1 Introduction

This article reviews the status as at 1 July 2009 of legislation currently before the Federal Parliament which deals with issues related to climate change.

The legislation concerns:

a.the proposed Carbon Pollution Reduction Scheme (CPRS)

b.the National Greenhouse and Energy Reporting System (NGERS), and

c.the proposed expanded Renewable Energy Target (RET).

The article also reviews the status of delegated legislation made or proposed to be made pursuant to the primary legislation considered.

2 Carbon Pollution Reduction Scheme

2.1 Primary legislation

On 14 May 2009, the Federal Government introduced into the House of Representatives the following Bills connected with the proposed CPRS:

a. the Carbon Pollution Reduction Scheme Bill 2009

b. the Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009

c. the Carbon Pollution Reduction Scheme (Charges–Customs) Bill 2009

d. the Carbon Pollution Reduction Scheme (Charges–Excise) Bill 2009

e. the Carbon Pollution Reduction Scheme (Charges–General) Bill 2009

f. the Carbon Pollution Reduction Scheme (CPRS Fuel Credits) Bill 2009

g. the Carbon Pollution Reduction Scheme (CPRS Fuel Credits) (Consequential Amendments) Bill 2009, and

h. the Australian Climate Change Regulatory Authority Bill 2009.

On 28 May 2009, the Federal Government introduced into the House of Representatives the following further associated Bill:

i. the Carbon Pollution Reduction Scheme Amendment (Household Assistance) Bill 2009.

These Bills (together, the CPRS Bills) were passed by the House of Representatives (with certain government-moved amendments to some of the Bills) on 4 June 2009, and were introduced into the Senate on 15 June 2009. The Senate considered the CPRS Bills (without voting on them) on 22 and 23 June 2009 before the Senate was adjourned for the winter recess on 25 June 2009. The Senate may give further consideration to the CPRS Bills at its next session which is scheduled to commence on 11 August 2009.

2.2 Delegated legislation

On 19 June 2009, the Federal Government released an exposure draft of the Carbon Pollution Reduction Scheme Regulations 2009 (Draft CPRS Regulations).

The Draft CPRS Regulations deal incompletely with certain aspects of the emissions-intensive trade-exposed assistance program under Part 8 of the Carbon Pollution Reduction Scheme Bill 2009. Those aspects include the identification of eight emissions-intensive trade-exposed industries and their classification as either ‘highly emissions-intensive’ or ‘moderately emissions-intensive’ industries.

The Carbon Pollution Reduction Scheme Bill 2009 leaves many matters to be addressed by regulations, including the identification of those direct greenhouse-gas emissions which will attract liability under the CPRS (in effect, the identification of the covered sectors under the CPRS). These matters are not addressed in the Draft CPRS Regulations.

3 National greenhouse and energy reporting system

3.1 Primary legislation

The National Greenhouse and Energy Reporting Act 2007 (Cth) (NGER Act) was assented to on 28 September 2007. It has been amended by the National Greenhouse and Energy Reporting Amendment Act 2008 (Cth), which came fully into effect on 15 March 2009.

On 18 March 2009, the Federal Government introduced into the House of Representatives the National Greenhouse and Energy Amendment Bill 2009.

On 23 June 2009, the Federal Government proposed amendments to the Bill which would introduce the concept of a Reporting Transfer Certificate to allow the obligation to report on a facility to be transferred from the controlling corporation of the entity having operational control of the facility to a member of a different group having financial control of the facility. The Reporting Transfer Certificate mechanism would therefore be an analogue of the ‘Category B’ Liability Transfer Certificate mechanism proposed as part of the CPRS.

The Bill was still the subject of a Second Reading debate when the House adjourned for the winter recess on 25 June 2009. The House will resume on 11 August 2009.

The NGER Act is also proposed to be extensively amended by the Carbon Pollution Reduction Scheme (Consequential Amendments) Bill 2009 (see section 2 above in relation to the status of that Bill). Those amendments are contingent on the passing of the Carbon Pollution Reduction Scheme Bill 2009 and their commencement is tied to the commencement of various provisions of the CPRS.

3.2 Delegated legislation

The National Greenhouse and Energy Reporting Regulations 2008 came into effect on 1 July 2008. They were amended with effect from 15 March 2009 by the National Greenhouse and Energy Reporting Amendment Regulations 2009 (No 1).

The National Greenhouse and Energy Reporting (Measurement) Determination 2008 came into effect on 1 July 2008. It was amended with effect from 27 June 2009 by the National Greenhouse and Energy Reporting (Measurement) Amendment Determination 2009 (No 1).

4 Renewable Energy Target

The Mandatory Renewable Energy Target (MRET) was established by the Renewable Energy (Electricity) Act 2000 (Cth) and commenced operation on 1 April 2001. The MRET required liable parties to source an additional 9500 gigawatt-hours of electricity per year from renewable sources by 2010, and was due to extend until 2020.

On 17 June 2009, the Federal Government introduced into the House of Representatives the following Bills to create the expanded Renewable Energy Target (RET):

a. the Renewable Energy (Electricity) Amendment Bill 2009, and

b. the Renewable Energy (Electricity) (Charge) Amendment Bill 2009.

The effect of these Bills, if enacted, would be to:

c. extend the RET (as successor to the MRET) to 2030

d. require an additional 45,000 gigawatt-hours of electricity per year from renewable sources by 2020, and

e. increase the shortfall charge (for failure to source the required quantity of electricity from renewable sources) from $40 to $65 per megawatt-hour, with effect from 1 January 2010.

The Renewable Energy (Electricity) Amendment Bill 2009 contains provisions for a partial exemption from liability under the RET for activities identified as emissions-intensive trade-exposed activities. However, those provisions are linked to the commencement of the Carbon Pollution Reduction Scheme Bill 2009.

The Bills had not been debated when the House adjourned for the winter recess on 25 June 2009. The House will resume on 11 August 2009.