House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for Climate Change and Energy Efficiency, the Hon Greg Combet AM MP and the Deputy Prime Minister and Treasurer, the Hon Wayne Swan MP)

Chapter 1 General amendments

Outline of chapter

1.1 Chapter 1 explains amendments to the Opt-in Scheme set out in Part 3, Division 7 of the CE Act. These amendments:

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further define the criteria that a person must meet to be declared a designated opt-in person (DOIP); and

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provide for the enforcement of reporting, record-keeping and notification requirements.

Chapter 1 also explains amendments to the NGER Act relating to:

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potential greenhouse gas emissions that allow liability to be assigned before emissions are produced; and

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nomination of operational control of a facility when it is not clear who has operational control.

This chapter covers Schedule 1.

Context of amendments

Opt-in Scheme

1.2 The Opt-in Scheme is to be set out in regulations. A person who meets the Opt-in Scheme's criteria can choose to have emissions from specified liquid fuels covered directly under the carbon pricing mechanism instead of paying an equivalent carbon price through the fuel tax system. The amendments augment the existing provisions of Part 3, Division 7 of the CE Act.

1.3 It is very easy to change the composition of GST groups and GST joint ventures, which may be the way in which persons participate in the Opt-in Scheme. This raises some practical difficulties for the operation of the Opt-in Scheme, which is not intended to operate with the same degree of flexibility as the GST system. For example, regular changes of membership within an opted-in GST group would impose significant administrative burdens on the CER, the ATO and Customs to track changing liability under the carbon pricing mechanism. It would also present an opportunity for GST groups and joint ventures to, in effect, opt-out of the carbon pricing mechanism at any time for selected amounts of fuel, by changing the composition of the GST group or GST joint venture.

1.4 The amendments are designed to address these issues, by providing that the membership of the GST group or GST joint venture at the beginning of the relevant financial year is, in effect, 'frozen' for the year and the DOIP is liable for the emissions of that group or joint venture for that year. The GST group or joint venture is 'frozen' only for the purposes of the CE Act.

Potential greenhouse gas emissions

1.5 The concept of potential emissions is used to assign liability for emissions before they are produced. Section 7B of the NGER Act currently refers to the potential greenhouse gas emissions embodied in an amount of natural gas. However, the Opt-in Scheme assigns liability for emissions from other fuel types before the emissions are produced.

1.6 The amendments allow the concept of 'potential emissions' to be used for the purposes of the Opt-in Scheme by extending it to fuel types other than natural gas.

Nomination of operational control

1.7 Sections 11 to 11C of the NGER Act deal with the concept of 'operational control', which is used to determine who has obligations under the NGER Act to report a facility's emissions, energy use and production.

1.8 Operational control also determines who is liable for the greenhouse gas emissions from the facility under the carbon pricing mechanism. The exceptions are where the liability is transferred under a liability transfer certificate or where a designated joint venture (JV) has the facility. Liability for the emissions of a facility of a designated JV is shared between the participants in the JV on the basis of the participating percentage determination for that facility. Participating percentage determinations are made by the CER.

1.9 The person with 'operational control' of a facility is generally the person with the authority to introduce and implement operating, health and safety and environmental policies at the facility, or the person that the CER has declared to have operational control of the facility.

1.10 In some circumstances it may not be clear who has operational control of a facility, because two or more people have authority to introduce and implement the relevant policies and two or more of those people have equal authority to implement operating and environmental policies.

1.11 Currently, the persons who have equal authority to introduce and implement operating and environmental policies at a facility must together nominate one of themselves as the person with operational control of that facility.

1.12 The carbon pricing mechanism will begin with a fixed charge period from 1 July 2012 until 30 June 2015 (called 'fixed charge years'), after which the carbon price will be determined by the market ('flexible charge years'). The current provisions have the effect of requiring nomination of operational control up to twice in each fixed charge year and at least once per flexible charge year. These requirements may impose additional compliance burdens on liable entities and others. This is particularly the case for JV participants, because they are usually unrelated companies which will need to reach agreement on operational control issues. The amendments streamline the nomination process and lessen the compliance burden on business.

