Insight - Energy & Resources
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energy & resources insight
august 2008
National greenhouse and energy reporting scheme – an update
In our June 2008 Energy & Resources Insight we focused on the new national greenhouse and energy reporting requirements which commenced on 1 July 2008 (Scheme). This edition focuses on:
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explaining the recently released National Greenhouse and Energy Reporting Regulations 2008 (Regulations) and supporting materials which provide information and detail on how to interpret the National Greenhouse and Energy Reporting Act 2007 (Act); and
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the National Greenhouse and Energy Reporting Amendment Bill 2008 which proposes changes to the Act.
Scheme document suite
The entirety of the Scheme now consists of the following:
Regulations
The Regulations were released on 26 June 2008. They provide substantial detail on the practical operation and relevant reporting obligations for corporations under the Scheme.
The principal parts of the Regulations set out in detail the technical definitions of emissions and energy to be reported under the Act and the registration requirements.
The balance of the Regulations expand on the requirements for registration, deregistration and the obligations of registered corporations. These obligations include general reporting requirements, the information which must be included in the report and specific rules for corporate reporting of emissions resulting from such industry sources as:
- coal mining
- oil and gas
- waste
- carbon capture and storage
- metal product
- chemical product
- commercial airconditioning
- mineral product
Overall control and operational control
It is crucial to determine who has overall control of an activity or operational control of a facility because these concepts are critical to determining the obligation to report under the Act.
The expression ‘operational control’ was introduced under the Act and is now mirrored in the Regulations in the term ‘overall control’.Overall control refers to control over an activity or a series of activities (including ancillary activities). Operational control refers to control over a facility.
If activities are occurring at a particular site but are a separate process (for example in the manufacture of steel, other activities such as iron pelleting/steel milling are involved), then all of the activities at the site will be considered to be a single facility if they are under the overall control of a corporation.
A single corporation will have overall control of an activity or a series of activities (including ancillary activities) if it has the authority to introduce and implement any or all of operating, health and safety and environmental policies. If more than one corporation has the authority to introduce and implement these policies, then the corporation with the greatest authority to introduce and implement operating and environmental (but not health and safety) policies will have overall control in relation to the activity or series of activities (including ancillary activities).
Emissions
The meaning of greenhouse gas emissions has been expanded in the Regulations to include both Scope 1 and Scope 2 emissions. Under the Scheme, it will be mandatory to report Scope 1 and Scope 2 emissions. Scope 1 emissions are the release of greenhouse gas in relation to a facility as a direct result of an activity or series of activities (including ancillary activities) that constitute the facility. Scope 2 emissions are the release of greenhouse gas in relation to a facility as a direct result of one or more activities that generate electricity, heating, cooling or steam that is consumed by the facility but that do not form part of the facility.
The technical detail
The technical information underpinning the Scheme is contained in the National Greenhouse and Energy Reporting Measurement Determination 2008 (Determination). The aim of the Determination is to minimise the reporting burden on corporations.
The Determination, whilst being technical, is important as it provides different methods for measuring emissions by reference to reportable industry-based data. The methods allow for both direct emissions monitoring and the estimation of emissions where direct monitoring is not possible.
Amendments to the Scheme
The Government has tabled the National Greenhouse and Energy Reporting Amendment Bill 2008 (Bill) which proposes changes to the Act.
The Bill includes the following changes:
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mandatory separate publication by the Greenhouse and Energy Data Officer (GEDO) of Scope 1 and Scope 2 emissions at the corporate group level;
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allowing the publication of information by the GEDO relating to the methodologies used by corporations to calculate their emissions;
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allowing the publication by GEDO of Scope 1 and Scope 2 emissions and calculation methodologies to be broken down to the level of members of a corporation’s group;
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increased flexibility for corporations to apply for registration in advance of meeting a threshold; and
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creating separate voluntary reporting and publication provisions for greenhouse gas offsets.
What now?
The Department of Climate Change has recommended that corporations begin recording their greenhouse gas emissions and energy production and consumption from 1 July 2008.
The accurate and comprehensive recording of this data will enable corporations to determine whether they meet the specified facility and/or corporate group thresholds and, accordingly, whether they need to register and report for the 2008 – 2009 financial year.
Correction
The table of reporting thresholds included in the June edition of our Energy & Resources Insight suggested a facility threshold of 125,000 tonnes of carbon dioxide equivalent per year. In fact, the facility threshold is 25,000 tonnes of carbon dioxide equivalent per year and it is no coincidence that this is generally the Government’s preferred threshold for obligations under the Carbon Pollution Reduction Scheme (CPRS) as published in the CPRS Green Paper released on 16 July 2008. More on the CPRS Green Paper in the next edition of our Energy & Resources Insight.