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Guidelines for completing a 2019 application for an exemption certificate for Emissions-Intensive Trade-Exposed (EITE) activities under the Renewable Energy Target Production calculation method
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Guidelines for completing a 2019 application for an
exemption certificate for Emissions-Intensive Trade-Exposed (EITE) activities under the Renewable
Energy Target
Production calculation method
Contents
Guidelines for completing a 2019 application for an exemption certificate for Emissions-Intensive Trade-Exposed activities under the Renewable Energy Target..........................................................................0
Production calculation method..........................................................................................................................0
Contents.........................................................................................................................................................1
Overview............................................................................................................................................................3
Exemption certificate application process..........................................................................................................3
General requirements....................................................................................................................................4
Protection of information collected...............................................................................................................4
Completing the exemption certificate application.............................................................................................5
Part A: Prescribed person...............................................................................................................................5
Scenario 1: An entity has a contract with the liable entity.........................................................................5
Scenario 2: Liable entity with operational control......................................................................................6
Scenario 3: Nominated person...................................................................................................................7
Part B: Applicant details.................................................................................................................................7
Part C: Liable entity........................................................................................................................................7
Part D: Emissions-intensive trade-exposed activity........................................................................................8
Part E: Site details.........................................................................................................................................10
Part F: Quantity of ‘relevant product’..........................................................................................................10
What is relevant product?........................................................................................................................10
Saleable quality........................................................................................................................................11
Is the site part of an activity group? If so, how much product and how much electricity should be attributed to each site?............................................................................................................................12
Calculating ASP.........................................................................................................................................14
Quantity of relevant product: SP2017-18.....................................................................................................15
Period for reporting quantity of relevant product....................................................................................15
Part G: Exemption calculation......................................................................................................................16
Supplementary information.............................................................................................................................17
Audit report..................................................................................................................................................17
Exemption certificate application deadlines and processing times..............................................................18
Information contained in the exemption certificate................................................................................18
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Amending an exemption certificate.............................................................................................................18
Change of liable entity (regulation 22ZP).................................................................................................18
Multiple liable entities (regulation 22ZQ).................................................................................................19
The EITE activity ceases at the site (regulation 22ZR)...............................................................................19
The exemption certificate is inaccurate (regulation 22ZS).......................................................................20
Transfer of exemption certificate to liable entity.........................................................................................20
How an exemption certificate reduces a liable entity’s Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES) liability................................................................................20
Auditing and compliance..............................................................................................................................21
Protected information..............................................................................................................................22
Publication of exemption certificate information.....................................................................................22
Contact us........................................................................................................................................................22
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Overview The Renewable Energy (Electricity) Act 2000 (the Act) 1 and the Renewable Energy (Electricity) Regulations 2001 (the Regulations) 2 include provisions for exemption from Renewable Energy Target (RET) liability for electricity used in certain emissions-intensive trade-exposed (EITE) activities. To obtain an exemption, prescribed persons may apply to the Clean Energy Regulator for an exemption certificate.
Note: This document should be read in conjunction with the Act and the Regulations in their current form at the time of reading. Changes to the legislation may affect the information in this document.
The information contained in this document is provided as guidance only. The guidelines are non-binding and are of a general nature only.
Applicants are responsible for determining their obligations under the law, and for applying the law to their individual circumstances. This document is not intended to be relied upon as, or be a substitute for legal advice. Accordingly, the Clean Energy Regulator is not responsible for any loss caused by any action taken or not taken on the basis of these guidelines. The Clean Energy Regulator suggests you seek your own legal advice if necessary, in relation to your application.
Exemption certificate application process 1. Download the production calculation method 2019 Application for an exemption certificate3 form from
the Clean Energy Regulator website. Complete the application form. The Clean Energy Regulator can assist you with your application, or you may seek your own advice.
2. Lodge the application form to the Clean Energy Regulator with supporting documentation.
By post
Post your completed application with any accompanying documentation to:
Clean Energy RegulatorIndustry Assistance SchemesGPO Box 621Canberra ACT 2601
By email
You can submit your completed application by email: [email protected].
Regardless of how you lodge your completed application, you should keep a copy of the signed form for your records. If posted the application must be received by the Clean Energy Regulator on or before the due date.
1 https://www.legislation.gov.au/Details/C2016C00624 2 https://www.legislation.gov.au/Details/F2016C00537 3 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
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Applications for the 2019 year (1 January to 31 December 2019) must be made on or before 1 April 2019. No extension of time can be given to lodge an exemption certificate application after the due date. Applications to amend an issued exemption certificate due to change of liable entity or addition of multiple liable entities must be made on or before 31 December 2019.
