With 11 days of consultation left on the Liquid Fuels Opt-in Scheme, law firm Clayton Utz has emphasised that it will take at least a year before it is activated.
The opt-in will allow heavy consumers, such as transport firms and mining services companies, the choice of either paying an equivalent carbon price through reductions in the fuel tax credit rate or being part of the carbon price mechanism and surrendering carbon units to satisfy their liability for emissions embedded in the liquid fuels they use.
By Rob McKay | July 9, 2012
With 11 days of consultation left on the Liquid Fuels Opt-in Scheme, lawyers at law firm Clayton Utz have emphasised that it will take at least a year before it is activated.
The opt-in will allow heavy consumers, such as transport firms and mining services companies, the choice of either paying an equivalent carbon price through reductions in the fuel tax credit rate or being part of the carbon price mechanism and surrendering carbon units to satisfy their liability for emissions embedded in the liquid fuels they use.
“It is important to note that the Opt-in Scheme will have the same exclusions currently present in the effective carbon price,” Partner Graeme Dennis and Senior Associate Romany Sloan advise.
“For example, no liability will arise for fuel used in heavy on-road vehicles until at least 2014.
“In addition, fuel used in ways that do not incur a carbon price, such as agriculture, forestry or fisheries, will not fall under the Opt-in Scheme.”
The deadline for submissions is July 20.
The consultation is aimed at informing the Clean Energy Legislation Amendment Bill, which itself aims “to refine” the scheme’s operation, the government says.
The fuels involved are diesel, petrol and aviation fuels, with liquefied and compressed gases tackled under separate legislation.
The Australian Trucking Association (ATA) sees it as a simplification of the carbon emission reporting burden and something for the biggest entities to consider.
“That would simply allow a large company to do one return with everything in it,” ATA National Policy Manager David Coonan says.
He is uncertain where the transition point comes in, as much depends on what relevant aspects a company might also need to report on other than diesel consumption, but agrees that it might work for larger players in the cold chain.
According to the Association of Mining and Exploration Companies (AMEC), an opt-in is probably worthwhile for firms that spend more than $10 million on liquid fuels.
It puts the cost of opting in at $45,000 a year.
“If [you are] remaining under the fuel tax system, you are effectively paying carbon tax when you pay for fuel,” AMEC says in an advisory released last week.
“If you opt in, you defer the need to acquire and acquit permits until year end.”
