Safeguard Mechanism – important date approaches for calculated baselines

31 May 2016Archived News Jody Asquith Climate Change Matters

This week, the Clean Energy Regulator started issuing Reported Baselines to existing facilities expected to be captured under the Safeguard Mechanism. The reported baseline is equal to the highest total annual covered (scope 1) emissions that the facility reported under NGER in the five year period, 2009/10 to 2013/14. Facilities need to keep their net1 annual emissions below their Reported Baseline, which is ongoing unless replaced by another baseline. 

However, where a facility expects to exceed their Reported Baseline, they are able to apply for a Calculated Baseline in certain circumstances:

Significant expansion – where new equipment is installed that either increases production capacity by at least 20%, or results in a new product line, or generates at least 30% of onsite electricity needs

Inherent emissions variability – applies to mining and oil and gas sectors where the properties of the resource have a direct effect on the scope 1 emissions (e.g. varying greenhouse gas content, deeper pits/longer haul roads, etc)

Initial calculated baseline – applies to a facility who expects to exceed their reported baseline in the first year of the Safeguard Mechanism (FY2016/17)

A calculated baseline is based on an emissions forecast and will generally apply for three years. New facilities that are expecting to exceed the 100ktCO2-e threshold for a facility to be covered by the Safeguard Mechanism within the next four years will also need to apply for a calculated baseline.

A facility that wants to apply for a calculated baseline and forecasts that 2016-17 will be the year when production is highest, needs to submit their application to the CER by 30 July 2016.  

The application needs to be accompanied by an audit report signed off by a category 2 Registered Greenhouse and Energy Auditor. Where the calculated baseline will be determined by 2017-18 “production variables” (ie production is expected to be highest in 2017-18), the application needs to be submitted by 30 July 2017.

Energetics can help by:

● Reviewing and helping you understand your reported baseline

● Generating emissions forecasts, based on your production forecasts and advising on strategies for applying for calculated baselines

● Assisting in compiling applications for calculated baselines

● Conducting assurance audits of calculated baseline applications (with our audit partners, BDO).

● Please contact any of our experts for further advice and assistance. 

[1] Actual covered emissions less Australian Carbon Credit Units (ACCUs) acquired and retired.

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