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Clean Energy Bill 2011

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7165

2010-2011

 

The Parliament of the

Commonwealth of Australia

 

THE SENATE

 

 

 

 

Clean Energy Bill 2011

 

 

(1)     Clause 2, page 1 (line 16) to page 5 (line 3), omit the clause, substitute:

2   Commencement

             (1)  The provisions of this Act commence on a date to be fixed by Proclamation.

             (2)  A Proclamation for the purposes of subsection (1) must not be made until after elections have been held for the 44th Parliament and the Parliament has met.

[commencement]

(2)     Clause  3 , page 5 (before line 14) , before subparagraph (c)( i ), insert:

                            (ia)  take action directed towards reducing Australia’s net greenhouse gas emissions to at least 10% below 2000 levels by 2020; and

[objects]

(3)     Clause  3 , page 5 (line 17) , omit “ that action ”, substitute “ those actions ”.

[objects]

(4)     Clause  5 , page 12 (after line 31) , after the definition of director , insert:

electricity generation benchmark scheme means the scheme under subsection 181D(1).

[electricity generation benchmark scheme]

(5)     Clause  5 , page 14 (lines 1 to 3) , omit the definition of emissions intensity .

[coal-fired generation assistance]

(6)     Clause  5 , page 14 (after line 24) , after the definition of exempt landfill emissions , insert:

expert advisory committee means a committee established under section 12C.

[voluntary action]

(7)     Clause  5 , page 14 (before line 25) , before the definition of externally-administered body corporate , insert:

expert advisory committee member means a member of an expert advisory committee, and includes the Chair of an expert advisory committee.

[voluntary action]

(8)     Page 25 (after line 8) , at the end of Part  1 , add:

12A  Voluntary action

Object

             (1)  The object of this section is to establish a mechanism to take into account voluntary action on climate change by entities other than liable entities so that:

                     (a)  there remains an incentive for such voluntary action; and

                     (b)  the impact of such voluntary action does not reduce the obligations of liable entities under this Act or the regulations.

Advisory committee on voluntary action

             (2)  The Minister must establish an independent expert advisory committee with the following functions:

                     (a)  to estimate for each year the level of voluntary action on climate change;

                     (b)  to determine for each year, in writing, a voluntary action adjustment amount.

Note:          Expert advisory committees are established under Part 1A.

             (3)  In undertaking its work, the committee must:

                     (a)  consult broadly; and

                     (b)  call for, accept and consider submissions from organisations and individuals about voluntary action undertaken and proposed to be undertaken; and

                     (c)  publish on its website, at least twice a year, reports on its activities and its methods of estimating and accounting for voluntary action.

Voluntary action adjustment amount

             (4)  The voluntary action adjustment amount for any year is an amount by which the committee determines the carbon pollution cap number for the following year must be reduced to account for voluntary action on climate change without reducing the obligations of liable entities under this Act.

             (5)  The regulations may prescribe any of the following:

                     (a)  factors the committee may take into account in determining the voluntary action adjustment amount for any year;

                     (b)  factors the committee must take into account in determining the voluntary action adjustment amount for any year;

                     (c)  a method of estimating the voluntary action adjustment amount for a year.

             (6)  A determination under paragraph (2)(b) is not a legislative instrument.

Interpretation

             (7)  In this section:

voluntary action on climate change means voluntary action taken by entities other than liable entities to reduce or offset greenhouse gas emissions, which is not otherwise accounted for under this Act.

12B  Adjustment of carbon pollution cap number

                   Despite any other provision of this Act or the regulations, if the committee established under section 12A determines an amount as the voluntary action adjustment amount for a year, the carbon pollution cap number for the following year is taken to be reduced by that amount.

[voluntary action]

(9)     Page 26 (before line 1) , before Part  2 , insert:

Part 1A—Expert advisory committees

 

12C  Establishment of expert advisory committees

             (1)  The Minister may, by writing, establish committees, to be known as expert advisory committees.

             (2)  An instrument made under subsection (1) is not a legislative instrument.

12D  Functions of an expert advisory committee

                   An expert advisory committee has the functions that are conferred on it by this Act or the regulations.

