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Carbon Pollution Reduction Scheme Bill 2009

Part 4 Emissions units

Division 1 Introduction

82   Simplified outline

                   The following is a simplified outline of this Part:

•      The Authority may issue Australian emissions units.

•      Most Australian emissions units will be issued as the result of an auction.

•      Some Australian emissions units may be issued free of charge or for a fixed charge.

•      The national scheme cap limits:

               (a)     the total number of auctioned Australian emissions units; and

              (b)     the total number of free Australian emissions units issued in accordance with the emissions-intensive trade-exposed assistance program; and

               (c)     the total number of free Australian emissions units issued in accordance with Part 9 (coal-fired electricity generation).

•      An Australian emissions unit will have a vintage year that consists of a particular financial year.

•      An Australian emissions unit is generally transferable.

•      Entries may be made in Registry accounts for:

               (a)     Australian emissions units; and

              (b)     Kyoto units; and

               (c)     non-Kyoto international emissions units.



 

Division 2 Australian emissions units

Subdivision A Issue of Australian emissions units

83   Issue of Australian emissions units

                   The Authority may, on behalf of the Commonwealth, issue units, to be known as Australian emissions units.

84   Identification number

                   An Australian emissions unit is to be identified by a unique number, to be known as the identification number of the unit.

85   Vintage year

             (1)  The last 4 digits of an Australian emissions unit’s identification number are to be the digits of:

                     (a)  the calendar year 2012; or

                     (b)  a later calendar year.

             (2)  The vintage year of an Australian emissions unit is the eligible financial year that ends on 30 June in that calendar year.

Note:          For example, if the last 4 digits of an Australian emissions unit’s identification number are 2012, the vintage year of the unit is the eligible financial year that ends on 30 June 2012.

86   When Australian emissions units may be issued

                   The Authority may issue an Australian emissions unit with a particular vintage year at any time before the end of 15 December next following the vintage year.

Note:          For example, the Authority may, at any time before the end of 15 December 2012, issue an Australian emissions unit with the vintage year beginning on 1 July 2011.

87   How Australian emissions units are to be issued

             (1)  The Authority is to issue an Australian emissions unit to a person by making an entry for the unit in a Registry account kept by the person.

             (2)  An entry for an Australian emissions unit in a Registry account is to consist of the identification number of the unit.

             (3)  The Authority must not issue an Australian emissions unit to a person unless the person has a Registry account.

88   Circumstances in which Australian emissions units may be issued

                   The Authority must not issue an Australian emissions unit otherwise than:

                     (a)  as the result of an auction conducted by the Authority; or

                     (b)  in accordance with section 89 (issue of units for a fixed charge); or

                     (c)  in accordance with the emissions-intensive trade-exposed assistance program; or

                     (d)  in accordance with Part 9 (coal-fired electricity generation); or

                     (e)  in accordance with Part 10 (reforestation); or

                      (f)  in accordance with Part 11 (destruction of synthetic greenhouse gases).

89   Issue of Australian emissions units for a fixed charge

Application

             (1)  During the issue period set out in an item in the following table, a person who has a Registry account may apply to the Authority for the issue to the person of a specified number of Australian emissions units:

                     (a)  with a vintage year set out in the item; and

                     (b)  for the per unit charge set out in the item.

 

Issue of Australian emissions units for a fixed charge

Item

Issue period

Vintage year

Charge per unit

1

The period:

(a) beginning at the emissions number publication time of the person for the eligible financial year beginning on 1 July 2011; and

(b) ending at the end of 15 December 2012.

the eligible financial year beginning on 1 July 2011

$10

2

The period:

(a) beginning at the emissions number publication time of the person for the eligible financial year beginning on 1 July 2012; and

(b) ending at the end of 15 December 2013.

the eligible financial year beginning on 1 July 2012

$40 multiplied by the indexation factor for the eligible financial year beginning on 1 July 2011, multiplied by the indexation factor for the eligible financial year beginning on 1 July 2012

3

The period:

(a) beginning at the emissions number publication time of the person for the eligible financial year beginning on 1 July 2013; and

(b) ending at the end of 15 December 2014.

the eligible financial year beginning on 1 July 2013

the amount mentioned in item 2 multiplied by the indexation factor for the eligible financial year beginning on 1 July 2013

4

The period:

(a) beginning at the emissions number publication time of the person for the eligible financial year beginning on 1 July 2014; and

(b) ending at the end of 15 December 2015.

the eligible financial year beginning on 1 July 2014

the amount mentioned in item 3 multiplied by the indexation factor for the eligible financial year beginning on 1 July 2014

5

The period:

(a) beginning at the emissions number publication time of the person for the eligible financial year beginning on 1 July 2015; and

(b) ending at the end of 15 December 2016.

the eligible financial year beginning on 1 July 2015

the amount mentioned in item 4 multiplied by the indexation factor for the eligible financial year beginning on 1 July 2015

Note 1:       For emissions number publication time , see section 5.

Note 2:       For indexation factor , see subsection (7).

Maximum number of units

             (2)  The number of Australian emissions units specified in the application must not exceed the number worked out using the following formula:

Form of application

             (3)  An application must:

                     (a)  be in writing; and

                     (b)  be in a form approved, in writing, by the Authority.

