Greenhouse Gas Pilot: Outcomes & Feedback (Aug/Sept 2006)

1. Greenhouse Gas Pilot Debrief of Outcomes August/ September 2006

2. Outline • Background • CoAG decision • Pilot Outcomes • Your Say • Questions

3. What is the Greenhouse Pilot? • Aim: Examine GHG reporting & disclosure by industry with a critical focus on the issues associated with using NPI • Led by Victoria, in conjunction with all States and Territories, comprises 2 work streams: • Strategic Issues Stream (policy issues) • Practical Implementation Stream (data collection presentation) • Draft position paper • Consultation • Final position paper • 25 companies, 70 sites across Aust • Data available at EPA website • Report on 2004/05 data collection soon on EPA website: www.epa.vic.gov.au/air/greenhouse_pilot/default.asp

4. The NPI NEPM Variation • At its meeting in July 2005, EPHC agreed to initiate the NPI NEPM variation process • A draft NEPM and Impact Statement has been prepared • Major issues under consideration are: • Greenhouse gases • Transfers of waste • Review of substances and thresholds • Other changes include name change (National Emissions Inventory) and removal of Aquaculture exclusion • GHG issue has been informed by Victoria’s Greenhouse Pilot

5. Background – other processes • Joint EPHC/MCE groups (PWG/TWG) tasked with investigating: • Streamlining reporting burden (of various programs) through a common web reporting point (TWG) • Options for a national mandatory reporting requirement (PWG) • NEPC foreshadowed NPI’s potential role in above by agreeing to initiate NEPM Variation mid-2005

6. COAG Decision – 14 July 2006 • Jurisdictions have been directed to pursue national purpose-built legislation for emissions and energy reporting and report back to COAG by December 2006 • As a result all EPHC work on GHG has been halted, pending the above • Should national purpose-built legislation not be agreed at December COAG the NPI becomes a valid fallback position • CoAG’s communiqué at: • www.coag.gov.au (p.9)

7. COAG Decision – 14 July 2006 • “Climate Change • In relation to energy and greenhouse gas emissions reporting, COAG agreed that a single streamlined system that imposes the least cost and red tape burden is the preferable course of action. To this end: • COAG agreed that Senior Officials report back to COAG in December 2006 with a proposal for streamlining emissions and energy reporting in line with the above objectives. The report should be based on the preparation of national purpose-built legislation to provide for cost-effective mandatory reporting and disclosure at the company level at the earliest practicable date. The report will also need to include advice on timing, thresholds and governance arrangements; • COAG also agreed that the National Pollutant Inventory (NPI) would not be used as a vehicle for reporting greenhouse gas emissions and that no further work be undertaken by the Environment Protection and Heritage Council on incorporating greenhouse gas emission reporting in the NPI pending finalisation of the above report; and • COAG further agreed that every effort should be made to reach agreement on a national purpose-built legislation by December 2006. States and Territories reserved the right to use the NPI if the Commonwealth, States and Territories failed to reach agreement on national purpose‑built legislation at COAG’s next meeting.”

8. Pilot Outcomes • Final Position Paper • Issues investigation • Analysis of costs and benefits of proposal • The Pilot (NEPM) Proposal • Report: Findings from data collection and disclosure www.epa.vic.gov.au/air/greenhouse_pilot/default.asp

9. The Pilot (NEPM) Proposal Carbon dioxide 300,000,000 What would an NPI NEI with GHG look like? • Disclosed alongside other emissions? • NO !

10. What would an NPI NEI with GHG look like? • Displayed as a “local” emission? • NO !

11. What would an NPI NEI with GHG look like? • Report greenhouse gas emissions to Greenhouse Challenge and NPI separately? • NO !

12. What would an NPI NEI with GHG look like? • Mandatory reporting of GHG emissions and energy data • Thresholds applied at a company level of 25,000 tonnes of greenhouse gas in CO2-e pa, or production/consumption of 100 terajoules of energy annually – new threshold Category 4 • Data reported to Government at the facility level; and public disclosure at the company level • GHG emissions from off-site transport attributable to a company is reported • Diffuse (aggregated) emission estimates included as is currently the case