12E  Membership of an expert advisory committee

                   An expert advisory committee consists of the following members:

                     (a)  a Chair;

                     (b)  at least 2, but not more than 4, other members.

12F  Appointment of expert advisory committee members

             (1)  Each expert advisory committee member is to be appointed by the Minister by written instrument.

             (2)  A person is not eligible for appointment as an expert advisory committee member unless the Minister is satisfied that the person has:

                     (a)  substantial experience or knowledge; and

                     (b)  significant standing;

in at least one of the following fields:

                     (c)  economics;

                     (d)  law;

                     (e)  Australian industry;

                      (f)  climate science;

                     (g)  energy measurement and reporting;

                     (h)  greenhouse gas emissions measurement and reporting;

                      (i)  greenhouse gas abatement;

                      (j)  financial markets;

                     (k)  trading of environmental instruments.

             (3)  The Minister must ensure that:

                     (a)  the Chair of an expert advisory committee is not a person covered by subsection (4); and

                     (b)  a majority of the other expert advisory committee members are not persons covered by subsection (4).

             (4)  This subsection applies to the following persons:

                     (a)  an employee of the Commonwealth;

                     (b)  an employee of an authority of the Commonwealth;

                     (c)  a person who holds a full-time office under a law of the Commonwealth.

             (5)  A person is not eligible for appointment as an expert advisory committee member if the person is a director, officer or employee of another person who is a liable entity for the eligible financial year in which the appointment is made.

             (6)  An expert advisory committee member holds office on a part-time basis.

12G  Period of appointment for expert advisory committee members

                   An expert advisory committee member holds office for the period specified in the instrument of appointment. The period must not exceed 5 years.

12H  Acting expert advisory committee members

Acting Chair of expert advisory committee

             (1)  The Minister may appoint an expert advisory committee member to act as the Chair of an expert advisory committee:

                     (a)  during a vacancy in the office of the expert advisory committee Chair (whether or not an appointment has previously been made to the office); or

                     (b)  during any period, or during all periods, when the Chair of an expert advisory committee:

                              (i)  is absent from duty or from Australia; or

                             (ii)  is, for any reason, unable to perform the duties of the office.

Acting expert advisory committee member (other than the Chair)

             (2)  The Minister may appoint a person to act as an expert advisory committee member (other than the Chair of an expert advisory committee):

                     (a)  during a vacancy in the office of an expert advisory committee member (other than the Chair of an expert advisory committee), whether or not an appointment has previously been made to the office; or

                     (b)  during any period, or during all periods, when an expert advisory committee member (other than the Chair of an expert advisory committee):

                              (i)  is absent from duty or from Australia; or

                             (ii)  is, for any reason, unable to perform the duties of the office.

Eligibility

             (3)  A person is not eligible for appointment to act as:

                     (a)  the Chair of an expert advisory committee; or

                     (b)  an expert advisory committee member (other than the Chair of an expert advisory committee);

unless the person is eligible for appointment as an expert advisory committee member.

Note:          See subsection 12F(2).

12J  Procedures

             (1)  The regulations may prescribe the procedures to be followed at or in relation to meetings of an expert advisory committee, including matters relating to the following:

                     (a)  the convening of meetings of the expert advisory committee;

                     (b)  the number of expert advisory committee members who are to constitute a quorum;

                     (c)  the selection of an expert advisory committee member to preside at meetings of the expert advisory committee in the absence of the Chair of the expert advisory committee;

                     (d)  the manner in which questions arising at a meeting of the expert advisory committee are to be decided.

             (2)  A resolution is taken to have been passed at a meeting of an expert advisory committee if:

                     (a)  without meeting, a majority of expert advisory committee members indicate agreement with the resolution in accordance with the method determined by the expert advisory committee under subsection (3); and

                     (b)  all expert advisory committee members were informed of the proposed resolution, or reasonable efforts had been made to inform all expert advisory committee members of the proposed resolution.

             (3)  Subsection (2) applies only if the expert advisory committee:

                     (a)  determines that it applies; and

                     (b)  determines the method by which expert advisory committee members are to indicate agreement with resolutions.

12K  Disclosure of interests to the Minister

                   An expert advisory committee member must give written notice to the Minister of all interests, pecuniary or otherwise, that the member has or acquires and that conflict or could conflict with the proper performance of the member’s functions.