Note: This deadline has been calculated in light of the Acts Interpretation Act 1901 (Cth), which, among other things, applies where a deadline falls on a weekend or public holiday.
General requirements
Read the relevant area of the Renewable Energy (Electricity) Regulations 2001. References have been used throughout the form.
Email or post your completed and signed application using the 2019 form together with all supporting documents. Your response can be either typed or legibly hand written. Applications will not be accepted on a flash drive, computer disk or similar media.
Complete all applicable parts of the application form. If there is insufficient space to complete your response, please provide the response as an attachment.
Reference and label attachments in a logical manner. Lengthy or large attachments may be provided in electronic format. Ensure any attachments and copies of original documents are legible.
Keep a copy of the completed and signed application that is submitted for your records.
Do not alter the wording or the references in the application form in any way.
Do not use correction fluid or covering stickers.
Do not bind or staple your application.
The Clean Energy Regulator is responsible for implementing the legislation governing exemption certificates, but is not responsible for developing the legislation or policy, including which activities are EITE activities listed in the Regulations. The Department of the Environment and Energy is responsible for developing the policy and legislation. The Department of the Environment and Energy can be contacted by phone (1800 803 772) or through their online enquiries portal using the ‘contact us’ link on their home page4.
Protection of information collected
Under Part 3 of the Clean Energy Regulator Act 2011 strict secrecy provisions apply to the data and information collected by the Clean Energy Regulator. Breach of these provisions may result in imprisonment for those disclosing the information. The Clean Energy Regulator is also bound by the Privacy Act 1988 (Cth).
The Clean Energy Regulator Act 2011 provides for disclosure of collected data in certain circumstances. Furthermore, the Clean Energy Regulator is also required to publish certain information relating to exemption certificates. For more information, see below under ‘Publication of exemption certificate information’.The Clean Energy Regulator’s Privacy Policy contains information about the agency’s procedures for handling personal information including how a person can access their personal information held by the agency, how to seek correction of such information, and information about how
4 http://www.environment.gov.au/about-us/contact-us
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to complain about a breach of the Australian Privacy Principles. The Clean Energy Regulator’s Privacy Policy can be found on the Clean Energy R e gul a tor w e bsit e 5.
Completing the exemption certificate applicationThe below information provides guidance for completing each part of the exemption certificate application.
Note: References to legislative provisions in this guide are to the Renewable Energy (Electricity) Regulations 2001 unless specified otherwise.
Part A: Prescribed person
An application for an exemption certificate must be made by a prescribed person, who will receive the exemption certificate (this will generally be the entity carrying out the EITE activity).
Regulations 22G – 22K set out categories of prescribed person eligible to apply for an exemption certificate. You must be in one of these categories to apply. Refer to the ‘amending an exemption certificate’ section for prescribed person categories set out in Regulation 22L and 22M.
Note: You are not a prescribed person under Regulations 22G, 22H, 22I, 22J or 22K if another valid application has already been received for the 2019 year in relation to the EITE activity and site.
Scenario 1: An entity has a contract with the liable entity
During the 2019 year, you (the prescribed person) have a contract with the liable entity (e.g. your electricity retailer) for electricity supply to the site at which the EITE activity is carried out. This may be:
an existing contract—the prescribed person is the person with a contract for supply of electricity to site for part or all of 2018 (regulation 22G), or
a new contract—the prescribed person is the person with a new contract for supply of electricity (and there is no other prescribed person with an existing contract and operational control of the facility and does not relate to a future activity) (regulation 22J).
For example: You have an existing contract to purchase electricity from an electricity retailer for use in the EITE activity of smelting zinc from 2017 to 2021 (regulation 22G).
Scenario 2: Liable entity with operational control
During the 2019 year, you have operational control of the principal facility at the site of the EITE activity and are also a liable entity for a substantial portion (at least 30%) of the electricity consumed at the site.
Operational control is defined with reference to the National Greenhouse and Energy Reporting Act 2007 (NGER Act) and generally means you have the most authority over operating, health and safety and environmental policies for the facility. For more information about operational control, review the NGER legislation or guidance on the Clean Energy Regulator website6.
5 http://www.cleanenergyregulator.gov.au/About/Policies-and-publications/Condensed-privacy-policy/Full-privacy-policy 6 http://www.cleanenergyregulator.gov.au/NGER/About-the-National-Greenhouse-and-Energy-Reporting-scheme
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You are generally a liable entity if you make wholesale acquisitions of electricity. For more information about liable entities7 visit the Clean Energy Regulator website.
