25 kt CO2-e threshold does not include liquid fuels

13 Jul 2011Archived News Climate Change Matters

Following consultation with Minister Combet's office, Energetics has been informed that all liquid fuels (transport and stationary) currently covered by the fuel excise arrangements, will not be included in the calculation of the 25kt CO2-e scope 1 facility threshold.

Liquid fuels will face amendments to fuel tax credits. At this stage examples include petrol, diesel, heating oil, kerosene, fuel oil, LNG, LPG and CNG.

What does this mean for you?

  • Review your Scope 1 emissions excluding any emissions from liquid fuels
  • Determine which facilities are liable
  • You will still be subjected to an effective carbon price through amendments to fuel tax credits, specifically "transport fuels.

Energetics will provide you with specific details on the liquid fuels included in the threshold later in the month. Remember that biofuels are excluded from the scheme.

What about my gas supply?

  • Natural gas retailers will be responsible for emissions from the use of natural gas by their customers
  • Natural gas will increase by $1.37/GJ – an increase of 15-20%
  • Natural gas buyers will need to review contracts of sale for carbon pass through as the retailers will be required to purchase permits upstream and incorporate it into their sale price.
  • Natural gas retailers may also be forced to sell to large users with no permits through the use of an obligation transfer number. As a transitional arrangement, retailers will be required to accept an OTN quotation where natural gas is supplied under a contract entered into before the Royal Assent to the legislation and where the natural gas is to be used as a feedstock or where more than 25,000 tonnes of CO2-e per year are attributable to the natural gas supplied under those contracts.

The Department has published a clarification fact sheet on their website Click here for further details.

Energetics can assist with the identification of your liabilities and impact through your supply chain. 

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Dr Peter Holt

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