Issue of units

             (4)  If, during an issue period set out in an item in the table in subsection (1):

                     (a)  a person has applied for a specified number of Australian emissions units with a particular vintage year; and

                     (b)  the person has tendered the total amount of the charges payable for the issue of the units;

the Authority must, as soon as practicable, issue to the person that number of Australian emissions units with that vintage year.

Automatic surrender of units

             (5)  If an Australian emissions unit is issued to a person in accordance with this section:

                     (a)  immediately after the issue of the unit, the person is taken to have surrendered the unit; and

                     (b)  the person is taken to have done so by electronic notice transmitted to the Authority under subsection 129(1); and

                     (c)  the notice is taken to have:

                              (i)  specified the unit; and

                             (ii)  specified the vintage year of the unit as the eligible financial year to which the surrender relates; and

                            (iii)  specified the account number of the person’s Registry account in which there is an entry for the unit that is being surrendered.

             (6)  An Australian emissions unit issued to a person in accordance with this section cannot be transferred or relinquished.

Indexation factor

             (7)  For the purposes of this section, the indexation factor for an eligible financial year is the number worked out by:

                     (a)  dividing the index number for the March quarter immediately preceding that eligible financial year by the index number for the March quarter immediately preceding that first-mentioned March quarter; and

                     (b)  adding 0.050 to the number worked out under paragraph (a).

             (8)  The indexation factor is to be calculated to 3 decimal places (rounding up if the fourth decimal place is 5 or more).

             (9)  Calculations under paragraph (7)(a) are to be made:

                     (a)  using only the index numbers published in terms of the most recently published reference base for the Consumer Price Index; and

                     (b)  disregarding index numbers published in substitution for previously published index numbers (except where the substituted numbers are published to take account of changes in the reference base).

           (10)  For the purposes of this section, the index number in relation to a quarter is the All Groups Consumer Price Index number (excluding volatile items), being the weighted average of the 8 capital cities, published by the Australian Statistician in respect of that quarter.

Publication of fixed charge

           (11)  Before the start of each of the following eligible financial years:

                     (a)  the eligible financial year beginning on 1 July 2012;

                     (b)  the eligible financial year beginning on 1 July 2013;

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

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

the Authority must publish on its website the per unit charge applicable under subsection (1) for the issue of an Australian emissions unit with a vintage year of that eligible financial year.

90   Payment of charges for the issue of Australian emissions units

Scope

             (1)  This section applies if:

                     (a)  an amount is payable by a person by way of a charge for the issue to the person of an Australian emissions unit; and

                     (b)  the unit is to be issued:

                              (i)  as the result of an auction; or

                             (ii)  in accordance with section 89 (issue of units for a fixed charge).

Payment of charge

             (2)  The charge is payable to the Authority on behalf of the Commonwealth.

             (3)  The Authority must not issue the unit unless the person pays the charge.

91   Imposition of charges for the issue of Australian emissions units

                   If a charge payable for the issue of an Australian emissions unit is taxation within the meaning of section 55 of the Constitution:

                     (a)  the charge is not imposed by this Act; and

                     (b)  the charge is imposed by whichever of the following Acts is applicable:

                              (i)  the Carbon Pollution Reduction Scheme (Charges—Customs) Act 2009 ;

                             (ii)  the Carbon Pollution Reduction Scheme (Charges—Excise) Act 2009 ;

                            (iii)  the Carbon Pollution Reduction Scheme (Charges—General) Act 2009 .

92   Issue of Australian emissions units—national scheme cap number

             (1)  The Authority must not issue an Australian emissions unit with a particular vintage year starting on or after 1 July 2012 unless there is a national scheme cap number for that vintage year.

             (2)  Subsection (1) has effect despite any other provision of this Act.

             (3)  Subsection (1) does not apply to an Australian emissions unit with a vintage year beginning on 1 July 2011.

93  Australian emissions units—total number

             (1)  The Authority must ensure that the sum of:

                     (a)  the total number of Australian emissions units with a particular vintage year that are offered at auctions conducted by the Authority; and

                     (b)  the total number of free Australian emissions units with that vintage year issued in accordance with the emissions-intensive trade-exposed assistance program; and

                     (c)  the total number of free Australian emissions units with that vintage year issued in accordance with Part 9 (coal-fired electricity generation);

equals the national scheme cap number for that vintage year.

             (2)  If an Australian emissions unit is offered at auction on 2 or more occasions, the unit is only counted for the purposes of paragraph (1)(a) on the first of those occasions.

             (3)  Paragraph (1)(a) does not apply to an auction conducted under section 100 or 101.

             (4)  Subsection (1) does not apply to an Australian emissions unit with a vintage year beginning on 1 July 2011.

Subdivision B Property in, and transfer of, Australian emissions units

94   An Australian emissions unit is personal property

                   An Australian emissions unit is personal property and, subject to sections 96 and 97, is transmissible by assignment, by will and by devolution by operation of law.