A ‘facility’, for the purpose of the Regulations, is as defined in section 9 of the NGER Act. Generally speaking, it is an activity (or series of activities) that involve greenhouse gas emissions, the production of energy or the consumption of energy, and that form a single undertaking or enterprise. For more information about what constitutes a facility, see section 9 of the NGER Act or guidance on the Clean Energy Regulator website8.
For an EITE activity currently carried out at a site, the prescribed person falls under regulation 22H if:
the person has operational control of the site in 2019 immediately before the application is made
the facility is the principal facility that is carried on at the site, and
the person is the liable entity during the six months prior to lodgement of the application for over 30 per cent of the electricity consumed at the site, or the majority of the electricity consumed at the site that gives rise to a relevant acquisition (as defined under section 31 of the Act. Generally speaking, a relevant acquisition is a wholesale or a notional wholesale acquisition of electricity).
For an EITE activity which is not yet, but will be carried out at a site later in the 2019 year, the prescribed person falls under regulation 22I if:
the prescribed person will have operational control of the facility, and
the person is the liable entity for more than 30 per cent of the electricity consumed at the site during 2019.
There is no current application for an exemption certificate or existing exemption certificate for the activity, site and year.
Describe how you meet the criteria of a liable entity with operational control, including, in particular, supporting evidence of operational control and that you meet the criteria of a liable entity.
For example: You conduct the EITE activity of smelting zinc, have operational control of the principal facility at the site, and you also purchase wholesale electricity for use in the EITE activity. Operational control may be demonstrated through having sole control over the operating, health and safety, and environmental policies at the site.
Scenario 3: Nominated person
If you are a ‘controlling person’ in relation to the principal facility at the site at which the EITE activity is carried out, a prescribed person can nominate you to apply for the exemption certificate. In this case:
a controlling person is defined in subregulation 22K(3) and generally means a person with operational or financial control of the facility or a controlling corporation that has a member of its group with operational control of the facility.
the nominated person becomes the prescribed person (regulation 22K), and
Written notice of the nomination must be given to the Clean Energy Regulator before your application is lodged, and there must not be an application already before the Clean Energy Regulator, and no exemption certificate already issued for the EITE activity, site and year.
7 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Renewable-Energy-Target-liable-entities/About-liability 8 http://www.cleanenergyregulator.gov.au/NGER/About-the-National-Greenhouse-and-Energy-Reporting-scheme
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For example: You operate a zinc smelter, but an intermediary person has a contract with the liable entity for the supply of electricity to the zinc smelter. The intermediary (as a prescribed person) nominates you to apply for the exemption certificate.
Part B: Applicant details
Complete the details of the applicant (the applicant must be the legal entity that is the prescribed person as described in Part A).
In Part B you must provide the company name (the legal entity name as registered on the Australian Business Register) and trading name/s, if applicable, to enable the Clean Energy Regulator to accurately identify the company in different circumstances.
Nominate the primary contact person - this should be the person who is most knowledgeable about the application and relevant legislation. This person will be the main point of contact for the Clean Energy Regulator when seeking additional information or clarification regarding the application.
A secondary contact person must also be nominated - this person should also have knowledge of the application and relevant legislation. This person may be contacted if the primary contact is unavailable.
Part C: Liable entity
Complete the details of the liable entity for the electricity consumed at the site (generally this will be your electricity retailer) and provide any required supporting documentation.
You may need to contact the liable entity for assistance in completing these questions.
If, on 1 January 2019, there were multiple liable entities for the electricity consumed at the site at the start of the year, you will need to provide details of:
any other liable entities and indicate whether you are intending to apply for another exemption certificate in respect of a concurrent liable entity (under paragraph 22M(b)(i)), or under paragraph 22M(b)(ii) of the Regulations).
If so, once you have been issued with the first exemption certificate, you can then apply for an exemption certificate in respect of another liable entity using the '2019 Application for Exemption Certificate - multiple liable entities ’ 9 form available on the Clean Energy Regulator website. Applications for multiple liable entities must be made on or before 1 July 2019 (for applications in regards to paragraph 22M(b)(i)), or on or before 31 December 2019 (for applications in regards to paragraph 22M(b)(ii)).
If the liable entity for the electricity consumed at the site changes during the 2019 year, once you have been issued with the first issued exemption certificate, you can then apply for an exemption certificate in respect to the second liable entity using the '2019 Application for Exemption Certificate - change of liable entity ’ 10 form available on the Clean Energy Regulator website. Applications for change of liable entity must be made on or before 31 December 2019. Similarly, if additional liable entities start supplying electricity for the site, then you can then apply for a second or subsequent exemption certificate for the additional liable entity or entities using the '2019 Application for Exemption Certificate - change of liable entity form’ 11.
