Grants for energy assessments and gas efficiency

(new program – opening September 2017)

Surging prices have created huge increases in gas costs for Victorian businesses.  Manufacturers and other energy intensive businesses are all feeling the pain and are looking for savings.  Whilst the national policy debate continues some assistance to Victorian businesses is at hand.  Sustainability Victoria has a suite of grants aimed at helping Victorian businesses (of any size) reduce their gas consumption and energy costs.  The grants cover:


Subsidy Value (capped)

Gas efficiency (new)


Energy usage assessments
+ implementation


Materials efficiency


Energy efficiency capability

Subsidised training

Sustainable Finance Service

Finance facilitation between tenants and landlords

The suite of assistance aims at helping businesses stay competitive and create permanent savings from reduced energy consumption.  The grants and benefits are of sufficient scale to make the application worth the effort. Ndevr Environmental has navigated the Sustainability Victoria programs to show what is on offer – above

Summary of grants

Combine subsidies and focus effort to maximise energy savings

The opportunity to combine an energy assessment with a gas efficiency grant is especially appealing.  Undertaking the energy assessment first ensures that you focus on those projects that deliver the most cost-effective savings. It may be just the right time to have an independent expert run their trained eye over your operations to identify savings to be had along with those you already know about.  Energy usage assessment grants that match funding up to $15K + $3K for implementation makes that analysis more affordable. 

Eligibility Criteria – Detailed Efficiency Assessment and Gas Efficiency Grant  

Are your stationery and on-site energy bills over $50K?    You may already have a project in mind or are looking for ideas.  Ndevr Environmental can help you prioritise projects, develop the business case and ensure you have a strong application for the gas efficiency grants. The Gas Efficiency Grants program is likely to open in September 2017. If you would like to stay in the loop and/or kick-off with a subsidised detailed energy assessment (Level 2), please contact us directly.



Published in Blog

Currently, certain large energy users are excluded from the Victorian Energy Efficiency Target (VEET) scheme, but this is may change from as early as 1 January 2017. Public submissions regarding the proposed changes are open until 13 July 2016 – consultation documents, including the option paper for including large and users and proposed methods are available here.

The VEET scheme allows accredited businesses to offer discounts and deals on certain energy saving products and appliances (and soon project based activities). Accredited businesses monetise the energy savings by creating and selling Victorian Energy Efficiency Certificates (VEECs). Demand for the certificates is created through a legislated target, which requires energy retailers to purchase and surrender a certain number of certificates each year. The cost of purchasing certificates is typically passed on to end users by the retailer.

The exclusion of large energy users from generating energy efficiency certificates or creating a pass-through liability for energy retailers was originally provided to avoid duplication for companies covered by the Environment Protection Authority’s Environment and Resource Efficiency Plans (EREP) program, which ended in 2013. With the EREP program gone, the rationale for excluding large energy users from VEET no longer applies. Proposed changes to the VEET scheme will mean large energy users can create energy efficiency certificates, and will also be subject to increased electricity and gas prices associated with the pass through of retailer VEET liability costs.

Impact on big energy users

Key issues and potential impacts for currently excluded big energy users include:

  • Costs: when the exemption ends and therefore costs associated with retailer liability are passed on to the energy user, electricity and gas bills will likely increase by around 3-4%, based on our initial analysis

For energy retailers, the charges will reduce the administrative burden of identifying large energy users and removing their consumption from their annual Energy Acquisition Statements.

When will the changes begin?

The Victorian Department of Economic Development, Jobs, Transport and Resources has proposed two options for extending VEET to large energy users, the first being "immediate" full implementation from 1 January 2017, and the second being a gradual implementation starting 1 January 2017, providing an initial voluntary period until 2020.

  1. Immediate: 1 January 2017 - all large energy users can gain VEET incentives from 1 January 2017. The exclusion from creating liabilities for energy retails also ends 1 January 2017.

  2. Gradual: either 1 January 2020 or when the Large Energy User starts generating Victorian Energy Efficiency Certificates (VEECs) from prescribed energy saving activities, whichever is first. This options provides an initial voluntary period, where large energy users are eligible to generate certificates from 1 January 2017.