12L  Disclosure of interests to expert advisory committee

             (1)  An expert advisory committee member who has an interest, pecuniary or otherwise, in a matter being considered or about to be considered by the expert advisory committee must disclose the nature of the interest to a meeting of the expert advisory committee.

             (2)  The disclosure must be made as soon as possible after the relevant facts have come to the expert advisory committee member’sknowledge.

             (3)  The disclosure must be recorded in the minutes of the meeting of the expert advisory committee.

             (4)  Unless the expert advisory committee otherwise determines, the expert advisory committee member:

                     (a)  must not be present during any deliberation by the expert advisory committee on the matter; and

                     (b)  must not take part in any decision of the expert advisory committee with respect to the matter.

             (5)  For the purposes of making a determination under subsection (4), the expert advisory committee member:

                     (a)  must not be present during any deliberation of the expert advisory committee for the purpose of making the determination; and

                     (b)  must not take part in making the determination.

             (6)  A determination under subsection (4) must be recorded in the minutes of the meeting of the expert advisory committee.

12M  Outside employment

                   An expert advisory committee member must not engage in any paid employment that conflicts or may conflict with the proper performance of his or her duties.

12N  Remuneration and allowances

             (1)  An expert advisory committee member is to be paid the remuneration that is determined by the Remuneration Tribunal. If no determination of that remuneration by the Tribunal is in operation, the member is to be paid the remuneration that is prescribed.

             (2)  An expert advisory committee member is to be paid the allowances that are prescribed.

             (3)  This section has effect subject to the Remuneration Tribunal Act 1973 .

12P  Leave of absence

             (1)  The Minister may grant leave of absence to the Chair of an expert advisory committee on the terms and conditions that the Minister determines.

             (2)  The Chair of an expert advisory committee may grant leave of absence to an expert advisory committee member on the terms and conditions that the Chair determines.

12Q  Resignation

             (1)  An expert advisory committee member may resign his or her appointment by giving the Minister a written resignation.

             (2)  The resignation takes effect on the day it is received by the Minister or, if a later day is specified in the resignation, on that later day.

12R  Termination of appointment

             (1)  The Minister may terminate the appointment of an expert advisory committee member for misbehaviour or physical or mental incapacity.

             (2)  The Minister may terminate the appointment of an expert advisory committee member if:

                     (a)  the member:

                              (i)  becomes bankrupt; or

                             (ii)  applies to take the benefit of any law for the relief of bankrupt or insolvent debtors; or

                            (iii)  compounds with his or her creditors; or

                            (iv)  makes an assignment of remuneration for the benefit of his or her creditors; or

                     (b)  the member is absent, except on leave of absence, for 3 consecutive meetings of the expert advisory committee of which he or she is a member; or

                     (c)  the member engages in paid employment that conflicts or may conflict with the proper performance of his or her duties (see section 12M); or

                     (d)  the member fails, without reasonable excuse, to comply with section 12K or 12L.

             (3)  The Minister may terminate the appointment of the Chair of an expert advisory committee if the Chair is:

                     (a)  an employee of the Commonwealth; or

                     (b)  an employee of an authority of the Commonwealth; or

                     (c)  a person who holds a full-time office under a law of the Commonwealth.

             (4)  The Minister may terminate the appointment of an expert advisory committee member if the member is a director, officer or employee of another person who is, or is likely to be, a liable entity for the eligible financial year in which the termination occurs.

12S  Other terms and conditions

                   An expert advisory committee member holds office on the terms and conditions (if any) in relation to matters not covered by this Act that are determined by the Minister.

12T  Assistance to expert advisory committee

             (1)  Any or all of the following:

                     (a)  the Regulator;

                     (b)  the Department;

                     (c)  any other Department, agency or authority of the Commonwealth;

may assist an expert advisory committee in the performance of its functions.

             (2)  The assistance may include the following:

                     (a)  the provision of information;

                     (b)  the provision of advice;

                     (c)  the making available of resources and facilities (including secretariat services and clerical assistance).

12U  Consultants

             (1)  The Chair of an expert advisory committee may, on behalf of the Commonwealth, engage persons having suitable qualifications and experience as consultants to the committee.