95   Transfer of Australian emissions units

                   For the purposes of this Act, if there is an entry for an Australian emissions unit in a Registry account (the first Registry account ) kept by a person (the first person ):

                     (a)  a transfer of the unit from the first Registry account to a Registry account kept by another person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the Registry account kept by the other person; and

                     (b)  the transfer of the unit from the first Registry account to another Registry account kept by the first person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the other Registry account kept by the first person.

96   Transmission of Australian emissions units by assignment

             (1)  A transmission by assignment of an Australian emissions unit is of no force until:

                     (a)  the transferor, by electronic notice transmitted to the Authority, instructs the Authority to transfer the unit from the relevant Registry account kept by the transferor to a Registry account kept by the transferee; and

                     (b)  the Authority complies with that instruction.

             (2)  An instruction under paragraph (1)(a) must set out:

                     (a)  the account number of the transferor’s Registry account; and

                     (b)  the account number of the transferee’s Registry account.

             (3)  If the Authority receives an instruction under paragraph (1)(a), the Authority must comply with the instruction as soon as practicable after receiving it.

             (4)  The Registry must set out a record of each instruction under paragraph (1)(a).

             (5)  If the transferor is the Commonwealth, the Minister may give an instruction under subsection (1) on behalf of the transferor.

97   Transmission of Australian emissions units by operation of law etc.

Scope

             (1)  This section applies if an Australian emissions unit is transmitted from a person (the transferor ) to another person (the transferee ) by any lawful means other than by a transfer under section 96.

Declaration of transmission

             (2)  The transferee must, within 14 days after the transmission, give the Authority:

                     (a)  a declaration of transmission; and

                     (b)  such evidence of transmission as is specified in the regulations.

             (3)  A declaration of transmission must be made in accordance with the regulations.

             (4)  If the transferee does not already have a Registry account, the declaration of transmission must be accompanied by a request under section 147 for the Authority to open a Registry account in the name of the transferee.

             (5)  If the Authority is satisfied that special circumstances warrant the extension of the 14-day period mentioned in subsection (2), the Authority may extend that period.

Transfer of unit—transferee already has a Registry account

             (6)  If the transferee already has a Registry account, the Authority must, as soon as practicable after receiving the declaration of transmission, transfer the unit from the relevant Registry account kept by the transferor to a Registry account kept by the transferee.

Transfer of unit—transferee does not have a Registry account

             (7)  If:

                     (a)  the transferee does not already have a Registry account; and

                     (b)  in accordance with the request under section 147, the Authority has opened a Registry account in the name of the transferee;

the Authority must, as soon as practicable after opening the Registry account, transfer the unit from the relevant Registry account kept by the transferor to the Registry account kept by the transferee.

Record

             (8)  If the Authority transfers the unit under subsection (6) or (7), the Registry must set out a record of the declaration of transmission.

When the transferee is the Commonwealth

             (9)  If the transferee is the Commonwealth, the Minister may give:

                     (a)  the declaration of transmission; and

                     (b)  the evidence mentioned in paragraph (2)(b);

on behalf of the transferee.

98   Transfer of Australian emissions units to another Registry account held by the transferor

Scope

             (1)  This section applies if:

                     (a)  a person keeps a Registry account (the first Registry account ) in which there is an entry for an Australian emissions unit; and

                     (b)  the person, by electronic notice transmitted to the Authority, instructs the Authority to transfer the unit from the first Registry account to another Registry account kept by the person; and

                     (c)  the instruction sets out:

                              (i)  the account number of the first Registry account; and

                             (ii)  the account number of the other Registry account.

Compliance with instruction

             (2)  If a person gives the Authority an instruction under paragraph (1)(b), the Authority must comply with the instruction as soon as practicable after receiving it.

             (3)  The Registry must set out a record of the instruction under paragraph (1)(b).

98A   Equitable interests in relation to an Australian emissions unit

             (1)  This Act does not affect:

                     (a)  the creation of; or

                     (b)  any dealings with; or

                     (c)  the enforcement of;

equitable interests in relation to an Australian emissions unit.

             (2)  Subsection (1) is enacted for the avoidance of doubt.

Subdivision C Auctions of Australian emissions units

99   Issue of Australian emissions units as the result of an auction

                   The Authority may issue Australian emissions units as the result of an auction conducted by the Authority.

100   Secondary market auctions of relinquished Australian emissions units

Scope

             (1)  This section applies if there is an entry for an Australian emissions unit in the Commonwealth relinquished units account.

Authority may auction unit

             (2)  The Authority may, on behalf of the Commonwealth, auction the unit.

101   Secondary market auctions of free Australian emissions units

Scope

             (1)  This section applies if:

                     (a)  a free Australian emissions unit has been issued to a person:

                              (i)  in accordance with the emissions-intensive trade-exposed assistance program; or

                             (ii)  in accordance with Part 9 (coal-fired electricity generation); or

                            (iii)  in accordance with Part 10 (reforestation); or

                            (iv)  in accordance with Part 11 (destruction of synthetic greenhouse gases); and

                     (b)  the unit has not been transferred; and

                     (c)  the unit has a vintage year of an eligible financial year beginning on or after 1 July 2012.

Authority may auction unit

             (2)  The Authority may, on behalf of the person, auction the unit.

Sunset

             (3)  This section ceases to have effect at the end of 31 December 2013.