Key drivers for extending VEET to large energy users

 A number of drivers underpin the proposed changes, including:

  • The policy context has changed and there is no longer overlap with EREP program, which closed in 2013.
  • Access to VEET incentives may make energy efficiency improvements more economically viable for large energy users.
  • Including large energy users in the VEET scheme would increase the pool of energy efficiency opportunities available to generate certificates
  • Large energy users expressed an interest in being able to participate in the VEET scheme when the Department consulted on this issue in 2015
  • Energy retailers find it administratively burdensome to identify large energy users and remove their consumption from their annual Energy Acquisition Statements. Now that EREP program has closed, the list of excluded large energy users has also become outdated.

How will large energy users access VEET incentives?

Most large energy users have a variety of energy savings options available at their sites, which will need a customised approach to determine energy savings. To address this, three new draft methods for “Project Based Activities” (PBAs) have been developed. These draft methods are open for public comment until 13 July 2016.

Because only accredited persons can generate certificates, normally facilities implementing energy saving activities will realise VEET incentives through a discount passed on by the service provider, rather than by generating and selling certificates directly. The extent of benefits passed on to the consumer can vary widely depending on the service provider, so it is worthwhile investigating which service providers offer the best financial incentives for your business. That being said, a large consumer generating many VEECs may become an accredited person themselves. We’ve seen this in the NSW scheme where heavy industry can generate Energy Saving Certificates – which is a similar concept.

We encourage you to think carefully about what the cessation of the VEET exemption might mean for your business, including the operating costs and opportunities going forward. If you have any further questions, would like some assistance with your submissions, or would like to further discuss the implications of VEET for your business– please contact us directly.


Published in Blog
Monday, 18 January 2016 11:31

Safeguard Mechanism - What You Need to Know


The safeguard mechanism starts this year, and is designed to stop greenhouse gas emissions increasing above 'business as usual' for facilities with high direct emissions. If you’re wondering exactly what this means for your business, you’re not alone. That is why we’ve compiled the following safeguard mechanism “need-to-knows”. Whether you’re responsible for Greenhouse Gas and Energy Reporting, need to update your executive board on safeguard implications for your business, or just want to know more, you’ve come to the right place. This article addresses key questions businesses are asking about how the safeguard mechanism will apply to them, and provides a summary of “need-to- knows” to get you safeguard ready.


Key details:



The safeguard mechanism, beginning 1 July 2016, will apply economy-wide to facilities with direct emissions over 100,000 t CO2-e a year. A facility with scope 1 emissions greater than 100,000 t CO2-e is termed a ‘designated large facility’ and is covered by the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (“Safeguard Rule”).

The safeguard mechanism is the third part of the Australian Government’s Emissions Reduction Fund (ERF) Policy. The ERF includes: (1) a process to credit emissions reductions (2) a fund to purchase emissions reductions and (3) a safeguard mechanism to stop increases in emissions above business-as-usual levels elsewhere in the economy. The ERF is central to the Government’s Direct Action Plan to cut emissions to five per cent below 2000 levels by 2020.


Will the safeguard mechanism affect me?

If your company has operational control of a designated large facility they are a “responsible emitter” under the safeguard mechanism. Designated large facilities are those with scope 1 emission greater than 100,000 t CO2-e. As a responsible emitter under the safeguard mechanism, you will be required to keep your facility’s emissions equal to or below baseline levels. Your baseline provides the reference point against which your future performance will be monitored under the safeguard mechanism.


What do I have to do to comply with the safeguard mechanism?

The safeguard mechanism requires you to keep net emissions, which are actual emissions less offsets sold to Government or surrendered, below baseline levels. The safeguard mechanism includes a number of features to help you meet your baseline emissions obligations. These are briefly outlined below.

Identification of an appropriate baseline emission number - The baseline emission number for your facility is determined by taking into account your facility’s circumstances. Factors which are used to identify the baseline include: business as usual emissions prior to the commencement of the safeguard mechanism, improvements in your facility’s efficiency, increases in production and operations with inherently variable emissions (i.e. resource extraction).