             (2)  The consultants are to be engaged on the terms and conditions that the Chair determines in writing.

[voluntary action]

(10)   Clause 93, page 127 (after line 14), after paragraph (a), insert:

                    (aa)  the total number of free carbon units issued in accordance with the electricity generation benchmark scheme; and

[electricity generation benchmark scheme]

(11)   Clause 99, page 129 (after line 5), after paragraph (b), insert:

                   (ba)  in accordance with the electricity generation benchmark scheme; or

[electricity generation benchmark scheme]

(12)   Clause 102, page 135 (after line 22), after paragraph (1)(a), insert:

                    (aa)  the total number of free carbon units with that vintage year issued in accordance with the electricity generation benchmark scheme; and

[electricity generation benchmark scheme]

(13)   Clause 115, page 152 (after line 5), before subparagraph (1)(a)(i), insert:

                            (ia)  in accordance with the electricity generation benchmark scheme; or

[electricity generation benchmark scheme]

(14)   Clause 116, page 152 (after line 24), before subparagraph (1)(a)(i), insert:

                            (ia)  in accordance with the electricity generation benchmark scheme; or

[electricity generation benchmark scheme]

(15)   Clause  178 , page 238 (line 13) , before “ For the ”, insert “ (1) ”.

[clean energy investment plan]

(16)   Clause  178 , page 238 (after line 24) , at the end of paragraph ( a ), add:

                            (iv)  a commitment that there will not be a net reduction in jobs in relation to the generation complex, other than as a result of investment in new technologies; and

[clean energy investment plan]

(17)   Clause  178 , page 238 (after line 32) , at the end of the clause, add:

             (2)  A person who has submitted a Clean Energy Investment Plan must submit a progress report on its implementation by the end of 10 months after the day on which free carbon units were issued to the person.

             (3)  The Minister must, within 30 days after receiving a progress report under subsection (2):

                     (a)  assess the progress report in accordance with assessment criteria specified in the regulations; and

                     (b)  determine whether or not the objectives of the Clean Energy Investment Plan are being met.

             (4)  If the Minister determines that the objectives of the Clean Energy Investment Plan are not being met, the Minister may determine that the person is required under section 210 to relinquish all of, or a proportion of, the free carbon units issued to the person for that year.

             (5)  If the Minister determines that the objectives of the Clean Energy Investment Plan are being met only in part, the Minister may determine that the person is required under section 210 to relinquish a proportion of the free carbon units issued to the person for that year.

[viability requirements]

(18)   Clause  161 , page 214 (line 8) to page 216 (line 6) , omit subclauses ( 2 ) to ( 4 ), substitute:

Issue of free units

             (2)  On each of the following days:

                     (a)  1 September in the eligible financial year beginning on 1 July 2013;

                     (c)  1 September in the eligible financial year beginning on 1 July 2014;

                     (d)  1 September in the eligible financial year beginning on 1 July 2015;

                     (e)  1 September in the eligible financial year beginning on 1 July 2016;

the Regulator must issue a number of free carbon units equal to the number of units specified in the certificate as the annual assistance number.

Note:          For annual assistance number, see section 167.

[coal-fired generation assistance]

(19)   Clause  161 , page 216 (line 12) , omit “ or (3) ”.

[coal-fired generation assistance]

(20)   Clause  161 , page 217 (line 24) , omit “ or (3) ”.

[coal-fired generation assistance]

(21)   Clause  161 , page 217 (line 30) , omit “ or (3) ”.

[coal-fired generation assistance]

(22)   Clause  161 , page 218 (line 3) , omit “ or (3) ”.

[coal-fired generation assistance]

(23)   Clause  165 , page 221 (lines 12 to 15) , omit subclause ( 3 ), substitute:

             (3)  A certificate of eligibility for coal-fired generation assistance must state that a specified number is the annual assistance number in respect of the generation complex.

Note:          The annual assistance number is worked out under section 167.

[coal-fired generation assistance]

(24)   Clause  166 , page 222 (lines 27 and 28) , omit paragraph ( 2 )( c ), substitute:

                     (c)  the emissions intensity of the generation complex is above a threshold of:

                              (i)  1,000 tonnes of carbon dioxide equivalent per $1,000,000 of revenue; or

                             (ii)  3,000 tonnes of carbon dioxide equivalent per $1,000,000 of value added.