Publication of energy consumption

1.13 Under section 24 of the NGER Act, the CER is required to publish totals of scope 1 emissions and scope 2 emissions by 28 February. From 28 February 2014 the CER is also required to publish the totals of energy consumption for the group (i) as reported and (ii) 'adjusted in accordance with the regulations'.

1.14 The amendments streamline publication of energy consumption data through only requiring the publication of an adjusted 'net energy consumption' figure, which is intended to avoid potential confusion by users of the published data.

Summary of new law

Opt-in Scheme amendments

1.15 The amendments to the provisions in Part 3, Division 7 of the CE Act, which underpin the Opt-in Scheme, concern administrative obligations on participants in the Opt-in Scheme and the eligibility requirements for DOIPs. These amendments provide additional powers to ensure that the Opt-in Scheme is robust, and its requirements are complied with by making reporting, record-keeping and notification obligations enforceable.

1.16 Changes to the eligibility criteria will ensure that the flexibility available to members of GST groups and GST joint ventures does not compromise the integrity of the Opt-in Scheme and the carbon pricing mechanism.

Potential greenhouse gas emissions

1.17 The amendments to the NGER Act and the CE Act concerning potential greenhouse gas emissions allow these provisions to apply to the liquid fuels covered by the Opt-in Scheme, in addition to natural gas.

Nomination of operational control

1.18 The amendments to the NGER Act concerning nomination of operational control streamline the requirements for nominating operational control, by removing any requirement for nomination to occur up to twice for each reporting year in fixed charge years and at least once for each reporting year in flexible charge years.

1.19 The amendments reduce the compliance requirements associated with making nominations by allowing a nomination to continue until such time as the CER cancels it, it is revoked by a new nomination or until it reaches its end date.

1.20 The amendments empower the CER to cancel nominations that become unnecessary or unsuitable. This is unnecessary under the current law because nominations that become unnecessary or unsuitable could be replaced each time a new nomination became due. The amendments also allow the nominators to make another nomination which replaces the original nomination. The nominators may also set an end date so that they can set a time to review their arrangement in advance.

Publication of energy consumption

1.21 The amendments to the NGER Act concerning the publication of energy consumption streamline publication of energy consumption data through only requiring the publication of a single figure for energy consumption which represents 'net energy consumption'.

Comparison of key features of new law and current law

Detailed explanation of new law

Preliminaries

1.22 The bill, once enacted, will be called the ' Clean Energy Legislation Amendment Act 2012'. The bill amends other legislation, namely the CE Act, the ANREU Act, the CFI Act, the Fuel Tax Act and the NGER Act, and does not contain any substantive provisions of its own. [Section 1] [Section 3]

1.23 The provisions of the bill commence at varying times, depending on the provisions concerned. These commencement arrangements are described along with the relevant provisions below. [Section 2]

Amendments to the Opt-in Scheme

Eligibility test

1.24 Section 92A of the CE Act sets out the eligibility test that must be passed by a person that is the DOIP for an acquisition, manufacture or import of fuel that is covered by the Opt-in Scheme.

1.25 The existing eligibility test in subsection 92A(4) of the CE Act is replaced with a new test, which provides that, in addition to meeting the criteria to be specified in regulations, the DOIP must, for fuel acquired, manufactured or imported in a particular financial year for which it is opting in:

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have been a member of a GST group at the start of the financial year where, if it is assumed that the fuel was acquired, manufactured or imported at the start of that financial year, the GST group would have been entitled to the fuel tax credit for that fuel; [Schedule 1, Part 1, item 19, new section 92A(4)(a), CE Act] or

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have been a member of a GST joint venture at the start of a financial year where, if it is assumed that the fuel was acquired, manufactured or imported at the start of that financial year, the GST joint venture would have been entitled to the fuel tax credit for that fuel; [Schedule 1, Part 1, item 19, new section 92A(4)(b), CE Act] or

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if neither of these criteria apply, then the DOIP must be the entity that was entitled to the fuel tax credit for the fuel. [Schedule 1, Part 1, item 19, new section 92A(4)(c), CE Act]

1.26 The amendments remove the ability of members of GST groups and GST joint ventures that have opted-in to change the composition of GST groups and GST joint ventures for the purposes of changing their liabilities under the carbon pricing mechanism in a relevant financial year. This provides clarity and certainty around the liabilities of those covered by the carbon pricing mechanism. It will reduce the potential for administrative complexity and costs for opted-in liable entities and for the CER, ATO and Customs.

