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Department of the Environment and Heritage annual report 2005–06

Volume two
Department of the Environment and Heritage, 2006
ISSN 1441 9335

Legislation annual reports 2005-06 (continued)

Operation of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989

This annual report is prepared in accordance with section 68 of the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989 and covers the operation of the Act from 1 July 2005 until 30 June 2006.

Ozone depletion is a major global environmental problem. Left unchecked, deterioration of the ozone layer will allow higher doses of ultra violet band B (UVB) radiation to penetrate the earth’s atmosphere and will greatly increase the incidence of skin cancer and eye cataracts, as well as affecting plants, animals and aquatic life.

The international community’s response to ozone depletion has been cohesive and effective. Research indicates that the rate of ozone depletion has slowed and scientists predict a full recovery of the ozone layer by around 2065. This predicted recovery depends on full compliance with internationally agreed phase-out targets for the use of ozone depleting substances and substituting less harmful alternatives.

Australia meets its international obligations to phase out the use of ozone depleting substances and to control the use of synthetic greenhouse gas replacements through the Ozone Protection and Synthetic Greenhouse Gas Management Act 1989.

Purpose of the Act

The purpose of the Act is to:

Operational aspects of the Act

Licensing

The Act establishes a licensing system to enable Australia to meets its requirements under the Montreal Protocol to phase out the use of ozone depleting substances, and establishes consistent requirements for synthetic greenhouse gases that are used to replace ozone depleting substances. The Act:

Revenue

The Act establishes administrative fees for licences issued under the Act, with the fees set under the Ozone Protection and Synthetic Greenhouse Gas Management Regulations 1995. The Act also establishes the Ozone Protection and Synthetic Greenhouse Gas (SGG) Account to allow revenue from the licensing system, import levies and the National Halon Bank to be directed towards the cost of the Act’s administration; ozone depleting substance phase-out programmes; emission minimisation programmes; and the operation of the National Halon Bank.

End use regulation

The Act creates regulation-making powers to allow the Australian Government to develop end use controls on purchase, sale, handling, storage and disposal of ozone depleting substances and synthetic greenhouse gases.

Operational achievements in 2005–06

Background

There are four types of licence that can be issued under the Act: controlled substance, essential use, used substance, and pre-charged equipment. There is one type of exemption: section 40 (essential use).

Licences for controlled substances, used substances, essential uses and pre-charged equipment are granted for a period of up to two years and stay in force until the end of the licensing period in which they are granted. The current licensing period ends on 31 December 2007.

Essential use exemptions are granted for a period of up to one year and remain in force until the end of the period in which they are granted, which for the purpose of this report is 31 December 2006.

Results

As of 30 June 2006 there were 545 active licences for the 2006–2007 licensing period. A further 41 licences were issued during 2005–06 for the previous licensing period.

Table 1: Active licences as at 30 June 2006
Type of licence Number
Import and export HCFC 8
Import and export methyl bromide 5
Import and export HFC and PFC 9
Import refrigeration and air conditioning equipment containing an HCFC or HFC refrigeration charge 505
Export CFC—essential use licence to facilitate the re-export of bulk CFC no longer required in Australia 1
Import and export used or recycled CFC, halon, carbon tetrachloride and methyl chloroform—used substance licence 1
Section 40 exemptions(a) 7
Import and export of HCFC 9
(a) Section 40 exemptions are issued only to enable the import of certain products and equipment containing or designed to contain certain ozone depleting substances that are essential for medical or other purposes and for which practical alternatives are not available in Australia.

The Ozone Protection and Synthetic Greenhouse Gas Regulations 1995 permit the use of methyl bromide as a feedstock (a feedstock is an intermediate substance which is used to manufacture other chemicals). Three permits for this were issued in 2005–06. These permits are issued on a calendar year basis.

Australia’s imports of ozone depleting substances remain below the limits set through the Montreal Protocol. Bulk imports of ozone depleting gases into Australia during the 2005 calendar year amounted to an equivalent of 233 ozone depleting potential (ODP) tonnes, a decrease of 64 ODP tonnes from 2004. The import of ozone depleting refrigerants, solvents and fire extinguishing agents remained in line with the structured quota reduction system. In addition, an estimated 67.01 ODP tonnes of ozone depleting refrigerants were incorporated in pre-charged equipment imported in 2005.