102   Combined auctions of Australian emissions units

                   The Authority may conduct an auction under section 100 or 101 in combination with an auction referred to in section 99.

103   Policies, procedures and rules for auctioning Australian emissions units

             (1)  The Authority may, by legislative instrument, determine the policies, procedures and rules that apply in relation to the auctioning of Australian emissions units by the Authority.

             (2)  A determination under subsection (1) may deal with any or all of the following matters:

                     (a)  the types of auction;

                     (b)  the timing of auctions;

                     (c)  advertising of auctions;

                     (d)  participants in auctions;

                     (e)  fees for participants in auctions;

                      (f)  proxy bidding;

                     (g)  representatives of participants in auctions;

                     (h)  the minimum number of Australian emissions units to which a bid may relate;

                      (i)  variation of bids;

                      (j)  the total number of units with a particular vintage year that are to be offered at a particular auction under section 99;

                     (k)  limits on the total number of units with a particular vintage year that may be acquired by a person as a result of a particular auction;

                      (l)  limits on the total number of units with a particular vintage year that may be acquired by the members of a controlling corporation’s group as a result of a particular auction;

                    (m)  reserve prices or charges (if any);

                     (n)  deposits (if any) to be lodged by participants in auctions;

                     (o)  the refund or forfeiture of such deposits;

                     (p)  guarantees (if any) to be given in respect of payment obligations that are incurred by participants in auctions;

                     (q)  timing and methods of payment of prices or charges.

             (3)  Subsection (2) does not limit subsection (1).

             (4)  A fee specified under paragraph (2)(e) must not be such as to amount to taxation.

             (5)  A determination under subsection (1) may make provision in relation to a matter by conferring a power to make a decision of an administrative character on the Authority.

             (6)  To avoid doubt, a determination under subsection (1) is taken to be a law for the purposes of section 28 of the Financial Management and Accountability Act 1997 .

Subdivision D Special provisions relating to free Australian emissions units

103A   Cancellation of certain unused free Australian emissions units

Scope

             (1)  This section applies if:

                     (a)  an Australian emissions unit was issued:

                              (i)  in accordance with the emissions-intensive trade-exposed assistance program; or

                             (ii)  in accordance with Part 9 (coal-fired electricity generation); and

                     (b)  the unit has a vintage year beginning on 1 July 2011; and

                     (c)  there was an entry for the unit in a person’s Registry account at the end of 15 December 2012.

Cancellation of unit

             (2)  The Authority must cancel the unit.

             (3)  The Authority must remove the entry for the unit from the person’s Registry account.

             (4)  The Registry must set out a record of each cancellation under subsection (2).

103B   Buy-back of certain free Australian emissions units

Scope

             (1)  This section applies if a person is the registered holder of one or more Australian emissions units that:

                     (a)  were issued:

                              (i)  in accordance with the emissions-intensive trade-exposed assistance program; or

                             (ii)  in accordance with Part 9 (coal-fired electricity generation); and

                     (b)  have a vintage year beginning on 1 July 2011.

Buy-back

             (2)  During the period:

                     (a)  beginning at the start of 15 July 2011; and

                     (b)  ending at the end of 1 December 2012;

the person may, by electronic notice transmitted to the Authority, request the Authority to cancel the unit or units in exchange for the payment to the person of the amount (the buy-back amount ) worked out using the formula:

             (3)  If the Authority receives a request under subsection (2) from a person in relation to one or more Australian emissions units, the Authority must:

                     (a)  on a day ascertained in accordance with the regulations:

                              (i)  cancel the unit or units; and

                             (ii)  remove the entries for the unit or units from the person’s Registry account in which there is an entry for the unit or units; and

                     (b)  on or as soon as practicable after that day, on behalf of the Commonwealth, pay the buy-back amount to the person.

             (4)  The Registry must set out a record of each cancellation under subsection (3).

             (5)  The Consolidated Revenue Fund is appropriated for the purposes of making payments under this section.



 

Division 3 Kyoto units

104   Entries for Kyoto units

                   An entry for a Kyoto unit in a Registry account is to consist of the serial number of the unit.

105   Issue of Australia’s assigned amount units

Object

             (1)  The object of this section is to provide for the issue of Australia’s assigned amount units for a commitment period.

Issue

             (2)  The Minister may, by written notice given to the Authority, direct the Authority to issue to the Commonwealth, in accordance with the Kyoto rules, a specified number of assigned amount units for a specified commitment period.

             (3)  The Authority must comply with a direction under subsection (2).

             (4)  The Authority is to issue an assigned amount unit by making an entry for the unit in a Commonwealth holding account.

             (5)  This section does not, by implication, affect the validity of the issue of assigned amount units, where the units were issued before the commencement of this section under the executive power of the Commonwealth.

106   Issue of removal units

Object

             (1)  The object of this section is to provide for the issue of Australia’s removal units.

Issue

             (2)  The Minister may, by written notice given to the Authority, direct the Authority to issue to the Commonwealth, in accordance with the Kyoto rules, a specified number of removal units.

             (3)  The Authority must comply with a direction under subsection (2).

             (4)  The Authority is to issue a removal unit by making an entry for the unit in a Commonwealth holding account.

