The Clean Energy Regulator can make an exemption declaration that no excess emissions situation exists for a facility for a monitoring period. It can do so only where the entire excess results directly from a natural disaster or criminal activity.
Key points
- Only natural disasters or criminal activity qualify
- The whole excess must result directly from the event
- No other exceptional circumstances are accepted
- A declaration means no units are surrendered for the excess
- Due 31 October after the monitoring period
What qualifies
- Natural disasters: sudden and extreme events caused by natural forces, such as storms, floods, earthquakes and bushfires, that cause serious harm. Human-caused events and industrial accidents do not qualify.
- Criminal activity: activity the CER has reasonable cause to believe involves an offence. The responsible emitter must not be complicit in the activity.
What does not qualify
The CER has no power to exempt an excess caused by any other kind of exceptional circumstance.
How to apply
Applications go to the CER, which can grant an exemption only when the conditions above are met. They are due by 31 October after the end of the monitoring period, or the next business day if that falls on a weekend or ACT public holiday.
Direct and indirect effects
The CER looks for a direct causal link between the event and the excess. As an illustration, a flood that damages a facility’s emissions control equipment could have a direct link. A decision to raise output because a competitor’s plant was flooded is a market response to the event, which the guideline treats as indirect and outside the exemption.
Effect of a declaration
If the CER makes a declaration, the excess emissions situation is treated as not existing for that monitoring period, so no units need to be surrendered for it. Without one, an unresolved excess can attract a civil penalty calculated as the excess tonnes multiplied by the value of a penalty unit, plus 100 penalty units for each day it continues, for up to two years from 1 April.
If an exemption is not available
Where the cause of an excess does not qualify, the responsible emitter must manage it in other ways, such as surrendering ACCUs or SMCs, or applying for a TEBA determination, borrowing adjustment or multi-year monitoring period if eligible.
References & sources
Primary regulatory documents and authoritative references underpinning this answer.