Your Grant Thornton climate change team have identified the following issues that businesses should now be considering in relation to the proposed Clean Energy legislation:
| Issue |
Description |
| Identification of primary liability under the proposed Clean Energy Legislation |
- Need to identify any “facilities” of the company as defined under the National Greenhouse Energy Reporting Act
- Need to identify the operator of any facilities of the company
- Need to determine the amount of emissions released by that facility that are covered by the Carbon Pricing Mechanism. If it is greater than 25,000 tonnes of carbon equivalent emissions per year, there is a registration requirement
- If there is no registration requirement, there is still an impact to the business as discussed below
|
| If the business has a primary liability under the Clean Energy Legislation |
- There is a need to identify the gross quantum of emissions and verify the accuracy of those emissions
- Need to assess whether any mitigation incentives are available (ie free carbon units) to reduce the primary liability
- Need to determine the indirect cost impact of supply chain into the business (such as electricity)
- Need to model the impact of the direct and indirect costs of the Clean Energy legislation
- Need to assess whether such costs can be passed onto customers either contractually or through market forces
|
| If the business does not have a direct impact or requirement to register |
- Need to determine the indirect cost impact of supply chain into the business (such as electricity)
- Need to determine whether any mitigation incentives are available to reduce the overall cost to the business
- Need to assess whether such costs can be passed onto customers either contractually or through market forces
|
| Need to determine the financial reporting and taxation impacts |
- Need to determine the appropriate accounting treatment for any carbon units acquired and surrendered
- As a result of the introduction of the draft legislation, there may be a need impair the value of affected assets
- Determine how greenhouse reporting needs to be included in any corporate governance framework
- Identify the corporate tax implications of the draft legislation, including cashflow impacts as a result of having to acquire carbon units
|
| Corporate governance |
- Need to identify who in the company has responsibility for greenhouse reporting
- Need to determine the validity of any emissions methodology and data
- Need to document appropriate reporting and documentation systems and processes
|
| Incentive identification |
- There is a need to understand whether any incentives are available for your business/industry
- If involved in the Clean Tech industry, how to benefit from the various grants and assistance packages for new technologies
|
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
E mark.azzopardi@au.gt.com
Tony Markwell (Business advisory enquiries)
National Head of Privately Held Business
T +61 7 3222 0291
E tony.markwell@au.gt.com
Andrew Archer (Audit and financial reporting enquiries)
National Head of Audit & Assurance
T +61 2 8297 2528
E andrew.archer@au.gt.com
Brian O'Meara (Enviornment and industry assistance enquiries)
Associate Director - Privately Held Business
T +61 3 8663 6257
E brian.omeara@au.gt.com