9 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry 10 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry 11 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
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Note that the deadlines set out in this section relate to multiple liable entities and change of liable entities only. For deadlines relating to applications for exemption certificates generally, see Exemption certificate application process above.
Part D: Emissions-intensive trade-exposed activity
It is the responsibility of the prescribed person to identify whether an EITE activity is carried out at a site. Refer to the activities specified in Schedule 6 of the Regulations to determine whether your activity is an eligible EITE activity.
For each EITE activity, Schedule 6 also sets out:
the classification of activity in terms of whether it is highly or moderately emissions-intensive, and
the electricity baseline for activity—this is the amount of electricity prescribed as being used in the activity per unit of relevant product.
Instead of directly measuring electricity actually consumed in the EITE activity, measure relevant product quantity and use the electricity baseline to calculate electricity consumption to determine the amount of exemption.
Example: Production of carbon black
The electricity baseline for this EITE activity is 0.514MWh / tonne carbon black.
If 100,000 tonnes of carbon black of saleable quality is produced at a site in a year, the calculated electricity consumption in the EITE activity is: [0.514MWh/tonne x 100,000 tonnes /
year] = 51,400MWh / year
An application can only relate to one EITE activity. If multiple EITE activities are carried out at the same site:
nominate which EITE activity this application relates to, and
lodge a separate exemption certificate application for each of the other EITE activities, if required.
Explain how the EITE activity will be carried out at the site in 2019, by briefly describing how the specific processes conducted at the site constitute the activity specified in Schedule 6 of the Regulations. If not previously provided attach process diagrams and other relevant supporting material.
Example: Aluminium smelting
Describe how the EITE activity you conduct at the site uses the Hall-Héroult process to transform alumina into saleable aluminium metal.
Also explain how any requirements under Schedule 6 relating to the conduct of the EITE activity will be met for the 2019 year.
Example: Smelting zinc
The EITE activity definition requires zinc output of 99.95 per cent or higher purity.
Explain how the smelting process you conduct at the site is capable of meeting this purity
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requirement.
If the EITE activity has not yet commenced at the site, but is due to commence in 2019, you must state:
what approvals are necessary for the conduct of the EITE activity (e.g. Australian Government Environment Protection and Biodiversity Conservation (EPBC) approval, state government environmental approval and/or license, state government planning/construction approval, etc.), and
whether these approvals have been obtained at the time of making the application.
Part E: Site details
The site is the geographical location at which the EITE activity is carried out. The site must be located in Australia to be eligible for an exemption certificate.
An application can only relate to one site.
If the EITE activity is carried out at multiple sites, separate applications must be lodged for each site.
If the processes which constitute a single EITE activity occur across multiple sites, applications must be lodged separately for each site and the amount of relevant product reported in accordance with the concept of an activity group (see Part F for further details).
Provide details of the site to which the application relates, including the site name (the name commonly referred to for business purposes) and the site location.
Part F: Quantity of ‘relevant product’
What is relevant product?
Relevant product is the product (or input) described in Division 3 of the Part relating to the applicable EITE activity in Schedule 6 of the Regulations.
Example: Production of methanol
Division 3 – Electricity baseline for calculating exemption
Clause 610 Electricity baseline for product
The electricity baseline for calculating the amount of a liable entity’s exemption in respect of the production of methanol is 0.490 MWh per tonne of 100% equivalent methanol (CH3OH) that is produced by carrying on the emissions-intensive trade-exposed activity.
The relevant product is 100 per cent equivalent methanol (CH3OH) that is produced by carrying out the EITE activity (i.e. methanol produced by some other means than that set out in Division 1 of the relevant Part is not counted as relevant product).
Some EITE activities can produce more than one type of relevant product. In this case you will need to complete ‘Appendix D: Quantity of relevant product’ in relation to each additional type of relevant product that is produced from the EITE activity at the site. Appendix D is available on the Clean Energy Regulator website12.
12 http://www.cleanenergyregulator.gov.au/RET/Forms-and-resources/Forms-and-resources-for-industry
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In some cases EITE activities produce multiple outputs, however exemption amount is determined by measuring one output only. This is done to simplify reporting and calculations. For example, the EITE activity ‘rendering of animal by-products’ produces two outputs - animal protein meal and tallow, however only animal protein meal is measured to calculate production amount. This is because the activity baseline already takes into account both outputs.
Be sure to read the activity definition and baseline in the regulations carefully before submitting your application. If you are unclear on the activity definition or baseline please seek additional advice.
Example: Production of magnesia as specified in Part 12 of Schedule 6
This EITE activity may produce one or more of three relevant products specified in clause 632:
Caustic calcined magnesia.
Deadburned magnesia.
Electrofused magnesia.