[coal-fired generation assistance]

(25)   Clause  166 , page 222 (line 29) , omit the note.

[coal-fired generation assistance]

(26)   Clause  166 , page 223 (lines 3 to 5) , omit subclause ( 4 ).

[coal-fired generation assistance]

(27)   Clause  167 , page 223 (lines 6 to 30) , omit the clause, substitute:

167  Annual assistance number

             (1)  The annual assistance number to be specified in a certificate of eligibility for coal-fired generation assistance in respect of a generation complex is a number equal to 100% of the units above the emissions intensive baseline for the generation complex.

             (2)  For the purposes of subsection (1), the emissions intensive baseline for a generation complex is calculated in accordance with the method set out in the electricity generation benchmark scheme.

Note:          For the electricity generation benchmark scheme, see Part 8A.

[coal-fired generation assistance]

(28)   Clause  168 , page 224 (lines 1 to 22) , TO BE OPPOSED .

[coal-fired generation assistance]

(29)   Page 241 (after line 15) , after Part  8 , insert:

Part 8A—Electricity generation benchmark scheme

Division 1—Introduction

181B  Aim and objects

             (1)  The aim of this Part is to create incentives for the electricity generation sector in Australia to reduce emissions.

             (2)  The objects of this Part are:

                     (a)  to create incentives for abatement of emissions while mitigating the price impact of electricity wholesale prices on users; and

                     (b)  to ensure that any increase in energy costs is a gradual increase for all users; and

                     (c)  to promote lower emissions and improved price signals in relation to electricity generation; and

                     (d)  to provide orderly transitional arrangements in respect of all electricity generated in Australia until 2030.

181C  Simplified outline

                   The following is a simplified outline of this Part:

•      The regulations must formulate a scheme, to be known as the electricity generation benchmark scheme, for the issue of free carbon units in respect of all electricity generated in Australia.

•      The electricity generation benchmark scheme may:

               (a)     require a recipient of free carbon units to relinquish units; and

              (b)     impose reporting or record-keeping requirements on a recipient of free carbon units.

Division 2—Formulation of the electricity generation benchmark scheme

181D  Electricity generation benchmark scheme

             (1)  The regulations must formulate a scheme (to be known as the electricity generation benchmark scheme ) for the issue of free carbon units in respect of all electricity generated in Australia.

             (2)  For the purposes of regulations made under subsection (1), the allocation of free units to electricity generators under the scheme for a year is the product of:

                     (a)  the electricity production for the year; and

                     (b)  the electricity generation allocation factor for the year;

                   where:

electricity production for the year means the total number of megawatt hours of electricity generated by the generation unit in the financial year.

electricity generation allocation factor for a year means the amount specified in the following table for the financial year:

 

For the financial year beginning...

Electricity generation allocation factor is

1 July 2013

0.79

1 July 2014

0.76

1 July 2015

0.73

1 July 2016

0.70

1 July 2017

0.67

1 July 2018

0.63

1 July 2019

0.60

1 July 2020

0.57

1 July 2021

0.54

1 July 2022

0.51

1 July 2023

0.47

1 July 2024

0.44

1 July 2025

0.41

1 July 2026

0.38

1 July 2027

0.35

1 July 2028

0.31

1 July 2029

0.28

1 July 2030

0.25

             (3)  The electricity generation benchmark scheme must provide that free carbon units must not be issued to a person in accordance with the scheme unless the person:

                     (a)  meets such requirements as are specified in the scheme; and

                     (b)  has a Registry account.

             (4)  The Minister must take all reasonable steps to ensure that regulations are made for the purposes of subsection (1) before 1 July 2013.

181E  Relinquishment requirement

             (1)  The electricity generation benchmark scheme may provide that, if:

                     (a)  a number of free carbon units have been issued to a person in accordance with the scheme; and

                     (b)  any of the following subparagraphs applies:

                              (i)  a specified event happens;

                             (ii)  a specified circumstance comes into existence;

                            (iii)  the Regulator is satisfied about a specified matter;

the person is required to relinquish a number of carbon units ascertained in accordance with the scheme.

