Changes to the proposed Carbon Pollution Reduction Scheme

Author: Brian Glendenning, Samantha Ellis

Publish Date: June 1, 2009

The Carbon Pollution Reduction Scheme (CPRS) exposure drafts were released for consultation during March 2009.   In response to that consultation process a number of changes were made to the exposure drafts.  The CPRS legislation package was introduced to Parliament on 14 May 2009.

The changes to the CPRS Bill are summarised as follows:

  1.  A delay in the start date of the CPRS of one year, from 1 July 2010 until 1 July 2011.

  2.  A one year fixed-price period in 2011-12, during which emissions units will cost $10 per tonne of carbon, with the transition to full market trading from 1 July 2012.  These units will not be able to be banked for future years, relinquished or transferred.

  3.  The 2012-13 period will commence with a price cap based on the original White Paper figure of $40 adjusted by real growth.

  4.  Landfill facilities with emissions of 25,000 tonnes of carbon dioxide equivalence or more will continue to be covered by the CPRS.

  5.  Legacy emissions from waste deposited before 1 July 2011 will count towards the threshold but will not be covered by the CPRS.

  6.  A threshold of 10,000 tonnes will apply to a facility within a prescribed distance to another landfill that exceeds the 25,000 tonne threshold.

  7.  The meaning of supply has been expanded so that a supply occurs when a person makes an eligible upstream fuel available to another person for combustion at a facility, even if there is no change in ownership, or when ownership of the fuel or synthetic greenhouse gases are transferred, even if there is no physical delivery of the substance.

  8.   Liability for emissions from a particular facility can be transferred to another entity in certain circumstances on the basis that the company with initial responsibility for the emissions provides a guarantee that the liabilities will be met; however transfers to a foreign entity are excluded.

  9.  As a Global Recession Buffer, emissions-intensive trade-exposed (EITE) industries will be provided with additional units in the first 5 years of the CPRS.  If an EITE does not comply with its reporting requirements these additional units can be withdrawn from the non-complying EITE for a period of 2 years.

  10.Companies should be aware that eligible businesses will receive funding to undertake energy efficiency measures commencing in 2009-10.

The timing and detail of the CPRS may change again if the Government is unsuccessful in getting agreement on the CPRS package this month.

For further information regarding the proposed changes to the Carbon Pollution Reduction Scheme, please contact Samantha Ellis on 02 4907 6334 or Brian Glendenning on 02 4907 6320.

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