Overview of the ACT Scheme

The Greenhouse Gas Abatement Scheme in the ACT commenced on 1 January 2005 and is currently legislated to remain in force until 2020. The Scheme works closely with the NSW Scheme, which came into operation on 1 January 2003 (www.greenhousegas.nsw.gov.au/ ).

The policy objectives of the Greenhouse Gas Abatement Scheme are to:

• reduce greenhouse gas emissions associated with the production and use of electricity; and
• develop and encourage activities to offset the production of greenhouse gas emissions.

The GGAS in the ACT forms part of the Territory’s commitment to reduce greenhouse gas emissions. A range of policy and program measures including GGAS constitute the ACT Government’s current climate change initiative .

The Scheme imposes mandatory greenhouse gas benchmarks on all ACT electricity retailers and certain other parties to abate the emission of greenhouse gases from the consumption of electricity in the ACT. These parties are referred to as benchmark participants. At present, the Scheme applies only to retail suppliers but potentially may include large electricity users who elect to manage their own benchmark.

The Scheme sets a Territory greenhouse gas benchmark expressed in tonnes of carbon dioxide equivalent (tCO₂-e) per capita. The level set for 2005 was 7.96 tonnes per capita. The benchmark was progressively reduced.  In 2007, the benchmark was 7.27 tonnes per capita. It will continue at this level until the Scheme ends in 2020. These benchmarks correspond to those adopted in NSW. The ACT greenhouse gas benchmarks (tCO₂-e per capita) from 2005 are shown in Figure 1.

Figure 1  ACT’s per capita greenhouse gas benchmarks for the electricity sector

The Territory’s per capita greenhouse gas benchmark for a given year is multiplied by the total Territory population for that year, as determined by the ICRC, to produce the annual electricity sector benchmark. This represents the total amount of greenhouse gas emissions allowable for the consumption of electricity in the ACT.

Benchmark participants are allocated a share of the electricity sector benchmark based on the level of their electricity sales as a proportion of the total Territory electricity demand.

Benchmark participants are required to reduce their emissions of greenhouse gases to the level of their greenhouse gas benchmark by offsetting their excess emissions through the surrender of abatement certificates created in either the ACT or NSW. These certificates are created by accredited abatement certificate providers and can be traded to benchmark participants. Under GGAS, benchmark participants can also claim credit for the surrender of Renewable Energy Certificates (RECs) under the Australian Government's Renewable Energy Target arrangements. Information on these arrangements is available through the Office of the Renewable Energy Regulator at:

• www.orer.gov.au

Abatement certificate providers abate the emission of greenhouse gases through eligible activities. They can achieve this through:

• reducing the greenhouse gas intensity of electricity generation;
• generating low emission intensity electricity;
• demand-side abatement activities which involve reducing consumption, or increasing the efficiency of the consumption of electricity; or
• carbon sequestration activities.

Undertaking eligible activities enables abatement certificate providers to create abatement certificates.

Benchmark participants must submit an Annual Greenhouse Gas Benchmark Statement to the ICRC by 18 March each year, or a later date agreed by the ICRC, to show how they have complied with their greenhouse benchmark for the previous compliance year. The statement details their emissions and any abatement certificates being surrendered to the ICRC to meet their greenhouse gas benchmark.

The ICRC will confirm whether the participant has achieved their benchmark or whether there is a greenhouse shortfall and a liability for a greenhouse penalty. Greenhouse shortfalls refer to excess emissions remaining after the surrender of abatement certificates, and attract a penalty per tCO₂-e (tonne of carbon dioxide equivalent). Information on current penalty levels is available at:

• ACT Greenhouse Gas Abatement Scheme Penalties 2005-2010 

A panel of Approved Auditors has been established by IPART to conduct investigations associated with accreditation. The panel is also certified to conduct pre- and post-regulation audits of abatement certificate creation and annual compliance reporting.

Abatement certificates can be traded between scheme participants. The creation, trade and surrender of abatement certificates are registered on the NSW Greenhouse Gas Abatement Scheme Registry maintained by IPART. The function of the registry is to track the ownership and status of certificates. Where a trade in certificates has occurred outside of the registry, whether bilaterally, through brokers or through other trading platforms, the change in ownership of those certificates is recorded on the registry. However, the registry is not a trading platform. For more information on the scheme registry please see the Registry  section.

A greenhouse shortfall can be carried forward to the following compliance year but must be abated by surrendering additional abatement certificates in that year or the greenhouse penalty must be paid. Participants can carry forward a shortfall of up to 10% of their greenhouse gas benchmark for all years of the scheme except 2007 (the first year to meet the 7.27 tonnes per capita level).

The Scheme imposes mandatory greenhouse gas benchmarks on all holders of ACT electricity retail licences. These are mandatory benchmark participants. The scheme also allows electricity users with electricity loads greater than 100 GWh to elect to manage their own greenhouse gas benchmarks (called elective benchmark participants).  At this stage, there are no elective benchmark participants in the ACT.