             (2)  Part 11 relating to compliance with relinquishment of carbon units applies in relation to the scheme as if a reference to the Jobs and Competitiveness Program was a reference to the electricity generation benchmark scheme.

             (3)  The number of carbon units required to be relinquished by the person must not exceed the number of units mentioned in paragraph (1)(a).

181F   Reporting requirement

Scope

             (1)  This section applies to a person if free carbon units have been issued to the person in accordance with the electricity generation benchmark scheme.

Requirement

             (2)  The electricity generation benchmark scheme may make provision for and in relation to requiring the person to give one or more written reports to the Regulator.

181G   Record-keeping requirement

Scope

             (1)  This section applies to a person if free carbon units have been issued to the person in accordance with the electricity generation benchmark scheme.

Requirement

             (2)  The electricity generation benchmark scheme may make provision for and in relation to requiring the person to:

                     (a)  make records of information specified in the scheme; and

                     (b)  retain such a record, or a copy, for 5 years after the record was made.

181H   Other matters

             (1)  The electricity generation benchmark scheme may make provision for and in relation to the following matters:

                     (a)  applications for free carbon units;

                     (b)  the approval by the Regulator of a form for such an application;

                     (c)  information that must accompany such an application;

                     (d)  documents that must accompany such an application;

                     (e)  the method of calculating the number of free carbon units to be issued to a person in accordance with the scheme.

             (2)  The electricity generation benchmark scheme may provide that an application for free carbon units must be accompanied by a prescribed report.

             (3)  The electricity generation benchmark scheme may provide for verification by statutory declaration of statements in applications for free carbon units.

181J   Ancillary or incidental provisions

                   The electricity generation benchmark scheme may contain ancillary or incidental provisions.

Division 3 Compliance with reporting and record-keeping requirements under the electricity generation benchmark scheme

181K   Compliance with reporting and record-keeping requirements

Reporting requirements

             (1)  If a person is subject to a requirement under the electricity generation benchmark scheme to give a report to the Regulator, the person must comply with that requirement.

Record-keeping requirements

             (2)  If a person is subject to a requirement under the electricity generation benchmark scheme to:

                     (a)  make a record of information; or

                     (b)  retain such a record or a copy;

the person must comply with that requirement.

Ancillary contraventions

             (3)  A person must not:

                     (a)  aid, abet, counsel or procure a contravention of subsection (1) or (2); or

                     (b)  induce, whether by threats or promises or otherwise, a contravention of subsection (1) or (2); or

                     (c)  be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection (1) or (2); or

                     (d)  conspire with others to effect a contravention of subsection (1) or (2).

Civil penalty provisions

             (4)  Subsections (1), (2) and (3) are civil penalty provisions .

Note:          Part 17 provides for pecuniary penalties for breaches of civil penalty provisions.

[electricity generation benchmark scheme]

(30)   Page 242 (before line 1) , before Part  9 , insert:

Part 8B —National energy efficiency scheme

Division 1 Introduction

181L   Aim, objects and intentions

             (1)  The aim of this Part is to promote and recognise efficiency in the production and supply of energy for use in the residential and commercial sectors of the economy by creating a market for energy efficiency savings.

             (2)  The objects of the scheme embodied in this Part are:

                     (a)  to create incentives for households and business to choose actions that reduce their carbon emissions; and

                     (b)  to deliver energy efficiency that would not have otherwise occurred; and

                     (c)  to ensure that linkages between energy efficiency measures and measures for reducing greenhouse gas emissions are properly monitored, analysed and accounted for in establishing and achieving the objects of the Act and Australia’s long-term greenhouse gas emission reduction targets.

181M   Simplified outline

                   The following is a simplified outline of this Part:

•      The regulations must formulate a scheme, to be known as the national energy efficiency scheme, to create a market for energy efficiency savings across residential and commercial sectors of the economy.

•      The Minister must, by 1 July 2012, undertake a consultation process on the design of the scheme, including consideration of the applicability at a national level of existing State and Territory schemes and consultation with key stakeholders.

•      The Minister must take all reasonable steps to ensure that regulations which reflect the outcomes of the consultation process are made by 1 July 2013.

•      The Regulator is given additional functions in relation to the formulation and operation of the scheme.