             (5)  This section does not, by implication, affect the validity of the issue of removal units, where the units were issued before the commencement of this section under the executive power of the Commonwealth.

107   Transfer of Kyoto units

             (1)  For the purposes of this Act, if there is an entry for a Kyoto unit in a Registry account (the first Registry account ) kept by a person (the first person ):

                     (a)  a transfer of the unit from the first Registry account to a Registry account kept by another person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the Registry account kept by the other person; and

                     (b)  the transfer of the unit from the first Registry account to another Registry account kept by the first person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the other Registry account kept by the first person; and

                     (c)  the transfer of the unit from the first Registry account to a foreign account kept by another person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the foreign account kept by the other person; and

                     (d)  the transfer of the unit from the first Registry account to a foreign account kept by the first person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the foreign account kept by the first person.

             (2)  For the purposes of this Act, if there is an entry for a Kyoto unit in a foreign account, a transfer of the unit from the foreign account to a Registry account consists of:

                     (a)  the removal of the entry for the unit from the foreign account; and

                     (b)  the making of an entry for the unit in the Registry account.

108   Domestic transfers of Kyoto units

             (1)  If a person (the first person ) is the registered holder of one or more Kyoto units, the person may, by electronic notice transmitted to the Authority, instruct the Authority to transfer the units from the relevant Registry account kept by the person (the first Registry account ) to:

                     (a)  a Registry account kept by another person; or

                     (b)  another Registry account kept by the first person.

             (2)  An instruction under subsection (1) must set out:

                     (a)  the account number of the first Registry account; and

                     (b)  the account number of the Registry account mentioned in paragraph (1)(a) or (b); and

                     (c)  such other information as is specified in the regulations.

Compliance with instruction

             (3)  If the Authority receives an instruction under subsection (1):

                     (a)  if the Authority is satisfied that giving effect to the instruction would breach:

                              (i)  regulations made for the purposes of section 112 (Kyoto rules); or

                             (ii)  regulations made for the purposes of section 114 (commitment period reserve); or

                            (iii)  regulations made for the purposes of section 116A (Commonwealth Registry accounts);

                            the Authority must, by written notice given to the first person, refuse to give effect to the instruction; and

                     (b)  if paragraph (a) does not apply—the Authority must give effect to the instruction as soon as practicable after receiving it.

             (4)  If the Authority gives effect to an instruction under subsection (1), the Registry must set out a record of the instruction.

             (5)  If the first person is the Commonwealth, the Minister may give an instruction under subsection (1) on behalf of the first person.

109   Outgoing international transfers of Kyoto units

             (1)  If:

                     (a)  there is in force a declaration under section 111 that Australia is in compliance with the emissions trading eligibility requirements under the Kyoto rules; and

                     (b)  a person (the first person ) is the registered holder of one or more Kyoto units;

the person may, by electronic notice transmitted to the Authority, instruct the Authority to transfer the units from the relevant Registry account kept by the person (the first Registry account ) to:

                     (c)  a foreign account kept by another person; or

                     (d)  a foreign account kept by the first person.

             (2)  An instruction under subsection (1) must set out:

                     (a)  the account number of the relevant Registry account kept by the first person; and

                     (b)  such other information as is specified in the regulations.

Compliance with instruction

             (3)  If the Authority receives an instruction under subsection (1):

                     (a)  if the Authority is satisfied that giving effect to the instruction would breach:

                              (i)  regulations made for the purposes of section 112 (Kyoto rules); or

                             (ii)  regulations made for the purposes of section 114 (commitment period reserve);

                            the Authority must, by written notice given to the first person, refuse to give effect to the instruction; and

                     (b)  if paragraph (a) does not apply—the Authority must take such steps as are required by regulations made for the purposes of section 112.

             (4)  Regulations made for the purposes of section 112 may require the Authority to remove the entry for the unit or units from the relevant Registry account.

             (5)  Subsection (4) does not limit section 112.

             (6)  If the Authority takes steps under paragraph (3)(b) in relation to an instruction, the Registry must set out a record of the instruction.

             (7)  If the first person is the Commonwealth, the Minister may give an instruction under subsection (1) on behalf of the first person.

110   Incoming international transfers of Kyoto units

             (1)  If:

                     (a)  there is in force a declaration under section 111 that Australia is in compliance with the emissions trading eligibility requirements under the Kyoto rules; and

                     (b)  the international transaction log forwards to the Authority an instruction for the transfer of a Kyoto unit from a foreign account; and

                     (c)  the Kyoto unit is not specified in the regulations as a unit that cannot be transferred to a Registry account; and

                     (d)  making an entry for the Kyoto unit in the relevant Registry account would not breach regulations made for the purposes of section 112 (Kyoto rules); and

                     (e)  making an entry for the Kyoto unit in the relevant Registry account would not breach regulations made for the purposes of section 116A (Commonwealth Registry accounts);

the Authority must make an entry for the Kyoto unit in the relevant Registry account.

Note:          For specification by class, see subsection 13(3) of the Legislative Instruments Act 2003 .

             (2)  However, the Authority may refuse to make an entry for the Kyoto unit in the relevant Registry account if the Authority has reasonable grounds to suspect that the instruction is fraudulent.