1.27 The effect of the amendment is to, in effect, 'freeze' the membership of the GST group or GST joint venture at the beginning of the relevant financial year for the year so that the DOIP is liable for the emissions of that group or joint venture for that year. The GST group or joint venture is 'frozen' only for the purposes of the CE Act. The provisions do not prevent changes in the group or joint venture under the GST legislation.

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It is intended that in the case of a GST joint venture, the operator of the joint venture would pass the eligibility test under the new section 92A(4)(b) if it was also a participant in the GST joint venture, or under the new section 92A(4)(c) if it is not a participant.

Notification obligation

1.28 The Opt-in Scheme may require a person to notify the CER about matters which are relevant to the Opt-in Scheme. [Schedule 1, Part 1, item 20, new section 92DA, CE Act] This means that the CER may be informed of matters which may be relevant to a person's ongoing eligibility under the Opt-in Scheme and related matters.

Compliance with reporting, record-keeping and notification obligations

1.29 Under sections 92C, 92D and new section 92DA of the CE Act, the Opt-in Scheme may impose reporting, record-keeping and notification requirements for a DOIP. These obligations allow the CER to adequately monitor the fuel use of a participant in the Opt-in Scheme and be aware of any changes that will affect the eligibility of a person to be opted-in. Record-keeping requirements will allow the CER to ensure that the fuel use of a person, and the liability of the DOIP for that fuel use, is measured correctly. These records are needed because detailed information on a person's fuel use is not required to be kept under the NGER Act.

1.30 The record-keeping and reporting requirements of the Opt-in Scheme do not duplicate other record-keeping and reporting mechanisms elsewhere in the CE Act and only cover those businesses wanting to participate in the Opt-in Scheme.

1.31 A person who is subject to these requirements is obliged to comply with them. [Schedule 1, Part 1, item 21, new sections 92H(1), (2) and (3), CE Act] Furthermore, a person must not:

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aid, abet, counsel or procure;

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induce, whether by threats or promises or otherwise;

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be in any way, directly or indirectly, knowingly concerned with; or

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conspire with others to effect,

a contravention of new sections 92H(1), (2) and (3). [Schedule 1, Part 1, item 21, new sections 92H(4), CE Act]

1.32 The obligations in new sections 92H(1), (2), (3) and (4) of the CE Act are civil penalty provisions. [Schedule 1, Part 1, item 21, new section 92H(5), CE Act] Under section 253 of the CE Act the CER may apply to the court for a civil penalty order against a person who has contravened a civil penalty provision. Under section 255 of the CE Act the CER must seek the order no later than six years after the contravention. Section 252 of the CE Act provides that the court may order a civil penalty if it is satisfied a person has contravened a civil penalty provision.

1.33 Section 9 of the CE Act provides that the CE Act applies to the Australian, state and territory governments (that is, the Crown in right of each Australian jurisdiction). However, no government is liable to a pecuniary penalty. This protection does not apply to authorities of the Crown or to administrative penalties or late payment penalties.

1.34 Under section 252 of the CE Act the maximum pecuniary penalty for contraventions of new sections 92H(1), (2), (3) and (4) of the CE Act is 10,000 penalty units (currently $1.1 million) for a corporation or 2,000 penalty units (currently $220,000) for any other person.

1.35 These are civil penalty provisions because contravening them does not involve conduct of such serious moral culpability that criminal prosecution and sanctions are warranted. Further, as most liable entities are expected to be bodies corporate, the financial disincentives to misconduct provided by civil penalties are a more proportionate and effective enforcement tool, reflecting the practice of other areas of business regulation.

1.36 There is no requirement that the CER prove the person's intention, knowledge, recklessness, negligence or any other state of mind with regard to the penalty provisions in the CE Act. [Schedule 1, Part 1, item 22, new section 262(1)(ra), (rb) and (rc), CE Act] Section 262 of the CE Act makes it clear, for the avoidance of any doubt, that it is not necessary to prove a matter concerning a person's state of mind at the time the conduct occurred. It is simply a matter of proving whether the relevant provision has been contravened. Where a person's state of mind is relevant to the issue at hand, then this is specifically dealt with in the relevant provision.