•      The Regulator may, in any year, determine an energy efficiency adjustment amount, which is an amount by which the Regulator determines the carbon pollution cap number must be reduced to account for energy efficiency savings.

•      If the Regulator determines an amount as the energy efficiency adjustment amount for a year, the carbon pollution cap number for that year is taken to be reduced by that amount.

181N  Interpretation

                   In this Part:

participant in the scheme means a person who:

                     (a)  creates or deals with white certificates or equivalent property rights under the scheme; or

                     (b)  is a liable scheme entity.

scheme means the national energy efficiency scheme formulated in accordance with section 181P.

Division 2 —Formulation of the national energy efficiency scheme

181P  National energy efficiency scheme

             (1)  The regulations must formulate a scheme (to be known as the national energy efficiency scheme ) to create a market for energy efficiency savings in the production and supply of energy for use in the residential and commercial sectors of the economy.

             (2)  Without otherwise limiting the design of the scheme, the scheme must encompass:

                     (a)  either:

                              (i)  the creation of tradable certificates representing energy efficiency savings ( white certificates ); or

                             (ii)  another process for creating and trading verifiable property rights over particular energy efficiency savings ( equivalent property rights ); and

                     (b)  the imposition of energy efficiency targets on liable scheme entities, which such entities can meet by creating or trading white certificates or equivalent property rights; and

                     (c)  the imposition of penalties for liable scheme entities which do not meet energy efficiency targets; and

                     (d)  procedures for the implementation and oversight of the scheme by the Regulator.

181Q  Consultation on the formulation of the scheme

             (1)  The Minister must, by 1 July 2012, undertake a consultative policy development process with the aims of:

                     (a)  formulating a national energy efficiency scheme; and

                     (b)  determining a method of setting energy efficiency targets under the scheme; and

                     (c)  developing the administrative requirements to implement the scheme.

             (2)  The consultation process must, at a minimum, include:

                     (a)  consultation with each of the States and Territories;

                     (b)  consideration of the applicability at a national level of:

                              (i)  the Greenhouse Gas Reduction Scheme, operating in New South Wales and the ACT; and

                             (ii)  the Victorian Energy Efficiency Target Scheme; and

                            (iii)  the South Australian Residential Energy Efficiency Scheme; and

                            (iv)  the New South Wales Energy Efficiency Scheme; and

                             (v)  any equivalent scheme operating or planned to operate in any other State or Territory jurisdiction before the commencement of this section;

                     (c)  consultation with key stakeholders.

181R  Implementation

                   The Minister must take all reasonable steps to ensure that regulations which reflect the outcomes of the consultation process are made by 1 July 2013.

181S  Functions of the Regulator—structure of the scheme

                   The Regulator has the following functions in relation to the structure of the scheme:

                     (a)  assisting the Minister in the consultation process;

                     (b)  reviewing the operation of the scheme, and reporting to the Minister and each House of the Parliament on the operation of the scheme at least every 2 years;

                     (c)  making recommendations to the Minister on matters of policy relating to the operation of the scheme;

                     (d)  any other function prescribed by the regulations for the purposes of this paragraph.

181T  Elements of the scheme

             (1)  Without limiting the design of the scheme, the regulations may prescribe:

                     (a)  which entities may create and deal with white certificates or equivalent property rights;

                     (b)  procedures for the accreditation of such entities;

                     (c)  the eligible activities through which white certificates or equivalent property rights may be created;

                     (d)  the manner in which white certificates or equivalent property rights may be traded and otherwise dealt with;

                     (e)  which entities are liable under the scheme ( liable scheme entities );

                      (f)  methods of estimating or calculating:

                              (i)  energy efficiency savings made under the scheme; and

                             (ii)  the effect of the scheme on the price of carbon;

                     (g)  procedures for the transfer of property rights in energy efficiency savings between the scheme and State or Territory schemes dealing with energy efficiency;

                     (h)  reporting and compliance protocols.

             (2)  Without limiting the generality of paragraph (1)(e), the definition of liable scheme entities may include (but is not limited to) entities which produce or supply electricity, gas and oil for use in the residential and commercial sectors of the economy.

181U   Ancillary or incidental provisions

                   The scheme may contain ancillary or incidental provisions.

