Climate Change Regulation in Australia: Opt-in Scheme for Liquid Fuels

What’s Happened?

The Clean Energy Act 2011 (Cth) contemplates the creation of an ‘Opt-in Scheme’ for liquid fuels.

Regulations for the Opt-in Scheme came into effect on 10 December 2012. The Scheme will operate from 1 July 2013 onwards.

The Scheme will allow a person to apply to the Clean Energy Regulator to be declared a designated opt-in person in relation to amounts of liquid fuels.

A person so declared is a liable entity in relation to those amounts, and takes on that liability instead of paying an equivalent carbon price under fuel tax and excise legislation.

Who needs to know?

Anyone who is a large user of liquid fuel – or who is a member of a GST group, or a participant in a GST joint venture, which is a large user of liquid fuel – should consider using the Opt-in Scheme.

Lodgement Deadline?

Applications for designation in financial year 2013-2014 need to be lodged with the Regulator on or before 31 March 2013.

Implications

Use of the Opt-in Scheme may yield cash-flow benefits. Under the Scheme, carbon liability only needs to be paid periodically: in ‘flexible charge’ financial years, by the end of the following February; and in ‘fixed charged’ financial years, 75% by the end of June and the remainder by the following February. Outside the Scheme, carbon liability is ‘inbuilt’ under the fuel tax and excise legislation.

Use of the Opt-in Scheme may also yield lower compliance costs by providing the opportunity to acquit liability using potentially lower priced emissions units (such as carbon credit units generated under the Carbon Credits (Carbon Farming Initiative) Act 2011 (Cth), and eligible international emissions units).

The Scheme may be of particular benefit to the mining industry.

This article was written by John Taberner, Consultant, Sydney and Michael Voros, Special Counsel, Perth.

Current trends and regulatory changes for the mining industry in QLD – a quick review

If announcements are anything to go by, the immediate future for the mining industry at a regulatory level is looking brighter. The Queensland Government has announced their intention to attempt to decrease the inefficiencies that currently exist at a compliance level in the resources sector.

Accordingly, the Queensland Government has recently enacted legislation to streamline and harmonise procedures for dealing with different types of resource interests, including exploration permits and mining leases.

The legislation reduces the initial terms of mining claims from 10 years to 5 years, and creates a new class of ‘non-assessable transfers’ (change of name, transfers of mortgages and subleases), that are not required to be assessed before being registered. The legislation also creates a new online platform, which aims to deliver information contained in mining and petroleum registers more efficiently.  

The Queensland Government has also announced its intention to minimise the red tape that exists in current legislation. The Office of Best Practice Regulation released a report in October 2012 recommending an immediate review of occupational health and safety legislation and workers’ compensation legislation that “impose red tape, increase the cost of business and reduce competition” with a view to reducing the burden of regulation by 20% over six years. 

Mining companies take note – new ASX reporting requirements to take effect at the end of the year

New ASX reporting requirements, due to come into effect in December 2013, are set to significantly change how listed mining companies report to the market. 

The new requirements oblige mining companies to report in accordance with the 2012 JORC Code, the latest edition of which was published on 20 December 2012. The changes require mining companies to report on estimated mineral resources and ore reserves by the inclusion of an annual mineral resources and ore reserves report in the annual report and to disclose production targets for major projects.

In these reports, the mining companies will need to include all material information to allow shareholders to understand the reported estimates of probable and proved ore reserves for major mining projects.

Additionally, the new listing rules also streamline the requirement for prior written consent of the competent person for annual reports.

There will be a twelve month transition period, with the new requirements to come into force on 1 December 2012.