1.37 The reporting and notification requirements are continuing contravention provisions under section 263 of the CE Act. A person who contravenes these penalty provisions, which involve, for example, a requirement to do something within a particular period, commits a separate contravention on each of the days on which the person fails to comply. [Schedule 1, Part 1, item 23, new sections 263(2)(ga) and (gb), CE Act] Under section 263 of the CE Act the maximum daily penalty for a continuing contravention of new sections 92H(1), (2), (3) and (4) is 500 penalty units (currently $55,000) for a corporation) and 100 penalty units (currently $11,000) for any other person.

1.38 The level of civil penalties for a contravention of new sections 92H (1), (2), (3) and (4) of the CE Act reflects their seriousness and represents a clear and strong disincentive for non-compliance. The integrity of the Opt-in Scheme and the carbon pricing mechanism could be compromised by liable entities failing to maintain records adequately or at all, and failing to report or notify accurately or in a timely way. For this reason, the penalties are significant.

Potential emissions embodied in a designated fuel

1.39 For the purposes of dealing with emissions embodied in a particular fuel source, section 7B of the NGER Act currently refers to the 'potential emissions embodied in an amount of natural gas'. The concept of 'potential greenhouse gas emissions' is used to assign liability for emissions before they are produced. In the CE Act, this concept has only been applied to emissions from natural gas.

1.40 The Opt-in Scheme, however, will assign liability for emissions from other specified fuel types before the emissions are produced. To allow for this, a definition of 'designated fuel' is inserted into the CE Act. This definition includes the fuels covered by the Opt-in Scheme. Sections 7, 7B and 7C of the NGER Act are amended so that the concept of potential greenhouse gas emissions is applied to designated fuels for the purposes of the NGER Scheme. [Schedule 1, Part 1, item 1, section 5, CE Act] [Schedule 1, Part 1, item 4, section 5, CE Act] [Schedule 1, Part 1, item 25, section 7, NGER Act] [Schedule 1, Part 1, item 32, section 7B, NGER Act] [Schedule 1, Part 1, item 33, section 7B(1), NGER Act] [Schedule 1, Part 1, item 34, section 7B(1), NGER Act] [Schedule 1, Part 1, item 35, section 7B(2), NGER Act] [Schedule 1, Part 1, item 36, section 7B(2), NGER Act] [Schedule 1, Part 1, item 37, section 7B(2), NGER Act] [Schedule 1, Part 1, item 38, section 7B(3)(c), NGER Act] [Schedule 1, Part 1, item 39, section 7B(4)(a), NGER Act] [Schedule 1, Part 1, item 40, section 7B(4)(c), NGER Act] [Schedule 1, Part 1, item 41, section 7B(5), NGER Act] [Schedule 1, Part 1, item 42, section 7B(5), NGER Act] [Schedule 1, Part 1, item 43, section 7C, NGER Act] [Schedule 1, Part 1, item 44, section 7C(1), NGER Act]

1.41 To ensure consistency across the legislation, section 7 of the NGER Act is amended to indicate that 'designated fuel' has the same meaning as in the CE Act and to include designated fuels in the definitions of 'potential greenhouse gas emissions' and 'carbon dioxide equivalence'. [Schedule 1, Part 1, item 2, section 5, CE Act] [Schedule 1, Part 1, item 3, section 5, CE Act] [Schedule 1, Part 1, item 24, section 7, NGER Act] [Schedule 1, Part 1, item 25, section 7, NGER Act] [Schedule 1, Part 1, item 29, section 7, NGER Act]

1.42 References to 'potential greenhouse gas emissions embodied in an amount of natural gas' are replaced with references to 'potential greenhouse gas emissions embodied in an amount of designated fuel' in sections 22A, 22AA and 24 of the NGER Act. This means that liable entities have reporting obligations for their use of designated fuels and the CER has obligations to publish certain information relating to designated fuels. [Schedule 1, Part 1, item 47, section 22A(1)(c), NGER Act] [Schedule 1, Part 1, item 48, section 22AA(1)(e), NGER Act] [Schedule 1, Part 1, item 51, section 24(1AA)(c), NGER Act]