Complete Part F for one of these relevant products and complete Appendix D for each of the other relevant products produced from the EITE activity at the site.
Saleable quality
A requirement for most (but not all) relevant products is that the relevant product is of saleable quality.
Saleable quality is defined in regulation 22C, and is generally taken to have its ordinary meaning in the respective market, providing it:
has commercial value as the output of an EITE activity process
does not include sub-standard product that was discarded
does not include product that was subsequently recycled back into the EITE activity to produce a new output, or
does not include product that was scrapped or lost before packaging.
You need to explain the basis on which quantity of relevant product SP2017-18 was determined, including how it was identified to comply with any material properties or specifications identified in the relevant activity definition under Division 3 of the relevant Part of Schedule 6 of the Regulations.
You will also need to address, how you determine how much of your overall production (or input) is relevant product. For example, this may involve:
identifying and deducting some quantity that does not meet the requirements of the EITE activity definition
identifying and deducting some quantity that is not of saleable quality
converting to dry weight basis (if applicable), or
converting to 100 per cent equivalent basis (if applicable).
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Example: Production of methanol
150,000 tonnes of methanol is produced at the site in the nominated financial year. However, this total includes 50,000 tonnes of imported methanol which is blended in at an earlier stage of the production process.
As it is a requirement that the methanol must be a product of the EITE activity at the site, the amount of relevant product was calculated as:
150,000 tonnes - 50,000 tonnes = 100,000 tonnes.
Describe the method of measuring the quantity of relevant product SP2017-18, including the following information as applicable.
What type of measurement apparatus is used?
At what point in the production process did measurement take place?
What is the frequency and accuracy of the measurement method?
How is the relevant product typically measured by the industry (are there any accredited industry test methods)?
Are there any measurement requirements imposed by the National Measurement Act 1960?
All relevant documents will need to be attached to your application to support the method of measurement.
To assist the Clean Energy Regulator with verifying the quantity of relevant product and planning for future year applications, you will need to:
state the annual capacity (nameplate or estimated maximum) of relevant product for the site, and
detail any planned changes to the site which may have a material (e.g. greater than or equal to ±10% per cent variation) effect on future quantities of relevant product.
Is the site part of an activity group? If so, how much product and how much electricity should be attributed to each site?
Where the production processes which constitute a single EITE activity occur across two or more different sites (with an intermediate product transferred between the sites as part of the same production process13), the sites may constitute an activity group as defined in subregulation 22A(9). Separate applications are still required for each site with an additional attachment for the activity group.
Example: Production of high purity ethanol
A site transforms fermentable sugars into low purity ethanol (an intermediate product).
The low purity ethanol is transferred to a different site where it undergoes further purification to produce high purity ethanol (the relevant product).
The two sites constitute an activity group.
If the EITE activity at the site is part of an activity group, then Appendix A needs to be completed, in addition to the standard application form.
13 Or, for the activity of petroleum refining, the products produced from relevant products are transferred between the sites in order to conduct any of the processes listed in paragraphs 662(1)(a) to (d) of Schedule 6 (see regulation 22A(9))
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For a site which is part of an activity group, the amount of relevant product referable to the site must be calculated using the method of paragraph 22B(2)(b) of the Regulations. Note that this methodology applies to all relevant products produced from the activity group, even if some relevant products are wholly produced at only one site in the activity group.
This method apportions the total relevant product for all sites in the activity group between each of the sites in the activity group:
PT× ESET
Where:
PT = total relevant product from all sites in the activity group
ES = estimated electricity consumption at the site to which the application relates14
ET = sum of estimated electricity consumption for all sites in the activity group15
For each applicable site in the activity group, estimate electricity consumption based on the ratio:
EITEactivity electricity consumptiontotal siteelectricity consumption
If the amount of electricity consumed in the EITE activity represents 80 per cent or more of the total electricity consumed at the site, then your estimate of the total electricity consumed at the site should be used rather than applying a ratio.
Otherwise, provide an estimate of only the electricity consumed in the EITE activity, and divide by the total amount of electricity consumed at the site to obtain the ratio.
For example: An activity group (of three sites) has a total of 184,000 tonnes of relevant product. The amount of relevant product attributable to each site is determined as follows in the table below. Note in the table below the value of ET is the sum of ES for each of the three sites (A, B and C).
Site % of site electricity used in EITE activity
Amount of site electricity (MWh)
ES (MWh) PT x [ ES / ET ] (tonnes)
Site A 50% 128,000 64,000 184,000 x [64,000 / 156,000] = 75,487.2
Site B 90% 16 42,000 42,000 184,000 x [42,000 / 156,000] = 49,538.4
Site C 20% 250,000 50,000 184,000 x [50,000 / 156,000] = 58,974.4
Sub-total - - 156,000 -
14 Any sites where the EITE activity is only carried out in an ancillary way should be discounted from this calculation.15 Any sites where the EITE activity is only carried out in an ancillary way should be discounted from this calculation.16 Note that because the percentage of electricity used at the site for the EITE activity is over 80%, the entire amount of electricity consumed at the site is used.