13. What would be reported? • Direct emissions of 6 Kyoto gases: CO2, CH4, N2O, HFCs, PFCs, SF6 • Indirect emissions (CO2–e indirect) from electricity use on site • Electricity use in TJ or MWh, type and quantity of fuel (not public) • Emission reduction activities (tonnes CO2-e abated and actions implemented) – (voluntary) • Industry comment (voluntary) • All at facility level • ‘Head office’ type facility for purposes of reporting emissions such as company-wide fleet emissions or aggregating a number of small sites

14. How would this data be displayed?

15. How will reporting occur? • Streamlining of emissions information is important • Best case – single reporting system for all emissions collection programs (GHG, NPI combustion gases and other NPI emissions) • Next best: single reporting system for GHG reporting? • Next best – flexible reporting for GHG, enabling reporter “choice” between reporting via AGO’s OSCAR or NPI, depending on their reporting “demographic”

16. “Flexible” Reporting System DEH disclosure website Data subset for NPI to DEH (once approved by jurisdiction) • GCP Reporter & current NPI Reporter OSCAR: If NPI (GHG) then set facility level reporting Jurisdictional NPI team via (NRT) Data assessment in OSCAR GHG Y/N? 10% 90% Current NPI Reporter only

17. Costs Benefits Consultation/ advice to government Regulatory certainty – level playing field Understanding compliance requirements Flexibility provides most efficient reporting process Data collection/ calculation (scope 1) Consistent and comparable data Data collection/ calculation (scope 2) Good performance showcased Administrative reporting cost Transparency builds credibility and trust with community Disclosure drives competition Increases corporate knowledge of greenhouse issue Summary Major expense is additional compliance cost of approximately $500 per current reporting facility and $600 for new facilities. Benefits varied – market certainty, building community confidence, low-cost burden reporting and greenhouse reporting equity for industry. Impacts of a Varied NEPM • Industry – Summary of costs and benefits 25kt threshold = $2.5M elec. bill

18. Costs Benefits Legislation development process Provides consistent and comparable data to inform policy decisions NPI database systems modifications Low cost and expeditious development and implementation OSCAR Plus system modifications Allows harmonisation of existing programsto continue Preparation of guidance material for business Drives competitive emission reduction (policy outcome) Additional implementation resourcing for jurisdictions Delivers on commitment for lowest reporting cost burden to business Summary Establishment costs $238,750, ongoing $400,000 pa. Relatively low despite additional Govt burden of integrating two reporting systems. Low cost, short lead time, delivers on low cost burden for business commit’t, progress on streamlining other GHG program-reporting not hindered. Impacts of a Varied NEPM • Government – Summary of costs and benefits

19. Costs Benefits Essentially nil Satisfies community right to know Information empowers and informs public debate on greenhouse issues Disclosure drives emission reduction Single information source for emissions to the environment Provides consistent info. to assist investment sector decision-making Increases value and relevance of NPI program Summary Costs not directly attributable to the community High social benefit to community from increased knowledge of the issue and more capacity to engage in the debate. Impacts of a Varied NEPM • Community – Summary of costs and benefits

20. Strength of proposal • Low costs (existing frameworks, minimal additional effort for reporters to report GHG) • Short implementation timeframes • Consistency with current program • Pre-existence of confidentiality safeguards • International PRTR precedents • Opportunity to be flexibly implemented without impeding streamlining work of TWG • Modification of existing program - least red tape

21. Pilot Findings – policy stream • “The NPI is a suitable mechanism for reporting and disclosure of greenhouse gas emissions in Australia. With existing frameworks in place this can be done relatively quickly and at low cost to government and business. There are clear international precedents with NPI-equivalent programs throughout the UK and Europe currently including greenhouse gases.

22. Pilot Findings – practical stream • 25 companies, 70 sites successfully provided data for 2004/05 • Proposed implementation model, in particular its flexible approach, was supported. This support ranged from strong to cautious, to near ambivalence. • Very low effort to report to pilot (average 3 hours per site) • No reports from the Pilot companies themselves, or from EPA Victoria’s experience, of negative consequences of disclosing this data.

23. How to have your say • “Submissions on all aspects of draft NEPM variation & impact statement welcome • Details about making a submission on EPHC website (www.ephc.gov.au) • Written submissions should be sent to: • Ms Monina Gilbey • Project Officer • NEPC Service Corporation • Level 5, 81 Flinders Street • Adelaide SA 5000 • Email:  mgilbey@ephc.gov.au” • Or, to EPA Victoria Greenhouse Pilot team: • Pilot@epa.vic.gov.au

24. Questions