1.43 To provide clarity to stakeholders, the terminology of liquefied petroleum gas has been revised to be consistent with nomenclature used by industry. [Schedule 1, Part 1, item 5, section 5, CE Act] [Schedule 1, Part 1, item 6, section 5, CE Act] [Schedule 1, Part 1, item 14, section 30(2)(b), CE Act] [Schedule 1, Part 1, item 16, section 35(7), CE Act] [Schedule 1, Part 1, item 17, section 58, CE Act] [Schedule 1, Part 1, item 18, section 58(1)(d), CE Act]

Nomination of operational control

1.44 For the purposes of liability under the carbon pricing mechanism and for reporting in the NGER Scheme, sections 11AA, 11AB, 11B and 11C of the NGER Act provide for the nomination of 'operational control' for facilities where two or more persons have equal authority over operational and environmental policies. In these cases, nominations are required to specify a person who has 'operational control' for the purposes of determining the entity with NGER obligations and/or a liability under the carbon pricing mechanism for a facility.

1.45 To streamline these requirements and, in particular, to remove the possibility that repeated nominations have to be made, the bill repeals sections 11AA,11AB, 11B and 11C of the NGER Act and includes new sections 11B and 11C.

1.46 New section 11B of the NGER Act applies in situations where two or more persons potentially have operational control of a facility. One of those persons can be nominated as the person with operational control of the facility if the facility passes the 'eligible nomination test'. A facility passes the test if, at a time after the start of the carbon pricing mechanism:

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two or more persons have authority to introduce and implement operating, health and safety and environmental policies; and

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it is not clear who has operational control of the facility because no particular person has the greatest authority to introduce and implement operating and environmental policies; and

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the CER has not declared that a person has operational control of the facility under section 55 or 55A of the NGER Act. [Schedule 1, Part 1, item 46, new section 11B(1), NGER Act]

1.47 If the facility passes the eligible nomination test, the persons who could be taken to have operational control of the facility can jointly nominate one of them to be the nominated person for a specified amount of time.

1.48 New section 11C applies where a trust with multiple trustees has operational control of a facility, and no declaration of operational control exists for the facility under section 55 or 55A of the NGER Act. The trustees can jointly nominate one of them to be the nominated trustee for a specified amount of time. [Schedule 1, Part 1, item 46, new section 11C, NGER Act]

1.49 Nomination of a person requires the nomination of a non-foreign person where possible. [Schedule 1, Part 1, item 46, new section 11B(4), NGER Act] [Schedule 1, Part 1, item 46, new section 11C(4), NGER Act] Section 7 of the NGER Act defines 'foreign person'.

1.50 A nomination must specify the start and end days of the nomination. [Schedule 1, Part 1, item 46, new section 11B(2), NGER Act] [Schedule 1, Part 1, item 46, new section 11C(2), NGER Act]

1.51 The nomination may be made before or after the start day. However, the start date of the nomination cannot be in a period for which a person's obligations under the NGER Act or carbon pricing mechanism have lapsed and it cannot be after the financial year next following the financial year that the nomination is made. There are no restrictions on the end day. This means a nomination can be in force for a longer time than under previous arrangements, removing the requirement to make a nomination at least once every financial year. [Schedule 1, Part 1, item 46, new sections 11B(6)-(9), NGER Act] [Schedule 1, Part 1, item 46, new sections 11C(6)-(9), NGER Act]

1.52 A nomination has no effect if, at the start day of the nomination, the facility does not pass the eligible nomination test or if the nominators are not the persons who have potential operational control. [Schedule 1, Part 1, item 46, new section 11B(5), NGER Act] [Schedule 1, Part 1, item 46, new section 11C(5), NGER Act]

1.53 If a nomination is in force, liability and emissions reporting responsibilities continue to apply in the same way as under existing sections 11B and 11C of the NGER Act. That is, where the facility is a facility of a joint venture, the nomination of operational control only relates to reporting obligations under the NGER Act. Liability is determined by the participating percentage determination. If the facility is not a facility of a joint venture, the nomination relates to both reporting obligations under the NGER Act and liability under the carbon pricing mechanism. [Schedule 1, Part 1, item 46, new sections 11B(15) and (16), NGER Act] [Schedule 1, Part 1, item 46, new section 11C(15), NGER Act]