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Calculating ASP
ASP is the amount or volume of relevant product produced by the EITE activity. The quantity of ASP (on which the amount of exemption is based) has three components, and is worked out using the following formula:
ASP2019 = SP2017-18 + EASP2018-19 + ST2018-19
Where:
SP2017-18 is the quantity of relevant product for the 2017-18 financial year.
EASP2018-19 is the quantity of new or expected additional production, if any, within the meaning of regulation 22ZD(1) for the 2018-19 financial year. If applicable, please complete Appendix B or C in conjunction with calculating this quantity.
ST2018-2019 is the adjustment for the previous financial year’s production, calculated as: (Amount of relevant product for 2017-2018 financial year) - (Amount of relevant product for 2016-2017 financial year) - (Amount of expected production of relevant product for 2017-2018 financial year).
If no exemption certificate was issued for the EITE activity and the site in 2018, then ST2018-19 is zero (in accordance with regulation 22ZB(4)(b)).
Quantity of relevant product: SP2017-18
You must report the quantity (mass or volume) of relevant product produced (or used) at the site in the 2017-18 financial year.
You should be able to provide an accurate value or reasonable estimate based on site data.
You need to provide supporting evidence such as site production (or inventory) database records, or production quantities submitted under other statutory reporting requirements.
The quantity of relevant product must be referable to the site:
it must be produced from (or used in) the EITE activity carried out at the site specified in the application, or
if the site is part of an activity group, it is not a site where the activity is carried out in an ancillary way, and the quantity of relevant product is determined in accordance with the method of regulation 22B (described under Part F of these Guidelines).
Either way, only one site can be nominated in respect of a quantity of relevant product (such that exemption is not allocated for the same quantity of relevant product more than once).
Period for reporting quantity of relevant product
You must report the quantity of relevant product for the previous financial year.
Example: In the 2019 exemption certificate application you must report the quantity of relevant product for the 2017–18 financial year.
A true-up mechanism in the exemption calculation (factor ST) adjusts for any discrepancy between the quantity of relevant product reported for the previous financial year, and the actual quantity of relevant product in the applicable financial years.
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Example: For the 2019 application year, you report 60,000 tonnes of relevant product for the 2017–18 financial year
However, the quantity of relevant product in the 2016–17 financial year (which is the basis for the exemption provided for 2017) is actually 50,000 tonnes.
As such, the quantity of relevant product in the 2019 application will be reduced by 10,000 tonnes to account for the higher-than-actual quantity of relevant product reported for 2018.
Part G: Exemption calculation
The amount of exemption relates to the calculated amount of liable electricity used in the EITE activity at the site in the year, multiplied by the applicable exemption assistance rate.
Please calculate the expected MWh amount of exemption using the method set out in regulation 22Z:
PE = EP x ASP x k x G
Where:
PE = Amount of exemption measured in megawatt hours/MWh
EP = Electricity baseline (from Division 3 of the relevant Part of Schedule 6 of the Regulations for the applicable activity)
ASP = Quantity of relevant product (as reported in Part F of application)
k = Exemption assistance rate of 100 per cent
G = Liable percentage (%) (as determined in Part E of application)
G is determined using the formula set out in regulation 22ZE, being: (A-B)/A (where A = total electricity consumption at the site for the 2017-2018 financial year, and B = the sum of (electricity generated and consumed at the site for which there is no relevant acquisition) + (electricity delivered to the site for which no relevant acquisition occurs between point of generation and point of use)).
That is: exemption = [electricity baseline] x [relevant product] x [exemption %] x [liable %]
Example: Production of high purity ethanol (for 2019)
Electricity baseline = 0.168MWh/kL of relevant product (from schedule 6)
Relevant product = 100,000kL
Exemption % = 100%
Liable % = 100% (assume all electricity used in the activity is liable)
Exemption = [0.168] x [100,000] x [100%] x [100%] = 16,800 MWh
If more than one type of relevant product is produced at the site, you will need to add all individual calculations to obtain the total exemption. The total is rounded down to the nearest MWh.