Offsetting – If your Designated Large Facility’s actual emissions exceed the baseline, you can use Australian Carbon Credit Units (ACCUs) to offset emissions. (Note: the potential role of international carbon credits in the safeguard mechanism will be reviewed in 2017).

Multi‑year monitoring - Multiyear monitoring allows your Facility to exceed its baseline in one year, so long as average emissions over two or three years are below baseline. Responsible emitters can apply to the Regulator for a declared multi-year period where there is a reasonable expectation that a facility’s emissions will exceed its baseline.

Exceptional circumstances - an exemption would apply to your Facility if emissions were the result of exceptional circumstances, such as a natural disaster.


What happens if I fail to meet my safeguard mechanism obligations?

Taking into account the options for compliance listed above, If your company fails to keep its facility emissions below baseline levels, the Clean Energy Regulator may apply a range of discretionary, graduated enforcement options, including civil penalties.


How will my baseline be measured?

There are several approaches to measuring baseline, depending on your business’s circumstance. The default approach is to measure the baseline emissions number from historical National Greenhouse and Energy Reporting scheme (NGERs) data. The various approaches to measuring baselines are outlined below.

Baseline from Historical NGER Data

The simplest approach to identifying the baseline emissions number for designated large facilities is to use historical data reported under NGERs. Specifically, under this approach your baseline number will be taken from your highest reported scope 1 emissions between 2009-10 and 2013-14. This approach avoids new reporting obligations.


Company Delta reported the following scope 1 emissions for its Alpha Facility between 2009-10 and 2013-14. The highest reported scope 1 emissions within the time period is 210,200 t CO2-e reported for 2011-12. Therefore, 210,200 will be the default baseline emissions number for Alpha Facility.

Do I need to submit an application or audit for my historic baseline number?

If you have historically reported under NGERs, you do not need to apply for a Historical Baseline Number. Rather, the Regulator will provide your company with an Emissions Number Determination for each of your designated large facilities based on your NGERs reported emissions. If you would like to use a different approach to measuring your Baseline, you will need to notify the Regulator.


Baseline from Historic NGER Data


Reported emissions baseline determination

Application required:


Audit required:


Changes expected:

Planned review in 2017.


Alternative approaches to measuring your baseline are outlined below, and may require an audit report.


What if historic data is not appropriate to measure my facility's baseline?

The safeguard mechanism caters for a variety of circumstances that could affect your greenhouse gas emission numbers, including substantial facility expansion, incremental growth, the establishment of new facilities, inherent variability, external events and other circumstances where historical emissions are not representative of future expected emissions. These approaches are considered below against a number of frequently asked questions.


What if my emissions increase because production increases, do I have to pay?

Generally, you will not have to offset increasing emissions due to increasing production as long as your facility’s emissions intensity improves. Your emissions intensity is the volume of greenhouse gas emissions compared to the amount of finished product, and is a measure of your facility’s efficiency.

Options for measuring baselines for incremental and significant expansion are outlined below.


Baseline for incremental increase

If your production is increasing gradually and you can demonstrate an emissions intensity improvement, you can apply to the Regulator for a temporary variation of your baseline.

Your current emissions intensity will be compared to the emissions intensity associated with most recent baseline. Your application needs to be accompanied by an audit report.


Baseline variation for incremental increase


Variation of baseline determination for reduction in emissions intensity

Application required:


Audit required:


Changes expected:

Planned review in 2017.


What if we have significantly expanded our facility or have a new facility?

If your facility undergoes a significant, permanent expansion, you can apply to have your facility baseline permanently increased following the rules for establishing baselines for new investments (calculated emissions baseline approach). The significant expansion criteria includes an increase in maximum production capacity of more than 20 percent, and that the facility has exceeded its baseline or is reasonably expected to exceed its baseline in at least one year of the three-year period covered by the calculated-emissions baseline determination (i.e. the three years following expansion of your facility).

The approach for measuring baselines for new investments and significant expansions of existing facilities differs depending on whether the facility comes online before or after 2020. The different approaches are outlined below.

