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Production-adjusted baseline

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03 May 2019

NGER​​

​On 7 March 2019, amendments to the National Greenhouse and Energy Reporting (Safeguard Mechanism) Rule 2015 (the Safeguard Rule) came into effect. These amendments apply to baselines that commence from 1 July 2018. The information on this website has been updated to include the amendments to the safeguard mechanism. Refer to the Department of the Environment and Energy​​​ for more information about the development of the amendments.

This website includes references to prescribed (annually adjusted) and prescribed (fixed) production variables that are yet to be finalised by the Department of the Environment and Energy.

Applications will not be able to use prescribed production variables or default emissions intensities until they have been included in Schedules 2 and 3 of the Safeguard Rule.

For more information please contact the Clean Energy Regulator.

The application form required to apply for a production adjusted baseline is available on the National Greenhouse and Energy Reporting scheme forms and resources page.

Guidance is available to assist responsible emitters understand their obligations and the application and assurance requirements.

Applicants are encouraged to contact the Clean Energy Regulator on 1300 553 542 or via email, to discuss their application in advance of submission.

A production adjusted baseline can be made after or during a facility’s calculated baseline or benchmark baseline, using the production variables and emissions intensities set in the previous baseline. Existing facilities may also apply for a production adjusted baseline, without first applying for a calculated baseline, if they use prescribed production variables and the associated default emissions intensity values.

If a responsible emitter does not apply for a production adjusted baseline, a facility with a calculated or benchmark baseline will revert to the baseline determination that was previously in effect. This could be a reported baseline (before reported baselines cease on 1 July 2020) or a previous production adjusted baseline. In the event that a reported baseline has expired or there is no previous production adjusted emissions baseline, the facility’s baseline will revert to the default baseline emissions number of 100,000 tonnes carbon dioxide equivalent (t CO2-e).

Unlike a calculated baseline or benchmark baseline, a production adjusted baseline does not expire. It will continue to remain in effect until another baseline determination is made for the facility.

How a production adjusted baseline is set

In broad terms, production adjusted baselines are determined by multiplying actual production from a period by an emissions intensity value:

Production-adjusted baseline = actual production × emissions intensity

In practice, how this calculation is determined will depend on a number of factors, discussed below.

Emissions intensity

The emissions intensity that is used for a production adjusted baseline will depend on a facility’s particular circumstances.

A facility transitioning from a calculated baseline can choose to use either the emissions intensity used in making the previous calculated baseline or, if applicable, the relevant default emissions intensity (from Schedule 2 or 3 of the Safeguard Rule).

Facilities transitioning from a benchmark baseline must use the same emissions intensity that was used in the benchmark baseline (from Schedule 1 of the Safeguard Rule).

Facilities that don’t have a calculated or benchmark baseline must use prescribed production variables from Schedule 2 of the Safeguard Rule and also use the associated default emissions intensity values.

Production adjusted baselines that adjust annually

Where a facility uses a prescribed production variable that has been identified as suitable for annual adjustment, its production adjusted baseline will be set annually, based on actual production in each year. Prescribed (annually adjusted) production variables will be listed in Schedule 2 of the Safeguard Rule. Actual production will be reported as part of the facility’s standard NGER report. Each year, the facility’s baseline will be calculated by multiplying the reported amount of production by the relevant emissions intensity.

Production adjusted baselines that are fixed

All other production adjusted baselines will be fixed with actual production derived from the year with the highest level of actual production during the production assessment period. For a facility transitioning from a calculated baseline, the production assessment period is the period that the calculated baseline was in force. These baselines will be calculated upon approval of the application and are then fixed.

Production adjusted baselines that include both fixed and annually adjusting components

Production adjusted baselines may also be set based on both actual production each year and actual production from the production assessment period. This occurs where a facility has multiple production variables where one or more are listed in Schedule 2 of the Safeguard Rule and must form part of an annually adjusting baseline, and the remaining production variables are not listed in Schedule 2 and therefore form part of a fixed baseline. One portion of the baseline is therefore calculated upon approval of the application (and fixed). The remaining portion of the baseline is calculated each year following the submission of production quantities for the reporting period. In any year, a facility’s total baseline will be the sum of these portions.

Applying for a production-adjusted baseline

Applications for a production adjusted baseline must be received between 1 July in the financial year the production adjusted baseline is to start, and 31 October, after the end of the first financial year to be covered by the baseline. This means that for a particular starting year there is a sixteen month window during which production adjusted baseline applications can be submitted.

Variations to a production adjusted baseline

Facilities with an existing production adjusted baseline may apply to vary that baseline if they produce a new prescribed (annually adjusted) production variable that was not included in the original production adjusted baseline. Such variations can be made even where the original production adjusted baseline did not include an annually adjusted production variable. Please contact the Clean Energy Regulator on 1300 553 542 or via email to discuss applying to vary a production adjusted baseline.

The Clean Energy Regulator may also vary a baseline (including a production adjusted baseline) for several other reasons, including where a facility restructures or ceases a particular activity.

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