Who is the Regulator?
A new regulatory body, the Clean Energy Regulator will be established to administer the carbon pricing regime. The Clean Energy Regulator will have the powers to oversee:
- the Clean Energy Plan
- the Carbon Farming Initiative
- the National Greenhouse and Energy Reporting (“NGER”) system
- the Renewable Energy Target
- the National Registry of Emissions
What is the Regulator’s role
The Clean Energy Regulator will be independent from the government and its role will be limited to the administration of the legislation that may passed by the Parliament. As part of this administration role, the Clean Energy Regulator will be responsible for:
- enforcement of the Clean Energy legislation’s penalty provisions
- the auctioning of carbon units (ie carbon permits)
- allocating “free” carbon units to emission-intensive industries such as coal-fired power stations and certain trade exposed industries
- assessment of shortfalls in carbon units by entities for which a unit shortfall charge will be payable
- overseeing the trading of carbon units when the market based scheme is in place in 2015
- assessing the eligibility of carbon offset projects under the Carbon Farming Initiative provisions
- enforcing the reporting obligations for emissions, energy consumption and production under the NGERs regime
- accreditation of eligible renewable energy power stations including maintaining the register of Renewable Energy Certificates (REC’s)
What are the powers of the Regulator?
The Regulator has been given wide powers to promote compliance with the Clean Energy legislation. Such powers granted to the Regulator include:
- information gathering powers; the Regulator may issue a notice to any person, upon reasonable grounds, to provide information or documentation within 14 days that is relevant to the Clean Energy legislation. A person issued a notice must comply with it regardless of whether it might incriminate them or expose them to a penalty
- monitoring powers; the Regulator will have certain powers to enter the facilities to monitor activities carried out there that may be covered under the Clean Energy legislation
- enforcement powers; these are listed further below in relation to the penalty provisions.
What are the penalties available to the Regulator?
The penalty provisions available to the Regulator under the Clean Energy legislation are wide and varied and include:
- administrative and late payment penalties at the rate of 20% per annum of the shortfall amount. Where the penalty is not paid, the Regulator can issue infringement notices and take civil action through the courts to recover amounts
- civil and pecuniary penalties may be imposed for contraventions under the Clean Energy legislation such as failure to keep records, failure to report emissions, and misuse of the emissions trading mechanism. The amount of penalties available to the Regulator is up to $1.1m for a corporation and $220,000 for an individual.
- criminal offences can be sought by the Regulator in the case of dishonesty and fraudulent conduct. The maximum criminal penalty available is imprisonment for up to 10 years.
Such penalties can be imposed on either the corporation or the executive officers of the corporation in certain circumstances.
Please feel free to contact Grant Thornton’s climate change team or your usual Grant Thornton advisor if you require further details or have any questions.
Mark Azzopardi (Tax enquiries)
National Head of Tax
T +61 3 8663 6200
Tony Markwell (Business advisory enquiries)
National Head of Privately Held Business
T +61 7 3222 0291
Andrew Archer (Audit and financial reporting enquiries)
National Head of Audit & Assurance
T +61 2 8297 2528
Brian O'Meara (Enviornment and industry assistance enquiries)
Associate Director - Privately Held Business
T +61 3 8663 6257