The Ozone Protection and Synthetic Greenhouse Gas Management Legislation Amendment Bill 2017 was passed by Parliament on 19 June 2017.
Following from the Review of the Ozone Protection and Synthetic Greenhouse Gas Management Program, Parliament has passed changes to the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989, the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995, and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995. These changes will implement the key outcomes of the review.
The key measure is the introduction of a hydrofluorocarbon (HFC) phase-down from 1 January 2018 as announced by Government in June 2016. The changes will also enable Australia to meet the HFC phase-down obligations of the Kigali Amendment to the Montreal Protocol (starting in 2019) should Australia decide to ratify the amendment. The changes also contain all the features necessary to start the HFC phase-down from January 2018 including complementary compliance and enforcement powers.
Also included in the changes are most of the efficiency measures announced in the review, including streamlining of licensing provisions, waiving uneconomic levy debts and reduced reporting frequency.
Further measures including strengthened compliance and enforcement powers covering more of the Program and additional efficiency measures will follow in a second tranche of amendments, planned for 2018.
The Department will continue to provide updates as the process progresses.
Greenhouse gas emissions to reduce by up to 80 Mt CO2-e by 2030.
On 5 May 2016 the Australian Government decided on a range of measures to reduce emissions and business costs.
Why was the review done?
The Australian Government has committed to reducing greenhouse gas emissions by 26–28 per cent below 2005 levels by 2030. A cost effective reduction in emissions of hydrofluorocarbons (HFCs) is a key part of this commitment.
HFCs are regulated under the Ozone Protection and Synthetic Greenhouse Gas Program, a highly successful environmental scheme that has been running since 1989 and last reviewed in 2001.
The then Minister for the Environment, the Hon. Greg Hunt MP announced a review of the Program on 24 May 2014. The review had two objectives:
- Identify opportunities to reduce emissions of ozone depleting substances and synthetic greenhouse gases in line with international efforts.
- Identify opportunities to improve and streamline its operation, including reducing regulatory compliance costs.
Key outcomes of the review
The program was found to be highly successful overall, having phased out 99 per cent of ozone depleting substances and contributed to a reduction in Australian greenhouse gas emissions of about 40 million tonnes of CO2-e since its inception. The review found this provided a solid foundation for further emissions reduction policies. Streamlining opportunities were also identified.
The Australian Government will implement cost effective measures to reduce HFC emissions by up to 80 Mt CO2-e in the period to 2030.
A statutory phase-down of HFC imports will be implemented, commencing on 1 January 2018 and will reduce HFC imports by 85 per cent from 2036. The phase-down will start a year earlier than the global phase-down agreed under the Montreal Protocol in Kigali in October 2016. It will also start 25 per cent lower than the Montreal Protocol limits reflecting Australia’s current HFC use and has more frequent reduction steps reflecting industry’s preferred approach.
Please see the HFC FAQ page for detailed information on the phase-down design.
Enabling provisions for future bans on the import of new equipment containing high global warming potential HFCs will also be included. Domestic and automotive air conditioners containing high global warming potential HFCs are equipment that will be considered in the future. This will be based on an assessment of the Australian market, particularly whether alternative equipment is available.
Further, compliance provisions of the legislation will be strengthened to support emission reduction including new offence provisions, increased penalty amounts, provision for suspension of licences and publishing of compliance actions.
Reducing regulatory burden on business
Streamlining measures will reduce regulatory burden on business by $1.2 million annually. These include providing for:
- Increasing the low volume import exemption threshold for equipment imports from 10kg to 25kg, reducing total licence numbers by one third.
- Licence holders to renew their licence rather than applying for a new licence, saving business $580 000 in administrative costs annually.
- A waiver of small levy debts below $330, reducing uneconomic transactions by 94 per cent from 2750 to 150 annually.
The Department will work with business to develop information to better inform equipment owners of the benefits of proper installation of equipment and regular equipment maintenance. This will achieve substantial emissions savings through reduced gas leakage and lower electricity use. Businesses will benefit through reduced electricity costs, reduced replacement costs for gas leakage and longer equipment life.
The Department of the Environment and Energy will engage with state regulators and the business community to examine how respective refrigeration and air conditioning regulatory arrangements can work in better synergy.
When will the measures come into force?
Measures are intended to commence by 1 January 2018, pending the outcome of the legislative process.
How will I be informed?
The Department of the Environment and Energy will continue to provide updates on progress through direct emails and updates to this and other relevant web pages.
If you would like to receive direct emails from the Department with updates, please email: email@example.com.
The Department of the Environment and Energy’s website has further information about the review and the HFC phase-down.