1.54 The rules for liability and emissions reporting where there is no nomination in force are also unchanged, however, a person will no longer be liable for a civil penalty if that person fails to make a nomination by the due date. In these cases, where the facility is a facility of a joint venture, each relevant person or trustee is taken to have operational control for the purposes of reporting under the NGER Act, while liability under the carbon pricing mechanism is determined by the participating percentage determination. If the facility is not a facility of a joint venture, each relevant person or trustee is taken to have operational control for the purpose of reporting under the NGER Act, while liability under the carbon pricing mechanism is shared by the relevant persons/trustees. [Schedule 1, Part 1, item 46, new sections 11B(17)-(19), NGER Act] [Schedule 1, Part 1, item 46, new sections 11C(16) and (17), NGER Act]

1.55 The CER may cancel a nomination if:

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the nominated person does not have potential operational control of the facility; or

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the facility does not pass the eligible nomination test;

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the nominated person has become an externally administered body corporate or an insolvent under administration; or

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the nominated person has an unsatisfactory compliance record. [Schedule 1, Part 1, item 46, new section 11B(10), NGER Act] [Schedule 1, Part 1, item 46, new section 11C(10), NGER Act]

1.56 The effect of a nomination being cancelled is that no nomination would be in place for that facility, and sections 11B and 11C set out the consequences of no nomination being made, in terms of obligations to report and liability for emissions. A nomination of another of the persons who could be taken to have operational control of the facility could be made upon an earlier nomination being cancelled by the CER. Decisions made by the CER to cancel a nomination on the grounds that the nominee has an unsatisfactory compliance record would be reviewable under section 56 of the NGER Act. [Schedule 1, Part 1, item 58, new section 56(aaa) and (aab), NGER Act]

1.57 New section 11D contains a list of matters that constitute an unsatisfactory compliance record. Those matters may include acts or omissions by executive officers of a body corporate, such as where that officer breaches a provision of either the NGER Act or the CE Act. It is intended that even if that officer breached a civil penalty provision or committed an offence in another capacity before becoming an executive officer of the nominee, this would still constitute an unsatisfactory compliance record for the nominee. [Schedule 1, Part 1, item 46, new section 11D(1), NGER Act] Additional matters may be set out in the regulations so as to provide flexibility in responding to relevant compliance issues, across the range of reporting obligations, as they are experienced in the early years of the carbon pricing mechanism. These matters could, for example, include breaching a provision of climate change legislation other than the NGER Act or CE Act. Any future proposed additions to the list of what constitutes an unsatisfactory compliance record can be the subject of focused consultation with affected persons and would be disallowable by the Parliament. [Schedule 1, Part 1, item 46, new section 11D(1)(f)(ii), NGER Act] [Schedule 1, Part 1, item 46, new section 11D(1)(g)(ii), NGER Act]

1.58 Where a nomination has been made and the facility ceases to pass the eligible nomination test, the nominators have 30 days to notify the CER of the cessation, unless the cessation occurred because the CER declared a person to have operational control of the facility, or because the question of operational control is not relevant to the NGER Act or the CE Act. [Schedule 1, Part 1, item 46, new sections 11B(20)-(22), NGER Act] [Schedule 1, Part 1, item 57, section 30(2A), NGER Act]

1.59 A person who fails to notify such cessation is liable for a maximum civil penalty of 400 penalty units (currently $44,000), and each day that the CER is not notified can amount to a continuing contravention. This is a civil penalty provision because contravening it does not involve conduct of such serious moral culpability that criminal prosecution and sanctions are warranted. Further, as most persons are expected to be bodies corporate, the financial disincentives to misconduct provided by civil penalties are a more proportionate and effective enforcement tool, reflecting the practice of other areas of business regulation.

1.60 The level of this civil penalty reflects the seriousness of the contravention and represents a clear and strong disincentive for non-compliance. The integrity of the carbon pricing mechanism could be compromised by a failure to notify in a timely way.

