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Clean Energy Regulator: compliance and enforcement priorities explained

By Damian Roe and Alison McKee / 24 August 2022
5 min.
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Worthwhile read for: Land managers, carbon farmers, carbon project developers, agribusiness advisers

The Clean Energy Regulator (CER) has released its 2022-2023 compliance and enforcement priorities (priorities) which can be viewed here

CER administers Australian Government schemes for reporting and reducing Australia’s carbon emissions, including a number of climate change laws:

  • National Greenhouse and Energy Reporting scheme under the National Greenhouse and Energy Reporting Act 2007.
  • Emissions Reduction Fund under the Carbon Credits (Carbon Farming Initiative) Act 2011.
  • Renewable Energy Target under the Renewable Energy (Electricity) Act 2000.
  • Australian National Registry of Emissions Units under the Australian National Registry of Emissions Units Act 2011.

The priorities will apply to all participants across CER's schemes including:

  • National Greenhouse and Energy Reporting (NGER) scheme.
  • Emissions Reduction Fund.
  • Small-scale Renewable Energy Scheme.
  • Large-scale Renewable Energy Target.
  • Safeguard Mechanism.

1. What is the aim of the priorities?

The priorities detail where CER will be focusing its compliance and enforcement activities for 2022-2023. CER will target a number of areas of actual and potential non-compliance that pose a substantial risk to the integrity of the schemes that are administered by it. 

The ‘emerging priorities’ for 2022-2023 are:

  • Corporate Emissions Reduction Transparency (CERT) reports – this is a new disclosure initiative that allows companies to publicly report progress towards emissions reduction and renewable electricity commitments.
  • Emissions Reduction Fund – project participants with regeneration projects are required to undertake regular ‘regeneration checks’ to assess and demonstrate forest regeneration.
  • Renewable Energy Target – the importers or manufacturers of products used in solar photovoltaic technology and inverter ledgers who do not provide serial numbers, will have their products deemed ineligible and will not be able to obtain small-scale technology certificates (STC). Those solar retailers that provide false or misleading statements for STC claims will be deemed ineligible to participate in the Small-scale Renewable Energy Scheme and will not be able to sell systems that include STCs as incentives.
  • National Greenhouse and Energy Reporting (NGER) and safeguard mechanism – this priority aims to ensure that reporters in the oil and gas industry report consistently with legislative amendments applying from the 2021–22 reporting year. CER will ensure that technology and reporting requirements in further amendments for coal, gas and oil are adopted. 

The ’enduring priorities’ concern:

  • Ensuring that there is accuracy in Australian Carbon Credit Units (ACCUs) claims.
  • Scheme participants who submit late or inaccurate reports will be subject to further action such as having their applications for ACCUs refused, being required to relinquish ACCUs, or having a reassessment of their fit and proper person status to continue to participate in the scheme.
  • Reporters who have a history of submitting inaccurate, incomplete, or late reports (particularly where data underpins safeguard mechanism obligations) will have action taken against them by CER.
  • CER will deregister or suspend auditors who are non-compliant or who are not performing to the applicable standard. 

2. What are CER's compliance and enforcement powers?

CER monitors compliance with climate change laws to identify possible non-compliance and assess the education or enforcement required. CER has a broad range of compliance and enforcement powers (given to it under the relevant climate change legislation) that it may use, depending on the type and severity of the non-compliance including:

  • Civil penalties and infringement notices – the majority of the penalties in the climate change legislation are civil penalties which create a financial penalty and are not considered criminal offences or involve imprisonment. 
  • Criminal penalties – there are a number of provisions in the climate change legislation that impose a criminal penalty. These offences relate to behaviour that involves dishonest or fraudulent conduct or considerable harm to society, the environment, the schemes CER administers or the participants of the schemes.
  • CER has advised it will undertake legal action where it considers it is appropriate to do so for continuing or serious non-compliance. 

3. What do you need to do to ensure compliance?

The person or organisation to whom the relevant legislation, policy, or contract applies, has the responsibility for complying with the requirements for the relevant schemes administered by the CER. 

You might consider adopting the following for your organisation: 

  • Develop internal audit check lists that can be reviewed against the relevant legislation. 
  • Diarise due dates to ensure reporting is submitted in a timely manner.
  • Undertake quarterly reviews of all reporting submitted to ensure the data is accurate. 
  • Participate in CER’s education programs to stay informed of all changes in policy and law. 
  • Participate in workshops and joint discussions with CER in relation to your relevant scheme. 

Implementing systems such as the above, will ensure that your organisation can continue to meet the requirements of the relevant climate change legislation. As addressed, CER takes compliance very seriously, and any non-compliance or repeated non-compliance may result in significant civil and criminal penalties.

If you have any questions or would like to discuss your circumstances please contact our Resources and Energy team.  
 

Key Contacts
Damian Roe
Partner
Damian is a Partner of our leading Resources, Energy and Projects practice.
Alison McKee
Special Counsel
Alison is a Special Counsel in our leading Resources and Energy practice.

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