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Example: Production of magnesia (for 2019)
Caustic calcined magnesia
Deadburned magnesia Electrofused magnesia
Electricity baseline (MWh/t) (EP)
0.0757 0.202 2.45
Relevant product (t) (ASP)
100,000 200,000 100,000
exemption % (k) 100% (highly emissions-intensive activity)
Liable % (G) 100% (assume all electricity used in the activity is liable)
PEcaustic calcined magnesia = [0.0757] x [100,000] x [100%] x [100%] = 7,570 MWh
PEdeadburned magnesia = [0.202] x [200,000] x [100%] x [100%] = 40,400 MWh
PEelectrofused magnesia = [2.45] x [100,000] x [100%] x [100%] = 245,000 MWh
Exemption = PEcaustic calcined magnesia + PEdeadburned magnesia + PEelectrofused magnesia
= 7,570 + 40,400 + 245,000 = 292,970 MWh
When stating the amount of the exemption that should be set out in the exemption certificate and how that amount should be calculated, you must also state any assumptions made about values or amounts not known at the time of the application.
Supplementary information
Audit report
An exemption certificate application must be accompanied by an audit report where:
the application is made by a prescribed person under regulations 22G, 22H, 22I, 22J or 22K of the Regulations, and
the amount of exemption (in MWh) applied for exceeds 15,000MWh for the application year.
The audit report must comply with the requirements set out in regulation 22UB.
For more information on what is required in the audit report see the Audit determination handbook17 on the Clean Energy Regulator website.
17 http://www.cleanenergyregulator.gov.au/Infohub/Audits/forms-and-resources/audit-determination-handbook
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Exemption certificate application deadlines and processing times
Processing times for exemption certificate applications are outlined in regulation 22ZL.
All applicants must lodge 2019 exemption certificate applications to the Clean Energy Regulator on or before 1 April 2019. No extension of time can be given to lodge an exemption certificate application after the due date.
The Clean Energy Regulator must issue an exemption certificate within 60 days after receipt of the exemption certificate application. If the Clean Energy Regulator requests further information about the application, then the Clean Energy Regulator must issue an exemption certificate 60 days after receipt of the further information.
Information contained in the exemption certificate
The following information will be contained in the exemption certificate:
unique exemption certificate identification number as determined by the Clean Energy Regulator
name of the prescribed person
name of the liable entity to whom the exemption certificate relates
site and EITE activity to which the exemption certificate relates
year to which the exemption certificate relates
date of issue of the exemption certificate
amount of exemption in MWh
amount of relevant product, as used in determining the amount of exemption
percentage of electricity constituting a relevant acquisition, as used in determining the amount of exemption, and
details of amendments made to the exemption certificate (if any).
Amending an exemption certificate
The Clean Energy Regulator may amend an exemption certificate upon request in writing by the prescribed person (under subsection 46C(1) of the Act), with consideration to the matters outlined in regulation 22ZN.
The Clean Energy Regulator may also amend an exemption certificate for 2019 on its own initiative (under subsection 46C(3) of the Act) in the following circumstances:
Change of liable entity (regulation 22ZP)
A prescribed person who has been issued with an exemption certificate may apply for another exemption certificate under regulation 22L if the liable entity for the site changes during the 2019 year.
If this occurs, then:
the Clean Energy Regulator will issue the prescribed person with a second exemption certificate providing a pro-rata amount of exemption (based on the number of days of liability in the year) to the second liable entity, and
the Clean Energy Regulator will then amend the first exemption certificate, reducing its amount of exemption by the amount in the second exemption certificate.
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Furthermore, if the liable entity for the site changes again during the 2019 year, the prescribed person may apply for a third exemption certificate in relation to the third liable entity (on or before 31 December 2019).
Note: Change of liable entity applications for the 2019 year must be made on or before 31 December 2019.
Multiple liable entities (regulation 22ZQ)
A prescribed person who has been issued with an exemption certificate may apply for another exemption certificate under regulation 22M if there were multiple liable entities for the electricity consumed at the site during the 2019 year.
As a result:
the Clean Energy Regulator will issue the prescribed person with a second exemption certificate providing pro-rata amount of exemption (based on total expected relevant acquisitions in the year) to the second liable entity, and
the Clean Energy Regulator will then amend the first exemption certificate reducing the amount of exemption by the amount in the second exemption certificate.
Note: Applications must be made on or before 1 July 2019 for applications in regards to paragraph 22M(b)(i) of the Regulations, or must be made before 31 December 2019 for applications in regards to paragraph 22M(b)(ii) of the Regulations.
Please note that this deadline has been calculated in light of the Acts Interpretation Act 1901, which, among other things, applies where a deadline falls on a public holiday or a weekend.
The EITE activity ceases at the site (regulation 22ZR)
An exemption certificate may be amended if during the 2019 year the Clean Energy Regulator becomes satisfied that the EITE activity has not been conducted for at least 3 months (‘the ceased activity period’) and it is unlikely the EITE activity will be conducted again for at least 9 months after the end of the ceased activity period.
