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Exposure Draft Legislation for Carbon Pollution Scheme released
10 March 2009
What's new?
The Government has released the exposure draft legislation and explanatory materials for the Carbon Pollution Reduction Scheme (CPRS).
Building on the Green Paper and White Paper released last year, the exposure draft legislation sets out in legislation what is required of participants in the CPRS and the mechanics of the scheme.
The Government is seeking feedback from stakeholders on the terms of the draft legislation and its effectiveness in delivering the White Paper's policy positions.
The draft Carbon Pollution Reduction Scheme Bill 2009 details provisions relating to the emissions trading scheme. These include:
- entities and emissions that are covered by the scheme
- liable entities’ obligation to surrender emissions units corresponding to their emissions
- limits on the number of emissions units that will be issued
- the nature of Australian emissions units
- allocation of Australian emissions units
- assistance in relation to emissions-intensive trade-exposed activities and coal-fired electricity generators
- voluntary inclusion of reforestation activities under the Scheme
- the National Registry of Emissions Units, and
- monitoring and enforcement
The CPRS is a ‘cap and trade’ scheme. It involves setting a national scheme cap for a particular year and issuing units within that cap. The scheme cap for a particular year is a quantity of greenhouse gases that have a carbon dioxide equivalence of a specified number of tonnes.
Under the CPRS, the quantity of greenhouse gas emissions for which liable entities are responsible will be monitored, reported and audited. At the end of each year, each liable entity will need to surrender an eligible emissions unit for every tonne of greenhouse gas emissions that they are responsible for in that year.
Eligible emissions units include Australian emissions units issued by the Australian Climate Change Regulatory Authority and eligible international emissions units. The number of Australian emissions units issued by the Authority in each year will be limited by a scheme cap.
Liable entities will compete to purchase the number of units that they require, either at auctions arranged by the Authority or on the secondary trading market.
The Bills to enact the CPRS are expected to be introduced to Parliament by May/June 2009, with enactment in the third quarter of 2009.
To make a submission on the draft bills
Submissions are now open and close on 14 April 2009. Submissions can be emailed or posted to:
The CPRS Exposure Draft Team
Emissions Trading Division
Department of Climate Change
GPO Box 854
Canberra ACT 2601
Email: emissions.trading@climatechange.gov.au
ASX’s role
ASX has announced it will support and service the CPRS through the introduction of a new environmental product suite delivered via its existing contemporary trading, clearing, and settlement infrastructure.
ASX anticipates that it will be able to introduce a futures market for carbon pollution permits and fungible credits prior to the expected commencement of the CPRS in 2010.
ASX has announced it is in an advanced stage of finalising its product specifications and will announce launch dates for its Australian Emissions Unit (AEU) and Certified Emission Reduction (CER) futures and options products pending the introduction of relevant legislation supporting the CPRS. These products will complement ASX's Renewable Energy Certificate (REC), Electricity, Natural gas and Thermal coal futures and options.
How can Certainty help?
Certainty Compliance can answer your questions about the Carbon Pollution Reduction Scheme. Please contact a Consultant on (02) 9238 8091 or enquiries@certaintycompliance.com.au
For further information:
See the Exposure Draft Carbon Pollution Reduction Scheme Bill here
See the ASX Emission Trading section here