Increasing global pressures urge businesses to cut greenhouse gas, while consumers demand sustainability. Regulators in the climate change sector play a crucial role in ensuring that explicit protections make the sector function properly. In Australia, the Clean Energy Regulator oversees ‘carbon abatement’ schemes, aiming to promote:
- the removal of greenhouse gases from the atmosphere; or
- avoiding emissions.
This article examines the Clean Energy Regulator’s role in Australia, the schemes that it oversees, and how they could impact your business.
What Does the Clean Energy Regulator Do?
The Clean Energy Regulator Act 2011 (Cth) established the Clean Energy Regulator to promote carbon decline in Australia.
The Clean Energy Regulator manages various schemes, including the following:
- National Greenhouse and Energy Reporting Scheme (including the ‘safeguard mechanism’);
- ACCU Scheme (formerly known as the Emissions Reduction Fund);
- Renewable Energy Target; and
- Australian National Registry of Emissions Units.
What is the National Greenhouse and Energy Reporting Scheme?
The National Greenhouse and Energy Reporting Scheme, introduced in 2007, compels organisations (known as ‘covered entities’) to provide information about their greenhouse gas emissions, energy production and consumption. The Clean Energy Regulator is responsible for:
- managing compliance by ‘covered entities’ with the scheme; and
- receiving reports submitted by those entities through the Emissions and Energy Reporting System.
As of 2023, you may need to report under the scheme if:
- your business emits 25 kilotons (kt) or more of greenhouse gases (based on ‘scope 1’ and ‘scope 2’ emissions), produces 100 terajoules (TJ) or more of energy, or consumes 100TJ or more of energy; or
- your corporate group emits 50kt or more of greenhouse gases (based on ‘scope 1’ and ‘scope 2’ emissions), produces 200TJ or more of energy, or consumes 200TJ or more of energy.
Since 2016, the National Greenhouse and Energy Reporting Scheme has been the reporting and compliance framework for the Australian Government’s ‘safeguard mechanism’. The mechanism requires Australia’s highest greenhouse gas emitters to maintain their emissions below a set baseline; otherwise, they may face monetary penalties for non-compliance.
Continue reading this article below the formWhat is the ACCU Scheme?
The ACCU Scheme promotes projects that reduce carbon emissions. Project proponents develop these projects and receive ACCUs for every tonne of carbon dioxide equivalent they store or avoid. The Clean Energy Regulator ensures compliance and issues ACCUs based on carbon reduction. It also buys ACCUs for the Australian Government and allows private sales to companies and other buyers.
What is the Renewable Energy Target?
The Australian Government introduced the Renewable Energy Target to cut greenhouse gas emissions in the electricity sector. It promotes using sustainable and renewable energy sources through a market for Renewable Energy Certificates. Businesses under this scheme must buy and submit a set number of these certificates to the Clean Energy Regulator every year.
Additionally, the Renewable Energy Target includes two schemes:
- the Large-Scale Renewable Energy Target (LRET); and
- the Small-Scale Renewable Energy Scheme (SRES).
Under the Large-Scale Renewable Energy Target, energy suppliers are encouraged to develop renewable energy power stations in exchange for ‘large-scale generation certificates’ (LGCs). These LGCs can then be sold to organisations required to purchase them under the Renewable Energy Target or those seeking to support emission reduction claims.
The Small-Scale Renewable Energy Scheme encourages individuals, households and small businesses to install eligible renewable energy systems, such as solar panels. For each megawatt hour of renewable energy generated or displaced, the Clean Energy Regulator issues one small-scale technology certificate (STC).
What is the Australian National Registry of Emissions Units?
The Australian National Registry of Emissions Units (ANREU) records emissions units issued under the Kyoto Protocol (an international treaty setting out the commitment of certain countries to reducing greenhouse gas emissions) and ACCUs. It aims to track accurate accounts of ACCUS and Kyoto units:
- issued;
- transferred;
- acquired;
- cancelled; or
- retired.
The Clean Energy Regulator runs this registry to keep it accurate and current. To get ACCUs from the Clean Energy Regulator, you need an account on the ANREU, and only those with an account can transfer ACCUs to others.
This guide will help you to understand your corporate governance responsibilities, including the decision-making processes.
Key Takeaways
The Clean Energy Regulator oversees various schemes for reducing greenhouse gas emissions in Australia, including the following:
- National Greenhouse and Energy Reporting Scheme;
- ACCU Scheme;
- Renewable Energy Target; and
- Australian National Registry of Emissions Units.
Businesses may need to comply with reporting requirements and emission reduction targets set by these schemes. The regulator issues ACCUs to approved projects and manages compliance with emission reduction initiatives. Overall, the Clean Energy Regulator plays a vital role in promoting sustainability and reducing environmental impact in Australia.
If you want to know more about the Clean Energy Regulator or carbon credits, our experienced EnviroTech lawyers can assist as part of our LegalVision membership. For a low monthly fee, you will have unlimited access to lawyers to answer your questions and draft and review your documents. Call us today on 1300 544 755 or visit our membership page.
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