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Emissions-intensive trade-exposed activity information for companies

21 October 2020
RET

Contents

Companies that conduct eligible emissions-intensive trade-exposed (EITE) activities can apply for exemption certificates under the Renewable Energy Target (RET).

From 2020, applications for exemption certificates must be made through the Client Portal.

Companies issued an exemption certificate can trade it to obtain a benefit (usually lower electricity costs). The certificate can only be traded with the liable entity (usually their electricity retailer) specified on the certificate. The Clean Energy Regulator has no role in this negotiation.

Liable entities use exemption certificates to decrease the number of large-scale generation certificates (LGCs) and small-scale technology certificates (STCs) they must surrender to meet their RET obligations.

See EITE published information for a list of companies issued with exemption certificates and for the total certifiable amount by EITE activity.

Eligibility for an exemption certificate

You are eligible to apply for an EITE exemption certificate if you answer “Yes” to all these questions:

  1. Are you a prescribed person?
  2. Do you conduct an EITE activity?
  3. Do you produce a relevant product under an eligible EITE activity and does it meet the activity group definition, if applicable?
  4. Do you purchase liable electricity to produce your relevant product?
  5. Can you determine an electricity use amount formula based on meter readings?
  6. Can you complete a basis of preparation document for the use amount formula?
  7. Do you have accurate and relevant metering for your site?

The Renewable Energy (Electricity) Regulations 2001 (the Regulations) and the Department of Industry, Science, Energy and Resources Emissions-intensive trade-exposed activity boundaries document provides more information about exemption certificate eligibility.

More information to help determine if you are eligible:

Applying for exemption certificates

All applications and any subsequent amendments are submitted through the Client Portal. Each application is for one or more EITE activity and one or more liable entity providing electricity to the site.

Applications can be submitted from 1 August the previous year and must be made on or before 30 March for the calendar year they apply to. For example, if you want an exemption certificate for 2021 you can apply from 1 August 2020 and must apply on or before 30 March 2021.

The issued exemption certificate confirms your eligibility and describes how you calculate the certifiable amount. The certifiable amount is the amount of electricity used to produce the relevant product of the EITE activity for your nominated 12 month period. This 12 month period must be either a:

  • whole calendar year, or
  • 12 month period that uses not more than three months of the year before the application year.

For example, your nominated 12 month period may start on 1 January to 31 December or from 1 October and end on 30 September.

We recommend you seek independent legal advice and review the RET legislative requirements before applying. See Applying for an exemption certificate for application guidance.

Issuing exemption certificates and notice of certifiable amounts

Exemption certificates are issued within 60 days of application receipt or within 60 days after we receive additional information we request to complete an assessment.

Exemption certificates are issued for a calendar year. For example, if you applied on or before 30 March 2020, your exemption certificate relates to the 2020 calendar year.

Only one exemption certificate is issued to a site for one or more EITE activity. The exemption certificate can be divided between liable entities who supply electricity to the site.

Exemption certificates are issued through the Client Portal. The exemption certificate confirms eligibility under the legislation, and the use amount formula that determines the certifiable amount. This is the actual amount of exempt electricity in megawatt hours (MWh) for your nominated 12 month period.

At the end of your 12 month period, after you have provided the relevant data, you will receive a notice of certifiable amount that specifies the actual amount of electricity that you have consumed at the site for your relevant product. This notice, and the exemption certificate, allows the liable entity to decrease their relevant acquisitions of electricity when they complete their annual reporting requirements.

Amending exemption certificates

Issued exemption certificates can be amended by the applicant or the Clean Energy Regulator. Reasons include, adjustments that have occurred to the metering data or any changes at the site. Amendments can change the use amount formula that determines the certifiable amount in MWh. In this case, the data for or the notice of certifiable amount will need to be amended if it has been issued.

See Amending an exemption certificate for more information.

Activity groups

An activity group is where an EITE activity occurs over several sites. If an intermediate product is transferred between sites, as part of the production process, the sites may be an activity group as defined in sub regulation 22A(9) of the Regulations.

Where multiple EITE activities are carried out at a site you will need to specify if each activity is part of an activity group and which other sites form part of that activity group. For each activity confirm whether more than 80 per cent of the electricity used at the site is used for the purposes of carrying out the activity and provide an estimate of the amount of electricity used at each site.

In Section 8 of the exemption certificate application, the amount of relevant product needs to be reported as the total quantity of finalised product across all sites.

Prescribed person

Only a prescribed person can apply for an exemption certificate. Only one prescribed person can apply per EITE activity site.

You can be one of five prescribed person types defined in the Regulations:

  1. Regulation 22G – person with contract for supply of electricity to site. Typically, an applicant who has an electricity contract with an electricity retailer – current state.
  2. Regulation 22H – liable entity with operational control. Typically, an applicant that is a liable entity who has control of more than 30 percent of the electricity consumed at the site – current state.
  3. Regulation 22I – liable entity for future activity. Typically, an applicant that is a liable entity who has control of more than 30 percent of the electricity consumed at the site – future state.
  4. Regulation 22J – person with a new contract for supply of electricity. Typically, an applicant who has an electricity contract with an electricity retailer – future state.
  5. Regulation 22K – nominated person. Typically, an applicant as defined by regulation 22G to 22J who nominates another person to be the prescribed person – current state.

Basis of preparation document for the use amount formula

This document should explain why you believe the use amount formula to calculate the certifiable amount is fit for purpose. It should reflect your site and the eligible and non-eligible EITE activities. For instance, it should confirm and provide information about why the use amount formula meets 22O(1)(i) of the Regulations.

See determining your use amount formula for ideas on what to include in your basis of preparation documentation.



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