Before 1 July 2020, the new facility baseline number will be calculated based on estimates of production and emissions intensity at the facility. You will be required to provide an audited emissions forecast to the Regulator, after which the Regulator will issue you with a baseline determination. This baseline determination is temporary, and will expire when actual production data becomes available. At this time, the facility may be eligible to apply for a production adjusted baseline determination if actual production differs from forecast production.

From 1 July 2020, Baselines for new investments whose direct (scope 1) emissions exceed 100,000 tCO2-e will be set using benchmark emissions intensities. Best practice will be determined by comparing the relative performance of industry peers. Where available, existing industry data will be used to developing benchmark emissions intensities that are representative of best practice. Where data is limited or not adequately representative, international data or independent technical advice will help to define best practice. For significant expansions of existing facilities, this approach will only apply to the emissions associated with the expanded capacity such that the facility’s baseline would be the sum of its existing baseline and the benchmark baseline for the increased production resulting from the significant expansion.


Baseline for significant expansion or new facility


Calculated-emissions Baseline Determination

Application required:


Audit required:


Changes expected:

Best practice benchmark baseline to apply for new facilities post 2020


What if something outside our control impacts our emissions?

If your facility has experienced exceptional circumstances, such as a natural disaster or criminal activity which has caused increased emissions, you may be eligible for an exemption. If approved, the facility will be exempt from its safeguard obligation for a defined period of time. In assessing your application for exemption, the Regulator will consider whether reasonable steps were taken to mitigate the risk of excess emissions occurring from the exceptional event.

However, exemptions do not apply to circumstances reflecting normal market dynamics which may affect emissions variations, such as price, production inputs and outputs or maintenance. In such circumstances, other options, such as adjusted baseline for incremental increase in production (less than 20 percent), may be available.


My company’s operations in natural resources and reserves have inherently variable emissions, how will this affect my baseline emissions number?

The safeguard mechanism allows baselines to be adjusted for emissions variability associated with extracting natural resources or reserves. Operations in mining and oil and gas sectors can have highly variable emissions intensity, particularly fugitive emissions associated with resource extraction. In some circumstances, emissions may rise while production remains constant, for example as a mine moves from high to low grade extraction over the mine life. For this reason, in the period until 2025, facility operators can apply to vary baselines where:

  • The operation of a facility is associated with the extraction of a natural resource or reserve;
  • The properties of the resource or reserve have a direct effect on the emissions performance of a facility;
  • The facility has a limited ability to control for such emissions;
  • The facility has a calculated-emissions baseline or a reported-emissions baseline; and
  • Facility emissions have exceeded or are expected to exceed their baseline and the natural resource properties are the primary reason for this.

Baselines are adjusted using the calculated emissions baseline under the Safeguard Rule, where the Regulator may revise the facility baseline on an audited emission forecast provided by the facility operator.

It is worth noting that this approach to varying baselines will not be available after 2025, because new facilities covered by the safeguard mechanism after 1 July 2020 are expected to operate at best practice emissions intensity.


Varied baseline for natural resource operations


Calculated emissions baseline determination

Application required:


Audit required:


Changes expected:

Not available for new facilities post 2020



I don’t think my baseline is representative, what other options are there?

Baselines can be adjusted if facilities expect to exceed their baseline in the safeguard mechanism’s first year. The baseline will be increased to reflect forecast emissions, using the calculated emissions baseline approach, similarly to the approach for new investments or significant expansion of a facility covered by the safeguard mechanism before 2020.


How is the Electricity Sector/Generators treated under the safeguard mechanism?

A sectoral-baseline, equal to 198 million tonnes CO2-e, applies to all grid-connected electricity generators. This baseline is the total scope 1 emissions from grid-connected generators in 2009-10. Individual baselines will also apply if the sectoral baseline is exceeded.

If the sectoral baseline is exceeded in a given year, the Regulator will publish a statement on its website. Individual grid connected generators will not be covered up to and including the year that the Regulator states sectoral baseline emissions have been exceeded.

Individual baselines will be set at each facility’s highest annual covered emissions between 2009-10 and 2013-14. Generators will have access to the same emissions management options as facilities in other sectors, as well as similar baseline adjustments to accommodate economic growth.

