The Facilities method is applicable to organisations currently reporting under the National Greenhouse & Energy Reporting Scheme (NGERS), and provides a high-level, activity-neutral framework to calculate abatement from facilities. It is functionally consistent with the intent of the Industrial Electricity and Fuel Efficiency (IEFE) method.
However, this method unlike other approved ERF methods has a new requirement to ensure that proposed abatement projects are additional to what would have occurred without the fund. Under the Facilities method, a person with operational control of the facility is required to submit a ‘Statement of activity intent’ to the Regulator stating that the abatement activities proposed would not be (or would not have been) implemented at the facility during the period in the absence of a declaration of the project as being eligible for offsets. For abatement projects expected to generate more than 100,000 tonnes annually this statement must be signed by the CFO. A false statement is a criminal offence.
The baseline period relevant to the Facilities method comprises the four consecutive NGER reporting years preceding the start of a project (ie the start of the crediting period). Within this period, the facility cannot have undergone a major change. The baseline emissions intensity is calculated by determining the lowest emissions intensity (total annual emissions divided by the total of the production variable) within the four year baseline period. The baseline emissions intensity is then valid for the entire 7-year crediting period and can only be recalculated if the facilities experiences a change which will have a material effect on the level of project abatement achieved in an NGER reporting year.
Projects established under the Facilities method can include:
- Replacing or modifying boilers,
- Improving control systems and processes,
- Waste heat capture and re-use,
- Upgrading turbines ,
- Improving the efficiency of motors, fans and pumps with high efficiency conversions,
- Installing variable speed drives,
- Improving compressed air processes,
- Reducing industrial process emissions,
- Behavioural changes,
- Installing low emissions-intensity electricity generation equipment, and
- Fuel switching.
Ineligible abatement activities include: activities that generate abatement by changing the level of a production variable; activities that result in an increase in excluded NGER fugitive emissions; and activities that decrease onsite emissions while increasing emissions outside the project boundary.
The determination does not apply to facilities which: do not produce an output (ie large shopping centres, storage warehouses), are transport facilities, are part of another offsets project; use biomass; are part of a facility aggregate.
Note: The determination does allow facilities to reduce emissions from transport within the facility if the facility is not a transport facility.
For further information, the methodology is available from the comlaw website: https://www.comlaw.gov.au/Details/F2015L01346 or feel free to contact us.
The ISO14001 Management System has been under review by ISO Committee ISO/TC207/SC1 since August 2011 and the final version is expected to be released September 2015. The ISO 14001 family of standards provides tools, for all kinds of companies and organisations looking to manage their environmental responsibilities.
The key changes to the revised standard will include:
- Introduction of new framework Annex SL (previously ISO Guide 83) - All new and revised ISO management system standards will adhere to this new framework, including ISO9001 and ISO50001, and will consist of 10 clauses as well as common terminology and definitions applicable to all new ISO Management system standards. Although initially documentation changes will be required, this will ultimately reduce the burden of management system documentation and instead focus on improved environmental performance.
- Life Cycle Perspective – organisations will need to consider environmental impacts associated with product use, sourcing of raw materials and end-of-life treatment or disposal.
- Environmental Performance -Focusing not only on continual improvement of the management system, but improved continual improvement of its environmental performance.
- Leadership – A new clause has been added which includes demonstrated leadership, commitment and accountability with respect to the environmental management system, and assigns specific responsibilities for those in leadership roles. These include: promoting the importance of an environmental management system (EMS), providing support to those who have environmental responsibility, and ensuring the EMS is incorporated into other business processes and activities.
- Compliance obligations – Increased compliance obligations where the organisation will be required to plan and implement a process to evaluate conformity and take action if needed. Organisations need to understand whether or not they are compliant with their legislative requirements and/or those they participate in voluntarily.
- Communication – The development of a communications strategy with equal emphasis on external and internal communications, including what, when and who they communicate to.
