (Clean Energy) Bill 2011;
* Excise Tariff Legislation Amendment (Clean Energy) Bill 2011; and
* Customs Tariff Amendment (Clean Energy) Bill 2011.
During the period from 28 July 2011 to 22 August 2011, DCCEE:
* met with government representatives from the States and Territories;
* convened a forum for peak industry, environmental, community and other non-government organisations;
* convened three legal experts workshops (in Sydney, Melbourne and Brisbane);
* convened four technical working group meetings on the treatment of natural gas, the point of liability and landfill (in Canberra and Perth);
* conducted meetings and teleconferences with business representative groups, businesses and other stakeholders; and
* received over 300 submissions on the draft legislation.
During this time stakeholders requested the ability for large users of liquid fuel to opt-in to the carbon pricing mechanism and have their fuel use directly covered by the mechanism, rather than facing an equivalent carbon price through the fuel tax or excise systems. The Opt-in Scheme was included in Clean Energy Act 2011 with the bulk of the Scheme to be developed in regulations. Consultation on the policy of the Opt-in Scheme was undertaken in mid-2012, and an exposure draft of the regulations that establish the Scheme was consulted on from 18 October to 12 November 2012.
The amendments deal with an administrative matter, reducing the application burden for large GST groups applying to opt-in under the Opt-in Scheme. As these amendments deal with a residual issue arising from the 2012 consultation on the Opt-in Scheme further consultation on these provisions was not considered necessary or appropriate.
Consultation was also not considered necessary or appropriate for the remaining provisions, which make minor technical amendments to the Clean Energy Regulations 2011.
Authority: Section 312 of the Clean Energy Act 2011
Summary and Policy Guidance on the Clean Energy Amendment Regulation 2013 (No. 1)
Schedule 1 to the Clean Energy Amendment Regulation 2013 (No. 1) (the Regulation) amends the Clean Energy Regulations 2011 (the Principal Regulations) to change the application procedures under the liquid fuels Opt-in Scheme to reduce the compliance requirements for GST group representatives wishing to opt-in to the carbon pricing mechanism where their GST group contains more than 20 members, by allowing for more flexible requirements for obtaining consents from members of those GST groups and makes minor technical amendments to the Opt-in Scheme.
The Opt-in Scheme is allowed for in Part 3, Division 7 of the Act. The purpose of the Scheme is to allow large users of liquid fuel to opt-in to the carbon pricing mechanism for the potential emissions embodied in the fuel they use, rather than facing an effective carbon price through the fuel tax or excise systems.
The Principal Regulations establish the conditions under which a person may be declared a DOIP, and the administrative arrangements for opting-in and opting-out under the Opt-in Scheme. The amendment provides alternative arrangements for large GST groups applying to opt-in to the carbon pricing mechanism by relaxing the requirement for consent from each GST group member. These alternative arrangements are balance the need for guarantees to be in place in the event that the DOIP does not meet its Opt-in Scheme liabilities against the need for the application process to not be onerous.
Statement of Compatibility with Human Rights
Prepared in accordance with Part 3 of the Human Rights (Parliamentary Scrutiny) Act 2011
Clean Energy Amendment Regulation 2013 (No. 1)
This Regulation is compatible with the human rights and freedoms recognised or declared in the international instruments listed in section 3 of the Human Rights (Parliamentary Scrutiny) Act 2011.
Overview of the Clean Energy Amendment Regulation 2013 (No. 1)
The Regulation amends the Opt-in Scheme, provided for under the Clean Energy Regulation 2011. It reduces the legislative compliance requirements for GST group representatives wishing to opt-in to the carbon pricing mechanism where their GST group contains more than 20 members, by allowing for more flexible arrangements for obtaining consents from members of those GST groups, and makes other minor administrative and technical amendments to the Opt-in Scheme.
Human rights implications
The Regulation engages the right to privacy and reputation.
The Regulation amends certain administrative arrangements under the Opt-in Scheme for an applicant with more than 20 members in their GST group. It adds additional notification requirements for these large GST groups that have opted-in to the carbon pricing mechanism and have not provided consent from all their members to the opt-in.
These notification requirements mean that the GST group representative (the designated opt-in person (DOIP)) must notify the Clean Energy Regulator (the Regulator) when the 'identifying information' for a GST group member changes. For example, the notification of contact details for individuals within the GST group member's organisation (paragraphs (e)(ii), (f) and (h)-(j) of the definition of 'identifying information' in regulation 1.3). In some cases the details may constitute personal information about the individuals concerned.
The collection of an individual's contact details is necessary to enable the Regulator to administer the Opt-in Scheme, as the details will be used to help ensure the integrity of consents provided under the Opt-in Scheme and provide a point of contact for the Regulator.
Although in some circumstances some of the contact details may already be publicly available, the contact details for these individuals will not be publicly disclosed. The information will be regulated and treated in accordance with the secrecy provisions set out in the Clean Energy Regulator Act 2011 and the Privacy Act 1988.
The Regulation is compatible with human rights because, to the extent that it may limit those rights, that limitation is reasonable, necessary and proportionate.
Minister for Climate Change and Energy Efficiency
Details of the Clean Energy Amendment Regulation 2013 (No. 1)
Section 1 - Name of Regulation
Section 1 provides that the name of the Regulation is the Clean Energy Amendment Regulation 2013 (No. 1).
Section 2 - Commencement
Section 2 provides that the Regulation commences on the day after it is registered.