111   Compliance by Australia with emissions trading eligibility requirements under the Kyoto rules

Declaration

             (1)  If the Minister is satisfied that Australia is in compliance with the eligibility requirements mentioned in paragraph 2 of the Annex to Decision 11/CMP.1 of the Meeting of the Kyoto Parties, the Minister must, by writing, declare that Australia is in compliance with the emissions trading eligibility requirements under the Kyoto rules.

Revocation of declaration

             (2)  If:

                     (a)  a declaration is in force under subsection (1); and

                     (b)  the Minister is not satisfied that Australia is in compliance with the eligibility requirements mentioned in paragraph 2 of the Annex to Decision 11/CMP.1 of the Meeting of the Kyoto Parties;

the Minister must, by writing, revoke the declaration.

Declaration or revocation is not a legislative instrument

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

112   Kyoto rules

             (1)  The regulations may make provision for, or in relation to, giving effect to the Kyoto rules, so far as the Kyoto rules relate to:

                     (a)  the transfer of a Kyoto unit from a Registry account to a foreign account; or

                     (b)  the transfer of a Kyoto unit from a foreign account to a Registry account; or

                     (c)  the transfer of a Kyoto unit from a Registry account to a Commonwealth Registry account; or

                     (d)  the issue of a Kyoto unit.

             (2)  Regulations made for the purposes of subsection (1) may:

                     (a)  prevent, restrict or limit the transfer of Kyoto units from a Registry account to:

                              (i)  a foreign account; or

                             (ii)  a voluntary cancellation account; or

                     (b)  prevent, restrict or limit the transfer of Kyoto units from a foreign account to a Registry account.

             (3)  Subsection (2) does not limit subsection (1).

113   Carry-over restrictions

Kyoto units for which carry-over is permitted

             (1)  The regulations may make provision for, or in relation to, the following matters:

                     (a)  the identification of:

                              (i)  assigned amount units in Registry accounts; or

                             (ii)  certified emission reductions (other than temporary certified emission reductions or long-term certified emission reductions) in Registry accounts; or

                            (iii)  emission reduction units (other than emission reduction units that have been converted from removal units) in Registry accounts;

                            as Kyoto units for which carry-over is permitted subject to such limits or restrictions (if any) as are specified in the regulations;

                     (b)  the procedures for the carry-over of such Kyoto units;

                     (c)  requiring the Authority to transfer from the relevant Registry account to a mandatory cancellation account any such Kyoto units that have not been carried over in accordance with those procedures;

                     (d)  prohibiting the surrender of any or all such Kyoto units during a period ascertained in accordance with the regulations.

Kyoto units for which carry-over is not permitted

             (2)  The regulations may make provision for, or in relation to, the following matters:

                     (a)  the identification of Kyoto units for which carry-over is not permitted;

                     (b)  requiring the Authority to transfer from the relevant Registry account to a mandatory cancellation account any such Kyoto units held in the Registry account at a time ascertained in accordance with the regulations;

                     (c)  prohibiting the surrender of any such Kyoto units after a time ascertained in accordance with the regulations.

             (3)  Regulations made for the purposes of paragraph (2)(a) must identify the following units issued in relation to the relevant commitment period as units for which carry-over is not permitted:

                     (a)  removal units;

                     (b)  temporary certified emission reductions;

                     (c)  long-term certified emission reductions;

                     (d)  emission reduction units that have been converted from removal units.

Kyoto rules

             (4)  Regulations made for the purposes of this section must not be inconsistent with the Kyoto rules.

114   Commitment period reserve

             (1)  The regulations may make provision for, or in relation to, the management of Australia’s commitment period reserve.

             (2)  Regulations made for the purposes of subsection (1) may prevent, restrict or limit the transfer of Kyoto units from a Registry account to:

                     (a)  a foreign account; or

                     (b)  a voluntary cancellation account.

115   Cancellation of temporary certified emission reductions or long-term certified emission reductions

Scope

             (1)  This section applies if:

                     (a)  a person is the holder of a Registry account in which there is an entry for a temporary certified emission reduction or a long-term certified emission reduction; and

                     (b)  the temporary certified emission reduction or long-term certified emission reduction expires.

Transfer to mandatory cancellation account

             (2)  The Authority must, in accordance with the regulations, transfer the temporary certified emission reduction or long-term certified emission reduction to a mandatory cancellation account.

116   Replacement of long-term certified emission reductions

Scope

             (1)  This section applies if:

                     (a)  a person is the holder of a Registry account in which there is an entry for a long-term certified emission reduction; and

                     (b)  under the regulations, the person is required to replace the long-term certified emission reduction by a particular time ascertained in accordance with the regulations; and

                     (c)  the person breaches that requirement.

Transfer to mandatory cancellation account

             (2)  The Authority must, in accordance with the regulations, transfer the long-term certified emission reduction to a mandatory cancellation account.