Division 3 —Operation of the national energy efficiency scheme

181V  Functions of the Regulator—operation of the scheme

             (1)  The Regulator has the following functions in relation to the operation of the scheme:

                     (a)  to certify entities for the purposes of the scheme;

                     (b)  to determine, in writing, energy efficiency savings targets to be met under the scheme;

                     (c)  to verify energy efficiency savings and ensure that the benefit of property rights in relation to particular savings are not accounted for elsewhere;

                     (d)  to monitor, analyse and report on energy efficiency savings;

                     (e)  any other function prescribed by the regulations for the purposes of this paragraph.

             (2)  A determination under paragraph (1)(b) is not a legislative instrument.

181W  Determining energy efficiency adjustment amount

             (1)  The Regulator may, in any year, determine, in writing, an energy efficiency adjustment amount for that year.

             (2)  A determination under subsection (1) is not a legislative instrument.

             (3)  The energy efficiency adjustment amount for any year is an amount by which the Regulator determines the carbon pollution cap number for the following year must be reduced to account for energy efficiency savings made under the scheme.

             (4)  The regulations may prescribe any of the following:

                     (a)  factors the Regulator may take into account in making such a determination;

                     (b)  factors the Regulator must take into account in making such a determination;

                     (c)  a method of calculating the energy efficiency adjustment amount for a year.

             (5)  The Regulator may determine that there is no energy efficiency adjustment amount for a particular year.

181X  Adjustment of carbon pollution cap number

                   Despite any other provision of this Act or the regulations, if the Regulator determines an amount as the energy efficiency adjustment amount for a year, the carbon pollution cap number for the following year is taken to be reduced by that amount.

Division 4 —R eporting and record-keeping requirements

181Y  Reporting and record-keeping requirements

             (1)  The scheme may make provision for and in relation to requiring a person who is a participant in the scheme to give one or more written reports to the Regulator.

             (2)  The scheme may make provision for and in relation to requiring a person who is a participant in the scheme to:

                     (a)  make records of information specified in the scheme; and

                     (b)  retain such a record, or a copy, for 5 years after the record was made.

181Z   Compliance with reporting and record-keeping requirements

Reporting requirements

             (1)  If a person is subject to a requirement under the scheme to give a report to the Regulator, the person must comply with that requirement.

Record-keeping requirements

             (2)  If a person is subject to a requirement under the scheme to:

                     (a)  make a record of information; or

                     (b)  retain such a record or a copy;

the person must comply with that requirement.

Ancillary contraventions

             (3)  A person must not:

                     (a)  aid, abet, counsel or procure a contravention of subsection (1) or (2); or

                     (b)  induce, whether by threats or promises or otherwise, a contravention of subsection (1) or (2); or

                     (c)  be in any way, directly or indirectly, knowingly concerned in, or party to, a contravention of subsection (1) or (2); or

                     (d)  conspire with others to effect a contravention of subsection (1) or (2).

Civil penalty provisions

             (4)  Subsections (1), (2) and (3) are civil penalty provisions .

Note:          Part 17 provides for pecuniary penalties for breaches of civil penalty provisions.

[ national energy efficiency scheme ]

(31)   Clause  281 , page 330 (table item  32 , 2nd column), omit “ factor ”, substitute “ number ”.

[coal-fired generation assistance]

(32)   Clause  303B , page 355 (lines 6 and 7) , omit paragraph ( 4 )( b ), substitute:

                     (b)  the emissions intensity of the complex is above a threshold of:

                              (i)  1,000 tonnes of carbon dioxide equivalent per $1,000,000 of revenue; or

                             (ii)  3,000 tonnes of carbon dioxide equivalent per $1,000,000 of value added.

[coal-fired generation assistance]

(33)   Clause 303B, page 355 (line 8) , omit the note.

[coal-fired generation assistance]

(34)   Clause  303B , page 355 (line 19) , omit “or 168 ”.

[coal-fired generation assistance]

(35)   Clause  303B , page 355 (line 22) , omit “sections 5 and 168 ”, “substitute “section 5”.

[coal-fired generation assistance]

(36)   Clause  303B , page 355 (line 23) , omit “sections 5 and 168 ”, “substitute “section 5”.

[coal-fired generation assistance]