The Department recovers the administrative / regulatory costs under the OPSGG Program, excluding costs of investigations and enforcement associated with its regulatory activity.
A review of the Program was completed in May 2016 and will result in major changes to further reduce emissions, including introducing a HFC phase-down, and to streamline administration. (The outcomes of the Program Review can be found on the department’s website: http://www.environment.gov.au/protection/ozone/legislation/opsggm-review.) The changes are planned to be implemented by January 2018.
Administration of the Program has undergone significant change in the last few years to reflect legislative changes including introduction and repeal of the carbon tax and introduction of low volume import exemptions. This has resulted in increases and decreases in risk profile, and mitigation strategies to manage those risks, including revenue risk through avoidance or incorrect reporting and changes in industry practice that increase the risk of deliberate emissions.
As a result of these changes the Program has undergone and will continue to undergo, significant organisational structure, staffing profile and business process changes. Given the nature of these changes and the effect on resource allocation, a zero based budgeting approach has been taken in 2016-17.
Around 90% of the Program’s direct costs (including outsourced arrangements) are employee related, with most other major direct costs (with the exception of external experts) and indirect costs largely fixed in nature.
Volumes of licence and authorisation applications and their management are externally driven and determined by economic and market conditions. The complexity of individual applications and related management can vary considerably depending on the circumstances of individual applicants.
The costs incurred in delivering the OPSGG Program include:
These costs are partially funded through direct appropriation by Government, but beyond 2016-17, will be cost recovered.
The levels of activity are demand driven to a large extent, depending on the number of importers or manufacturers, the frequency of import or manufacture, export and businesses and technicians in the end use schemes. These can and do vary from year to year and within years. Costs have been developed from a zero base to provide for significant changes to drive efficiencies in Program processes, organisational structures and functions (eg Act review, end of export refunds, and automation through system enhancements). Sensitivity of the cost estimates is influenced by 2 main factors.
By economic and climatic conditions, with increases in imports (and licensees) and growth in domestic suppliers and technicians in hotter conditions and / or periods of high economic activity and population growth. It should be noted that refrigeration and air conditioning business activity is growing at a faster rate than the economy generally; and
the implementation of recommendations from the Program Review.
The then Minister for the Environment announced a review of the Program in May 2014. The review was to identify further emission reduction opportunities and opportunities to streamline the administration of the Program. A final report and recommendations was completed in April 2016 and outcomes announced in June 2016.
Import, export and manufacture licences. There will, on average, be approximately 512 new licences annually, 10 licence transfers annually, and 10 licence surrenders annually
Four types of licence can be issued under the Act:
Controlled Substance Licence, which allows the holder to manufacture, import or export HCFCs, methyl bromide or SGGs;
Essential Use Licence, which allows the holder to manufacture, import or export ODS, which have been phased out, for essential uses approved through the Montreal Protocol;
Used Substance Licence, which allows the holder to import or export recycled or used scheduled ODS; and
Equipment Licence, which allows the holder to import equipment containing an ODS or SGG.
In addition, exemptions under S40 of the Act are issued to allow the import and manufacture of equipment that is otherwise prohibited under S38 of the Act, and where the equipment is essential for medical, veterinary, defence, industrial safety or public safety purposes
There will be approximately 1,030 import, export and manufacturing licences valid annually
End-use licences and permits. There are approximately 40,518 licences and permits expected to be issued in 2016-17, and approximately 52,950 in 2017-18.
Licences and permits issued under the Regulations are:
Refrigerant Handling Licence, which allows the holder to handle controlled refrigerants in the refrigeration and air conditioning industry;
Refrigeration and Air Conditioning Trainee Licence, which allows the holder to handle a refrigerant while undertaking training and/or assessment in a classroom setting and at the work place under supervision
Restricted Refrigeration and Air Conditioning Licence, which allows the holder to recover and handle refrigerant while decommissioning equipment;
Refrigerant Trading Authorisation, which allows the holder to acquire, possess and dispose of controlled refrigerants;
Restricted Refrigerant Trading Authorisation, which allows the holder to recover, store and dispose of controlled refrigerants;
Refrigeration and Air Conditioning Equipment Manufacturing Authorisation,which allows the holder to acquire controlled refrigerants (other than Halon) for the use in manufacture of equipment;
Extinguishing Agent Handling Licence (Special, Experienced, Qualified and Trainee), which allows the holder to engage in activities involving extinguishing agents in the fire protection industry;
Extinguishing Agent Trading Authorisation, which allows the holder to acquire, store or dispose of extinguishing agents that are for use, or have been used, in fire protection equipment; and
Halon Special Permit, which allows the holder to possess halon that is for use in fire protection equipment.
There will be approximately 85,000 licences and authorisations in place annually
Quarterly import reporting numbers will be approximately 4,100 annually
There will be no domestic manufacture of ODS and SGGs