Replacement of long-term certified emission reduction

             (3)  For the purposes of this section, if a long-term certified emission reduction relates to a clean development mechanism project, the replacement by the person of the long-term certified emission reduction consists of instructing the Authority under section 108 to transfer:

                     (a)  an assigned amount unit; or

                     (b)  a removal unit; or

                     (c)  an emission reduction unit; or

                     (d)  a certified emission reduction (other than a temporary certified emission reduction or a long-term certified emission reduction); or

                     (e)  a long-term certified emission reduction relating to the project;

from a Registry account kept by the person to whichever of the following accounts is taken, under the regulations, to be the appropriate account:

                      (f)  the long-term certified emission reduction replacement (storage reversal) account;

                     (g)  the long-term certified emission reduction replacement (non-certification) account.

Identification of long-term certified emission reductions for which replacement is required

             (4)  Regulations made for the purposes of paragraph (1)(b) may make provision for, or in relation to, the identification of long-term certified emission reductions for which replacement is required.

116A   Restrictions on transfer of Kyoto units to a Commonwealth Registry account

                   The regulations may prevent, restrict or limit the transfer of Kyoto units from:

                     (a)  a Registry account; or

                     (b)  a foreign account;

to a Commonwealth Registry account.

116B   A registered Kyoto unit is personal property for certain purposes

Scope

             (1)  This section applies if there is an entry for a Kyoto unit in a Registry account.

Personal property

             (2)  For each of the following purposes:

                     (a)  the purposes of the Bankruptcy Act 1966 ;

                     (b)  the purposes of Chapter 5 of the Corporations Act 2001 ;

                     (c)  the purposes of the law relating to wills, intestacy and deceased estates;

                     (d)  a prescribed purpose;

the unit is personal property and, subject to section 116C, is transmissible by will and by devolution by operation of law.

116C   Transmission of registered Kyoto units by operation of law etc.

Scope

             (1)  This section applies if:

                     (a)  under section 116B, a Kyoto unit is personal property for a particular purpose; and

                     (b)  the unit is transmitted from a person (the transferor ) to another person (the transferee ) by any lawful means for that purpose.

Declaration of transmission

             (2)  The transferee must, within 14 days after the transmission, give the Authority:

                     (a)  a declaration of transmission; and

                     (b)  such evidence of transmission as is specified in the regulations.

             (3)  A declaration of transmission must be made in accordance with the regulations.

             (4)  If the transferee does not already have a Registry account, the declaration of transmission must be accompanied by a request under section 147 for the Authority to open a Registry account in the name of the transferee.

             (5)  If the Authority is satisfied that special circumstances warrant the extension of the 14-day period mentioned in subsection (2), the Authority may extend that period.

Transfer of unit—transferee already has a Registry account

             (6)  If the transferee already has a Registry account, the Authority must, as soon as practicable after receiving the declaration of transmission, transfer the unit from the relevant Registry account kept by the transferor to a Registry account kept by the transferee.

Transfer of unit—transferee does not have a Registry account

             (7)  If:

                     (a)  the transferee does not already have a Registry account; and

                     (b)  in accordance with the request under section 147, the Authority has opened a Registry account in the name of the transferee;

the Authority must, as soon as practicable after opening the Registry account, transfer the unit from the relevant Registry account kept by the transferor to the Registry account kept by the transferee.

Record

             (8)  If the Authority transfers the unit under subsection (6) or (7), the Registry must set out a record of the declaration of transmission.

When the transferee is the Commonwealth

             (9)  If the transferee is the Commonwealth, the Minister may give:

                     (a)  the declaration of transmission; and

                     (b)  the evidence mentioned in paragraph (2)(b);

on behalf of the transferee.



 

Division 4 Non-Kyoto international emissions units

117   Entries for non-Kyoto international emissions units

                   An entry for a non-Kyoto international emissions unit in a Registry account is to consist of the serial number (however described) of the unit.

118   Transfer of non-Kyoto international emissions units

             (1)  For the purposes of this Act, if there is an entry for a non-Kyoto international emissions unit in a Registry account (the first Registry account ) kept by a person (the first person ):

                     (a)  a transfer of the unit from the first Registry account to a Registry account kept by another person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the Registry account kept by the other person; and

                     (b)  the transfer of the unit from the first Registry account to another Registry account kept by the first person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the other Registry account kept by the first person; and

                     (c)  the transfer of the unit from the first Registry account to a foreign account kept by another person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the foreign account kept by the other person; and

                     (d)  the transfer of the unit from the first Registry account to a foreign account kept by the first person consists of:

                              (i)  the removal of the entry for the unit from the first Registry account; and

                             (ii)  the making of an entry for the unit in the foreign account kept by the first person.

             (2)  For the purposes of this Act, if there is an entry for a non-Kyoto international emissions unit in a foreign account, a transfer of the unit from the foreign account to a Registry account consists of:

                     (a)  the removal of the entry for the unit from the foreign account; and

                     (b)  the making of an entry for the unit in the Registry account.

119   Domestic transfers of non-Kyoto international emissions units

             (1)  If a person (the first person ) is the registered holder of one or more non-Kyoto international emissions units, the person may, by electronic notice transmitted to the Authority, instruct the Authority to transfer the units from the relevant Registry account kept by the person (the first Registry account ) to:

                     (a)  a Registry account kept by another person; or

                     (b)  another Registry account kept by the first person.