Section 3 - Authority
Section 3 provides that the authority for the Regulation is the Clean Energy Act 2011.
Section 4 - Schedule(s)
Section 3 provides that the Schedule to the Regulation makes amendments to the Clean Energy Regulations 2011.
SCHEDULE 1 - AMENDMENTS
Item  - After paragraph 3.37(1)(c)
Item  amends regulation 3.37, which sets out when the Regulator must declare a person to be a designated opt-in person (DOIP). The amendment sets out when the Regulator must declare a person to be a DOIP when an applicant has used new subparagraph 3.47(1)(a)(ii) to provide consent from less than 100 per cent of the membership of its GST group. These conditions are when:
* the GST group members that have provided consent consist of the GST group members that will have fuel that contributes to the DOIP's opt-in amount.
* the GST group members that provide consent would be able to honour a guarantee for an amount of unit shortfall charge or late payment penalty if required to do so; and
Item  - Subregulation 3.37(2), item 2, column 3
Item  ensures that a DOIP that is a GST joint venture operator and that is not also a GST joint venture participant has fuel that they acquire, manufacture or import for the GST joint venture opted-in. Without this amendment fuel acquisitions by GST joint venture operators that are participants and GST joint venture operators that are not participants would have their fuel acquisitions treated differently.
Item  - Paragraph 3.45(1)(f)
Item  amends regulation 3.45, which sets out the circumstances under which a person will be opted out of the carbon pricing mechanism. This now includes where the DOIP has not provided the consent from new acquirers under new regulation 3.47(2A).
New regulation 3.47(2A) is inserted by item  and requires a DOIP that has provided consent from less than 100 per cent of its GST group members at the time of opt-in to provide additional consents from its GST group members in certain circumstances.
Item  - After paragraph 3.45(1)(f)
Item  amends the powers of the Regulator to opt out a person from the Opt-in Scheme. Under this addition, the Regulator may opt out a DOIP where the DOIP has accessed the reduced consent requirements in new subparagraph 3.47(1)(a)(ii) and one of the GST group members that provided consent has become an externally administered body corporate. This amendment is required to ensure that a guarantor is in place for a DOIP who has opted-in under the reduced consent requirements.
Item  - Paragraph 3.47(1)(a)
Item  amends regulation 3.47 to provide alternative consent arrangements for GST group with more than 20 members. This amendment provides that for an applicant that is a representative member of a GST group consent must be provided from:
* all members of the GST group; or
* if the GST group contains more than 20 members, each of those members that acquires, manufactures or imports fuel that will be opted-in.
This allows GST group representatives of large GST groups to apply without having to obtain consent from all their members.
Item  - Subregulation 3.47(2)
Item  replaces subregulation 3.47(2) to clarify the circumstances in which consent must be provided to the opt-in within a financial year. This item specifies that where a GST group or GST joint venture that has opted-in has a new member or participant or the representative member of the GST group that a DOIP belongs to changes, and the new member, participant or representative member has not provided consent, then consent from that person must be provided by the DOIP. This consent must be provided by the end of the financial year that the change occurs.
Item  - After subregulation 3.47(2)
Item  inserts a new subregulation in regulation 3.47, which sets out when a DOIP that has opted-in under the reduced consent requirements must provide new consents within a financial year. A new consent, that is taken to be a guarantee, must be provided if a person that did not provide consent at the start of the financial year begins to acquire, manufacture or import fuel. This consent must be provided within 28 days of the DOIP becoming aware that the person has begun to acquire, manufacture or import fuel.
This amendment ensures that any person that contributes to the DOIP's opt-in amount has provided a guarantee for the payment of a unit shortfall charge and any associated late payment penalty. Any new members of the GST group are also required to provide consent before the end of the financial year in which they join under existing subregulation 3.47(2).
Items  and  - Subregulation 3.47
Items  and  amend subregulation 3.47(3) and add new subregulation 3.47(3A) to specify the scope of the consent and guarantee that is provided by the relevant members, participants or GST group representative.
This amendment ensures that there is a guarantee in place for individual members of GST groups that opt-in with the consent of their GST group representative, and that the consent that is provided by the members or participants in a GST group or GST joint venture is valid each year.
Item  - After subregulation 3.47(4)
Item  is included for the avoidance of doubt and clarifies that the reduced consent requirement specified in new subregulation 3.47(1)(a) do not affect the application of Division 7 of the Principal Regulations to any other member of the GST group.
Item  - At the end of regulation 3.50
Item  includes additional notification requirements for DOIPs that applied as the representative member of a GST group with more than 20 members. These notification requirements ensure that the DOIP must notify the Regulator within 14 days of becoming aware that a member that has provided consent:
* no longer acquires fuel that will be included in the DOIP's opt-in amount;
* has changed its identifying information;
* has become an externally administered body corporate; or
* no longer satisfies the 90 per cent membership requirement of paragraph 48-10(1)(b) of the A New Tax System (Goods and Services Tax) Act 1999.
And must also notify the Regulator within 14 days of becoming aware that a person that has not provided consent acquires, manufactures or imports fuel that will be included in the DOIP's opt-in amount. This provides the Regulator with the notification that a person that has not guaranteed the payment of a unit shortfall charge will be acquiring fuel that will contribute to the opt-in amount. If consent from the new acquirer is not provided (under amended regulation 3.47) then the Regulator may choose to opt out the DOIP from the Opt-in Scheme.