The treatment of the electricity sector under the safeguard mechanism will be reviewed in 2017. While some have suggested an emissions intensity baseline should be set for the electricity sector, it is unclear whether this will be considered under the 2017 review.



Do I have to register for the safeguard mechanism?

If you are already reporting your annual emissions under the NGER Act you do not need to register again under the safeguard mechanism.

If you are a responsible emitter with operational control of a safeguard facility, and are not already registered under the NGER Act, you need to register in line with section 15B of the NGER Act.


Do I have to report under the safeguard mechanism?

Companies already submitting reports under sections 19, 22G and 22X of the NGER Act will generally have their reporting requirements covered by the NGER Regulations, and will not have additional reporting requirements (See Safeguard Rule, Part 5). Some responsible emitters who are not controlling corporations under NGERs, such as trusts or non-constitutional corporations, will have new reporting obligations under section 22XB of the NGER Act.

Responsible Emitters should also report a change in principle activity for a facility, because the emissions may need to be attributed to a different industry sector. (See section 7 Safeguard Rule, regulation 4.31 NGER Regs).

It is advisable to review your reporting requirements to ensure ongoing compliance under the safeguard mechanism. As always, it is important that records are kept to monitor compliance, and kept in a way that is easily and quickly accessible for inspection and audit.


Will I need an audit?

If your company is satisfied that the historical baseline determined by NGER data is suitable, you will not be required to submit an application or an audit. However, to receive an alternatively measured baseline, you will need to submit an application and accompanying audit.

The summary table found at the end of this article draws on information from the Safeguard Rule Explanatory Statement to outline the different approaches to measuring baseline numbers, including whether an audit and application for a baseline determination is required.


Can I generate Australian Carbon Credit Units (ACCUs) at my facility if it is covered by the Safeguard Mechanism?

Yes, facilities covered by the safeguard mechanism can still participate in the ERF to generate ACCUs and enter a contract for purchase of ACCUs with the Government. However, to avoid double counting, ACCUs issued for abatement at the facility will be added on to the facility’s net emissions. For example if a facility emits 180,000 tCO2-e and creates 20,000 ACCUs that year, the net emissions number will be 200,000. For ACCUs generated at the Facility to be subtracted from the facility’s net emissions, they need to be returned directly to the Government, either by selling the ACCUs to the Government through the ERF auction and contract process, or by directly relinquished ACCUs to the Government. If the ACCUs generated from the facility are sold on the secondary market, the offsets transfers to a third party, and the emissions remain part of the facility net emissions number.

In some cases it will be beneficial for a company implementing an energy and emissions saving activity to generate ACCUs under the ERF, rather than immediately realising the resulting emissions reductions against their baseline. Generating ACCUs will give an organisation flexibility as ACCUs can be ‘banked’ and used when needed, or monetized to generate revenue for your organization. Importantly, you may be able to generate your own ACCUs at a lower cost than they could be purchased on the secondary market at a later point in time. The table below summarises options for facilities that generate ACCUs under the ERF, including how the approach affects the facility’s net emissions number.


Options for facilities that create ACCUs under the ERF

‘Annual Safeguard Emissions Number’ equals:



  1. Sell ACCUs generated at facility to government through ERF auction

Scope 1 actual emissions from the facility less ACCUs generated and  sold to Government (note ACCUs must leave ANREU Account to be subtracted from net emissions number)

Avoid penalties and/or cost of purchasing offsets for exceeding the baseline and receive payment for the ACCUs from CER. Provides some flexibility as the seller sets the delivery schedule – annual or spot.

One buyer only (Government), may not receive best price for ACCUs, lose some flexibility as locked into delivery volume and timing defined in ERF contract. Generating ACCUs includes a cost to business (administrative/in-kind/specialist advisory/audits).

  1. Voluntarily surrender ACCUs to government -

Net scope 1 emissions from the facility excluding ACCUs generated and returned to government (net out ACCUs surrendered to Government)

Avoid penalties and/or cost of purchasing offsets for exceeding the baseline.


This option does not result in any payment for the ACCUs.

Generating ACCUs includes a cost to business.