             (2)  An instruction under subsection (1) must set out:

                     (a)  the account number of the first Registry account; and

                     (b)  the account number of the Registry account mentioned in paragraph (1)(a) or (b); and

                     (c)  such other information as is specified in the regulations.

Compliance with instruction

             (3)  If:

                     (a)  the Authority receives an instruction under subsection (1); and

                     (b)  the conditions (if any) specified in the regulations are satisfied;

the Authority must give effect to the instruction as soon as practicable after receiving it.

             (4)  If the Authority gives effect to an instruction under subsection (1), the Registry must set out a record of the instruction.

             (5)  If the first person is the Commonwealth, the Minister may give an instruction under subsection (1) on behalf of the first person.

120   Outgoing international transfers of non-Kyoto international emissions units

             (1)  If a person (the first person ) is the registered holder of one or more non-Kyoto international emissions units, the person may, by electronic notice transmitted to the Authority, instruct the Authority to transfer the units from the relevant Registry account kept by the person (the first Registry account ) to:

                     (a)  a foreign account kept by another person; or

                     (b)  a foreign account kept by the first person.

             (2)  An instruction under subsection (1) must set out:

                     (a)  the account number of the relevant Registry account kept by the first person; and

                     (b)  such other information as is specified in the regulations.

Compliance with instruction

             (3)  If:

                     (a)  the Authority receives an instruction under subsection (1); and

                     (b)  the conditions (if any) specified in the regulations are satisfied;

the Authority must take such steps as are required by the regulations.

             (4)  Regulations made for the purposes of subsection (3) may require the Authority to remove the entry for the unit or units from the relevant Registry account.

             (5)  Subsection (4) does not limit subsection (3).

             (6)  If the Authority takes steps under subsection (3) in relation to an instruction, the Registry must set out a record of the instruction.

             (7)  If the first person is the Commonwealth, the Minister may give an instruction under subsection (1) on behalf of the first person.

121   Incoming international transfers of non-Kyoto international emissions units

             (1)  If:

                     (a)  the Authority receives an instruction for the transfer of a non-Kyoto international emissions unit from a foreign account; and

                     (b)  the conditions (if any) specified in the regulations are satisfied;

the Authority must make an entry for the non-Kyoto international emissions unit in the relevant Registry account.

             (2)  However, the Authority may refuse to make an entry for the non-Kyoto international emissions unit in the relevant Registry account if the Authority has reasonable grounds to suspect that the instruction is fraudulent.

122   Surrender restrictions

                   The regulations may make provision for, or in relation to, prohibiting the surrender of non-Kyoto international emissions units.

122A   A registered non-Kyoto international emissions unit is personal property for certain purposes

Scope

             (1)  This section applies if there is an entry for a non-Kyoto international emissions unit in a Registry account.

Personal property

             (2)  For each of the following purposes:

                     (a)  the purposes of the Bankruptcy Act 1966 ;

                     (b)  the purposes of Chapter 5 of the Corporations Act 2001 ;

                     (c)  the purposes of the law relating to wills, intestacy and deceased estates;

                     (d)  a prescribed purpose;

the unit is personal property and, subject to section 122B, is transmissible by will and by devolution by operation of law.

122B   Transmission of registered non-Kyoto international emissions units by operation of law etc.

Scope

             (1)  This section applies if:

                     (a)  under section 122A, a non-Kyoto international emissions unit is personal property for a particular purpose; and

                     (b)  the unit is transmitted from a person (the transferor ) to another person (the transferee ) by any lawful means for that purpose.

Declaration of transmission

             (2)  The transferee must, within 14 days after the transmission, give the Authority:

                     (a)  a declaration of transmission; and

                     (b)  such evidence of transmission as is specified in the regulations.

             (3)  A declaration of transmission must be made in accordance with the regulations.

             (4)  If the transferee does not already have a Registry account, the declaration of transmission must be accompanied by a request under section 147 for the Authority to open a Registry account in the name of the transferee.

             (5)  If the Authority is satisfied that special circumstances warrant the extension of the 14-day period mentioned in subsection (2), the Authority may extend that period.

Transfer of unit—transferee already has a Registry account

             (6)  If the transferee already has a Registry account, the Authority must, as soon as practicable after receiving the declaration of transmission, transfer the unit from the relevant Registry account kept by the transferor to a Registry account kept by the transferee.

Transfer of unit—transferee does not have a Registry account

             (7)  If:

                     (a)  the transferee does not already have a Registry account; and

                     (b)  in accordance with the request under section 147, the Authority has opened a Registry account in the name of the transferee;

the Authority must, as soon as practicable after opening the Registry account, transfer the unit from the relevant Registry account kept by the transferor to the Registry account kept by the transferee.

Record

             (8)  If the Authority transfers the unit under subsection (6) or (7), the Registry must set out a record of the declaration of transmission.

When the transferee is the Commonwealth

             (9)  If the transferee is the Commonwealth, the Minister may give:

                     (a)  the declaration of transmission; and

                     (b)  the evidence mentioned in paragraph (2)(b);

on behalf of the transferee.

123   Regulations about non-Kyoto international emissions units

                   The regulations may make further provision in relation to non-Kyoto international emissions units.