(1)   What data sources has the department presented, or will it present, to the Government for consideration in relation to setting allocative baselines for ammonia and urea production.

(2)   Has the department included, or will it include, international emissions data for ammonia and urea in the advice for consideration by the Government; if so, did it, or will it, include emissions data for all feedstocks used internationally or just natural gas production of ammonia and urea; if so, why.

The activity definitions and allocative baselines for emissions-intensive, trade-exposed (EITE) activities will be released as regulations to the Carbon Pollution Reduction Scheme Act subsequent to the passage of the Bills through Parliament. The Government intends releasing draft regulations for EITE activities progressively, the first batch were released in June 2009, and second batch in December 2009.

Allocations of assistance for EITEs detailed in the regulations will be based on the average emissions intensity per unit of production in 2006-07 and 2007-08 of entities conducting the eligible activity in Australia. The Government will take into account international evidence on the emissions per unit of output for activities, particularly those where there is currently only one entity operating in Australia. The key role of this information is to provide assurance to the Government that there are no significant anomalies between the emissions intensity of Australian production and that of a sample of global producers. As highlighted in the Guidance Paper: Assessment of activities for the purposes of the emissions-intensive trade-exposed assistance program released by the Department of Climate Change in February 2009, this information would be expected to carry greater weight in the Government’s considerations where not all entities conducting the activity have submitted data or where the independent audit of the data raises concerns.

It is important to note that this analysis is distinct from an international benchmarking exercise, in which allocations of assistance are set in relation to some measure of the emissions intensity of global production (e.g. ‘best practice’). Instead, the Government’s policy is to provide a level of assistance that is linked with the expected carbon cost exposure of current Australian producers.