- Context of the Organisation - Strategic Environmental Management process including increased prominence of environmental management within the organisations strategic planning process addressing the risks and opportunities; i.e. understanding external, social or economic factors that may have an impact on the direction of the organisation, understanding its internal environment including technologies / culture, consideration of its natural environmental and risks that may impact on the organisations
Organisations will be granted a three-year transition period after the ISO14001:2015 revision is published to update their environmental management system. After this period the ISO14001:2004 standard will be out of date and for those companies seeking certification, will be required to use the 2015 version.
The final IS014001:2015 version should be made available mid-September for purchase. Companies are recommended to start the transitioning process by firstly conducting a gap assessment and determine where changes are required. Training on the updated standard is available at SAI Global.
For further information contact Katherine Simmons at Ndevr Environmental on 9865 1400.
The second Emissions Reduction Fund (ERF) auction is approaching - if you're preparing an ERF project, be sure to note the following dates in your diaries:
- The auction guidelines will be published this Friday 21 August 2015.
- Applications for new projects that wish to enter the auction need to be submitted in full by 18 September 2015 (note that there can be some back and forth with the Regulator, so try to get your application in as early as possible - incomplete submissions will not qualify).
- The second ERF auction for carbon abatement contracts will be on Wednesday 4 November and Thursday 5 November 2015.
The following table provides an overview of the three key steps for participating in the ERF auction. We are currently going through this process with a number of clients, so feel free to give us a call if you have any queries.
By submitting the auction qualification form (form), you will be making an offer to enter into a carbon abatement contract covering the project based on the Regulator's code of common terms and the commercial terms provided in the form.
The commercial terms will include:
must be received at least 20 business days before the auction date
Submit the auction registration form.
The delivery terms will comprise:
auction registration form must be received at least 5 business days before the date of the auction
To participate in the auction you must submit bids via Austender, the online bidding platform.
Within 5 business days of the closing time of the auction you will be notified of the auction results and, if you were successful, the contract will be established.
For more information see the Regulator Website http://www.cleanenergyregulator.gov.au/ERF/Want-to-participate-in-the-Emissions-Reduction-Fund/Step-2-Contracts-and-auctions/Auctions or contact us.
Also, keep an eye out for the auction guidelines to be published this Friday!
The recently released Reputex report “Recapping The Safeguard Mechanism – Toothless Tiger… Or Hidden Dragon?” has analysed the potential for the Federal Governments Direct Action policy to effectively manage Australia's emission growth. Their analysis concluded that the Safeguard Mechanism, as it currently stands, will cover approximately 80 companies and 261 facilities yet only approximately 85 facilities will actually be affected by any compliance obligation.
The report argues, nevertheless, that the Safeguard Mechanism, while currently ineffectual, has the potential to evolve to be more effective, with businesses with facilities covered by the scheme facing a significant compliance risk should this eventuate. In support of this, Environment Minister Greg Hunt is on record stating “…the safeguards (sic) mechanism … allows us to work with individual firms on a budget which can be adjusted and progressively tightened throughout the 2020s through to 2030 and 2040 and 2050.”
Furthermore, Reputex states, that the reality of tighter baselines or caps on greenhouse gas emissions either through an improved safeguard mechanism or another policy instrument, are inevitable given the necessity to manage Australia’s emissions growth and the potentially significant abatement task that may be required from Australia’s yet to be released post-2020 emissions targets.
Given this, businesses should prepare for the eventuality of a more stringent greenhouse gas policy.
The Clean Energy Regulator has announced the second Emissions Reduction Fund auction for carbon abatement contracts will be held on the 4th and 5th November 2015.
For those waiting for this announcement to move on registering their projects - time to get moving!
A number of projects have been registered during July under the new methods released since the first auction. The Clean Energy Regulator has said that new projects will only be eligible to participate in the auction if the completed project registration is received before Friday 18 September 2015.
Good luck to all registering proponents !
(Registration can take longer than you think so get started asap to avoid disappointment)