1.61 Only one nomination may be in place at any given time. A new nomination has no effect unless it is expressed to replace the original nomination. When the new nomination starts, the original nomination is revoked. [Schedule 1, Part 1, item 46, new sections 11B(13)-(14), NGER Act] [Schedule 1, Part 1, item 46, new sections 11C(13)-(14), NGER Act] [Schedule 1, Part 1, item 57, section 30(2A), NGER Act]

Publication of energy consumption

1.62 Section 24 currently requires the CER to publish certain information on its website relating to scope 1 emissions, scope 2 emissions and energy consumption. In relation to energy consumption for a registered corporation's group, the CER is required to publish a total energy consumption figure as well as an adjusted energy consumption figure.

1.63 To avoid potential confusion by users of the published data, the Bill amends the publication requirements to require the CER to only publish an adjusted 'net energy consumption' figure for a corporate group. [Schedule 1, Part 1, item 49, section 24(1)(c), NGER Act] [Schedule 1, Part 1, item 55, section 24(1C), NGER Act] As a result, the total energy consumption figure reported under parts 3 or 3F will not be required to be published.

1.64 Similarly, the discretionary publication requirements relating to group members or business units are amended to only include the publication of 'net energy consumption' for each member of the corporation's group or each business unit. [Schedule 1, Part 1, item 50, section 24(1A)(c), NGER Act]

1.65 To promote consistency and comparability of published data, the publication requirements relating to data reported by reporting transfer certificate holders and liability transfer certificate holders are also amended by the Bill. The new provisions indicate that for these certificate holders, the CER is required to publish the 'net energy consumption' figure derived from the report submitted under the NGER Act. [Schedule 1, Part 1, item 52, sections 24(1AD)(a) and (b), NGER Act] [Schedule 1, Part 1, item 53, section 24(1AD)(c), NGER Act] [Schedule 1, Part 1, item 54, sections 24(1AD), NGER Act]

1.66 'Net energy consumption' for the purposes of publication is calculated based on an adjustment process to be set out in the regulations. [Schedule 1, Part 1, item 56, sections 24(7) and (8), NGER Act]

Application and transitional provisions

1.67 The provisions contained in Schedule 1 to the bill commence on the later of:

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the start of the day on which the bill receives the Royal Assent; and

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immediately after the commencement of Schedule 1, Part 2 to the Clean Energy (Consequential Amendments) Act 2011 on 1 July 2012. [Section 2]

1.68 The bill provides for transitional arrangements for determinations made under section 7B of the NGER Act that set out methods for determining the amount of potential greenhouse gas emissions embodied in a fuel. An existing determination does not need to be remade even though the head of power in the NGER Act under which the determination was made is being amended. [Schedule 1, Part 2, item 59]

Consequential amendments

Nomination of operational control

1.69 The bill amends the definition of 'provisional emissions number' in section 5 of the CE Act to indicate that its meaning is not affected by the repeal of sections 11AA and 11AB of the NGER Act. [Schedule 1, Part 1, item 7, section 5, CE Act]

1.70 The bill amends section 7 of the NGER Act to include definitions of 'externally-administered body corporate' and 'insolvent under administration'. This gives the terms the same meaning as those given in section 9 of the Corporations Act 2001 . The terms are used in sections 11B and 11C as grounds that allow the CER to cancel a nomination of operational control. [Schedule 1, Part 1, item 26, section 7, NGER Act] [Schedule 1, Part 1, item 27, section 7, NGER Act]

1.71 The bill amends the definition of 'operational control' in section 7 of the NGER Act to indicate that its meaning is not affected by sections 11AA and 11AB of the NGER Act, which have been repealed. [Schedule 1, Part 1, item 28, section 7, NGER Act]

1.72 The bill amends section 7 of the NGER Act to include a definition of 'unit shortfall charge'. This gives the term the same meaning as in section 5 of the CE Act. The term is used in new section 11D of the NGER Act that sets out the meaning of 'unsatisfactory compliance record'. [Schedule 1, Part 1, item 30, section 7, NGER Act]

1.73 The bill amends section 7 of the NGER Act to include a definition of 'unsatisfactory compliance record', which indicates that the term has the meaning given by new section 11D of the NGER Act. [Schedule 1, Part 1, item 31, section 7, NGER Act]

1.74 The bill amends section 11 of the NGER Act, which sets out the basic rule of operational control, so that it has effect subject to new sections 11B and 11C of the NGER Act, and not sections 11AA and 11AB, which have been repealed. [Schedule 1, Part 1, item 45, section 11, NGER Act]