  1. Sell ACCUs on secondary market (i.e. not to government)

Scope 1 actual emissions from the facility plus ACCUs  generated and sold on secondary market (accrue ACCUs generated and ACCUs sold)

Receive revenue for ACCUs sold on secondary market. More buyers, potentially better price. More flexibility on timing and volume assuming liquidity.

Does not reduce operating emissions against baseline

  1. Hold ACCUs in your account

Scope 1 actual emissions from the facility plus tonnes CO2-e represented by ACCUs held in account (accrue ACCUs held)

Increased flexibility. Use at a future date when the price for secondary market ACCUs is high and or annual safeguard emissions number is high and baseline cannot be adjusted.

Generating ACCUs includes a cost to business. No revenue flow from ACCUs.

  1. Do not create ACCUs, realise emissions savings in a reduced annual safeguard emissions number

Scope 1 actual emissions from the facility

No cost to business for generating ACCUs. Immediate improvement of performance against annual safeguard emissions number is realised.

No flexibility to bank offsets for future periods when secondary prices and/ or annual safeguard emissions numbers are high.


A range of methods for generating carbon credits under the ERF are now available for industry, and new methods are under development. A list of finalised methods by sector is available at the Department of Environment website.


I operate a Transport Facility, can I report facility emissions at a national level?

Yes, currently most transport facilities reported under NGERs are defined on a state basis. Under the safeguard mechanism, you will have the choice to define your transport facility on a national basis or retain state-based reporting. Whether it makes sense for you to aggregate your facility emissions will depend on your individual circumstances. To ensure the national definition takes effect for your transport facility, when the safeguard mechanism commences on 1 July 2016, you will need to make a nomination prior to scheme commencement.


I operate a waste management facility, are legacy and non-legacy waste measured separately?

Yes, similarly to the Carbon Pricing Mechanism, there is a policy to limit coverage of the safeguard mechanism to waste that is deposited at a landfill after 1 July 2016. This policy will be integrated in the National Greenhouse and Energy Reporting (Measurement) Determination 2008 which will ensure methods are available to measure legacy and non-legacy waste separately.


Is the safeguard mechanism likely to change?

The Safeguard Rule will be reviewed in 2017, and some changes may occur through this process. For example, Environment Minister Greg Hunt has recently stated that the 2017 review will include the establishment of processes to purchase international carbon credits, and that responsible emitters under the safeguard mechanism would have access to them.

The following elements are expected to be reviewed, with a report to be released in late 2017:

  • the operation of the safeguard mechanism in concert with the crediting and purchasing elements of the Emission Reduction Fund
  • the effectiveness of the baseline setting approach for new investments already underway
  • the transition to the best practice framework for new investments
  • any conditions and criteria for existing facilities to adjust baselines
  • the role of the crediting, purchasing and safeguard mechanism elements of the Emission Reduction Fund in conjunction with the broader suite of emission reduction policies to meet the 2030 target
  • An examination of how different sectors, including the electricity sector, are to be treated.


Summary of baseline measurement and requirements

The summary table below draws on information from the Safeguard Rule Explanatory Statement to summarise the different approaches to measuring baseline numbers, including key criteria, and whether an audit and application for a baseline determination is required.



How can I find out more?

This article provides general information only, and may exclude important information. Stakeholders should seek their own advice on how the rules apply to their individual circumstances. If you would like more information specific to your company’s circumstances, our dedicated and experienced team can assist you.

Our contact details are at:

If you would like further general information, or to review the Safeguard legislation and explanatory statement, you can visit the Australian Government Department of Environment website:


Published in Blog

The Department of Environment has just released a series of fact sheets for certain ERF methods. If you run an industrial facility and have some energy and carbon savings projects in mind, have a look at the following fact sheet as a first port of call. As of June 30 there are already two ERF projects registered under the recently released Industrial Fuel Energy Efficiency Method, and we're seeing more and more interest and opportunities on the ground as businesses look to monetise carbon and energy savings under the ERF. 

Click here to review the fact sheet and here to contact one of our ERF specialists on how the Method might work for your business.

Published in Blog