The key elements of the Greenhouse Gas Abatement Scheme in the ACT and their interactions are outlined in Figure 2.

Figure 2  Greenhouse Gas Abatement Scheme in the ACT

A Fact Sheet setting out the ACT Scheme’s key factors from 2005 is available below:

• Key Factors Fact Sheet 2005 -2010 (  )

Greenhouse Gas Abatement Certificates

The surrender of certificates to the Scheme Regulator (ICRC) is the means by which the benchmark participants will demonstrate their abatement of the greenhouse gas emissions and reach their individual greenhouse gas benchmark levels. Both the ACT and NSW use a single tradeable certificate (at present termed a NSW GGAS Abatement Certificate, or an NGAC for short).

One NGAC represents the abatement of one tonne of CO₂-e associated with the consumption of electricity in NSW and the ACT.

1 NGAC = 1 tC0₂-e

NGACs are transferable certificates created by accredited abatement certificate providers. 

In the ACT, NGACs can be created for the low-emission generation of electricity, and for other activities that result in reduced consumption of electricity.

Rules for calculating the emissions abated from the above activities in the ACT are discussed at Legislative Framework . The ACT has its own Compliance Rule but the other rules are the same as for the NSW GGAS.

Compliance with the Greenhouse Gas Benchmark

Each year benchmark participants are required to reduce their emissions of greenhouse gases to the level of their greenhouse gas benchmark. Where a benchmark participant’s emissions are above the benchmark, it must offset its excess emissions through the surrender of abatement certificates. Excess emissions after the surrender of abatement certificates are regarded as greenhouse shortfalls. These are liable to a greenhouse gas penalty. Information on penalties is at Legislative Framework .

A greenhouse shortfall can be carried forward to the following compliance year but must be abated in that year or the greenhouse penalty applying to the shortfall must be paid. Benchmark participants can carry forward a shortfall of up to 10% of their greenhouse gas benchmark in all years of the Scheme except 2007.

The Scheme also allows benchmark participants to count Renewable Energy Certificates (RECs) under the Australian Government Mandatory Renewable Energy Target (MRET) towards meeting their greenhouse gas benchmark. Only RECs surrendered to the Office of the Renewable Energy Regulator in respect to electricity sales in the ACT may be counted.

Compliance Process 

Benchmark participants must demonstrate compliance with greenhouse gas benchmarks and lodge an Annual Greenhouse Gas Benchmark Statement  with the ICRC by no later than 18 March of the year following a compliance year or a later date permitted by the ICRC. The ICRC is required to report to the Minister on the extent to which benchmark participants have complied (or failed to comply) with greenhouse gas benchmarks by 1 July of the year following the compliance year.

The Statement calculates a benchmark participant’s greenhouse gas benchmark, shortfall and liability (if any) for a greenhouse penalty.

Benchmark participants should refer to the Guide to Completing the Annual Greenhouse Gas Benchmark Statement  for Benchmark Participants in the ACT  before completing their statements.

Benchmark statements must be audited prior to submission to the ICRC. The Statement will not be considered to be in a form approved by the ICRC without an audit report attached.

Benchmark Participants Licensed in ACT and NSW

An ACT benchmark participant that is also a retail supplier under the NSW scheme may engage a single auditor to audit both jurisdiction's benchmark statements.  Auditors must be selected from IPART's Audit and Technical Services Panel, and must be authorised to undertake audits of Statements.  All panel members are listed on IPART's website at www.greenhousegas.nsw.gov.au .  The contract between the benchmark participant and the auditor, including the engagement process, must be consistent with IPART's Audit and Technical Services Panel Agreement. 

To streamline the audit process, IPART (the compliance regulator for the NSW GGAS) is the main point of contact on audit proposals covering both ACT and NSW Statements. Thus, the auditor should provide IPART with a single Detailed Scope of Works clearly indicating that it is for both the NSW and ACT Statements. The Detailed Scope of Works should include information about the audit scope, audit team and procedures.

Two Deed Polls will be required from the benchmark participant - one for the ACT (  ) and one for NSW.  The NSW Deed Poll is accessible on IPART’s greenhouse gas website (www.greenhousegas.nsw.gov.au ). A deed poll must be lodged with each compliance regulator, the ICRC and IPART, before the audit commences.

Separate audit reports are required for the ACT and NSW. The audit report for the ACT Statement must be addressed to the Senior Commissioner, ICRC. The audit report for the NSW Statement must be addressed to the Chairman of IPART.

IPART’s Audit Guideline, Audit Scope and Audit Report Template for Benchmark Statements set out the requirements for auditors and describe the audit arrangements and requirements for Audit Reports in detail. These documents are available on IPART’s greenhouse gas website at www.greenhousegas.nsw.gov.au .

Further Information

The Greenhouse Gas Abatement Scheme in the ACT is based on the Greenhouse Gas Abatement Scheme in operation in NSW. For detailed information about the NSW scheme see their website at www.greenhousegas.nsw.gov.au .

Features particular to the ACT Scheme are contained in this website.