The exemption certificate is inaccurate (regulation 22ZS)
An exemption certificate may be amended if during the 2019 year the Clean Energy Regulator becomes aware that the exemption certificate is inaccurate.
Transfer of exemption certificate to liable entity
The prescribed person may provide a copy of the exemption certificate to the named liable entity, who may use it to reduce their relevant acquisitions for the applicable year.
The transfer of an exemption certificate is a matter between the prescribed person and the liable entity, and the Clean Energy Regulator does not have any role in overseeing this transaction. You should discuss timelines and other aspects of the negotiation with the liable entity.
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Note: Only the named liable entity can use the exemption certificate for exemption from liability.
How an exemption certificate reduces a liable entity’s Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES) liability
A liable entity must submit their exemption certificate with their Energy Acquisition Statement (EAS) for the applicable year (the EAS for a year is due by 14 February of the following year) to reduce their relevant acquisitions for the year by the amount stated on the exemption certificate.
The amount of exemption provided by a single exemption certificate can be used to reduce both the Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES) liabilities of the named liable entity.
LRET liability = [total relevant acquisitions (MWh) - exemption (MWh)] x RPP
LRET liability is effectively reduced by [exemption (MWh) x RPP]
SRES liability = [total relevant acquisitions (MWh) - exemption (MWh)] x STP
SRES liability is effectively reduced by [exemption (MWh) x STP]
Where:
RPP = Renewable Power Percentage
STP = Small-scale technology percentage
The renewable power percentage for a year is required to be specified in the Regulations before 31 March in each year.
If the renewable power percentage is not specified for a year by 31 March, a default formula will apply as set out in section 39(2) of the Act.
More information on the RPP and STP is available on the Clean Energy Regulator’s website18
For example: In the 2019 year, if the RPP is 13 per cent and if the STP is 10 per cent, and a RET liable entity has total relevant acquisitions of 100,000MWh and an exemption certificate which provides 20,000MWh of exemption.
RET liability without the exemption certificate
LRET = 100,000MWh x 13% = 13,000 LGCs
SRES = 100,000MWh x 10% = 10,000 STCs
Liability with the exemption certificate
LRET = [100,000 - 20,000] MWh x 13% = 10,400 LGCs
18 http://www.cleanenergyregulator.gov.au/RET/About-the-Renewable-Energy-Target/The-certificate-market/The-renewable-power-percentage
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SRES = [100,000 - 20,000] MWh x 10% = 8,000 STCs
The exemption certificate reduces liability by
20,000MWh x 13% = 2,600 LGCs
20,000MWh x 10% = 2,000 STCs
These examples provide a guide only. Liable entities are required to surrender Small-scale Technology Certificates on a quarterly basis and the calculations determining quarterly surrender requirements are complex. For more information about determining liability under SRES19 visit the Clean Energy Regulator website.
Auditing and compliance
The Clean Energy Regulator may audit the information provided in the exemption certificate application (including relevant product data, details relating to the conduct of the EITE activity, and liable/non-liable electricity consumption).
The Act provides the Clean Energy Regulator with the authority to, amongst other things, search premises and seek information to assess compliance with the Act.
Possible outcomes of an audit may include amendments to the exemption certificate or penalties under the Act.
Protected information
The Clean Energy Regulator is bound by the secrecy provisions of Part 3 of the Clean Energy Regulator Act 2011 (Clean Energy Act) for the information it collects in relation to this application and also by the Privacy Act 1988 in regard to personal information it collects.
Publication of exemption certificate information
Under section 38C of the Act and regulation 22E, the Clean Energy Regulator is required to publish the following information in relation to exemptions:
the name of each person to whom an exemption certificate is issued and the EITE activity set out in the exemption certificate (must be published within 14 days after the exemption certificate is issued)20
the name of each liable entity that receives an exemption for a year, the estimated value in dollars of the amount of exemption, and the name of each of the EITE activities set out in the exemption certificates to which the exemption relates (must be published by 1 October of each year)21, and
19 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Renewable-Energy-Target-liable-entities/Calculating-certificate-liability20 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Issued-partial-exemption-certificates 21 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Reported-exemptions
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the total amount of exemptions given for each EITE activity for a year (must be published by 30 March in the following year)22.
Contact usIf you require assistance or have any questions regarding this application process, please contact the Clean Energy Regulator general enquiries line on 1300 553 542 or email:
22 http://www.cleanenergyregulator.gov.au/RET/Scheme-participants-and-industry/Industry-assistance/Industry-assistance-published-information/Reported-exemptions
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