Imports of bulk synthetic greenhouse gases into Australia during the 2005 calendar year were in the order of 1 733.2 kilotonnes of carbon dioxide equivalent, while synthetic greenhouse gases incorporated in pre-charged equipment were in the order of 3 808 kilotonnes of carbon dioxide equivalent.

Revenue

The Act provides for licence and exemption application fees to be levied.

Table 2: Licence and exemption fees
Type of licence/exemption Fee
Controlled substances $15 000 per licence period
Essential uses $3 000 per licence period
Used substances $15 000 per licence period
Pre-charged equipment $3 000 per licence period
Section 40 $3 000 per exemption period

Levies on import and manufacturing activity under a controlled substances licence are payable each quarter under the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act 1995 and the Ozone Protection and Synthetic Greenhouse Gas (Manufacture Levy) Act 1995 according to the quantity and ozone depleting potential of HCFCs imported or manufactured; or the quantity of methyl bromide, HFC or PFC imported or manufactured (see Table 3). Australia has not manufactured ozone depleting substances since 1996, and has never manufactured HFCs or PFCs.

Table 3: Activity fees
Licensed activity Fee
Import HCFCs $3 000 per ODP(a) tonne
Import HFCs and PFCs $165 per metric tonne
Import methyl bromide $135 per metric tonne
(a) Ozone depleting potential (ODP) is a comparative measure using CFC as a base level of 1. For example 1 metric tonne of methyl bromide equals 0.6 ODP tonne.

Licence fees and levies are set at the level estimated to be the cost to the Australian Government of administering the legislation and undertaking programmes associated with phase-out and emission minimisation. These fees are held in the Ozone Protection and Synthetic Greenhouse Gas (SGG) Account.

The purpose of the account is to reimburse the Australian Government for the costs associated with:

Funds received during 2005–06 from operation of the National Halon Bank and licence fees and levies are shown in Table 4. Spending on emission minimisation and phase-out programmes was low during the year as efforts were focused on implementing amendments to the legislation. A wider emission minimisation and phase-out programme will commence in 2006–07.

Table 4: Ozone Protection and SGG Account receipts and expenditure in 2005–06
Activity Amount received
Controlled substance licence fees:
   Methyl bromide licence fees
   HFCs licence fees
$120 000
$60 000
$150 000
Pre-charged equipment licence fees $1 634 981
Section 40 exemption fees $18 000
Levies:
   HCFCs
   Methyl bromide
   HFCs
   Pre-charged equipment
 
$509 878
$66 101
$400 804
$341 730
National Halon Bank:
   Commercial revenue
 
$665 166
Total $3 966 660
Account Expenditure
Grants $33 165
Salary and administration $1 259 178
Total minus expenditure $2 674 317

Projects funded from the Ozone Protection and SGG Account 2005–06

One project intended to further the phase-out of ozone depleting substances and to minimise ozone depleting substance and synthetic greenhouse gas emissions received funding during 2005–06. This was a continuing project to develop an environmental rating scheme for air conditioning and refrigeration systems using life cycle assessment methodology, to raise awareness in industry and government and confirm comparative operating efficiencies. The total project budget is $165 400 and the project received $33 164 in 2005–06.

No new projects were approved for funding under the Ozone Protection and SGG Account in 2005–06. A new phase-out and emission minimisation programme will be developed during 2006–07.

Implementation of end use Regulations

National end use Regulations have been implemented for the use of ozone depleting and synthetic greenhouse gases in the refrigeration and air conditioning and fire protection industries, and for control of methyl bromide as a feedstock and its use as a fumigant for approved critical uses and quarantine and pre-shipment uses.

These Regulations will ensure Australia meets its phase-out responsibilities under the Montreal Protocol and will lead to reduced emissions of ozone depleting substances and synthetic greenhouse gases through the establishment of national knowledge, skills and working standards for industry.

The Australian Refrigeration Council was appointed as the industry board to assist with the administration of licensing in the refrigeration and air conditioning industry. The Fire Protection Association of Australia was appointed as the industry board to assist with the administration of licensing in the fire protection industry.

Montreal Protocol related activities

The 1987 Montreal Protocol aims to promote international cooperation in developing and implementing specific measures to control the consumption and production of ozone depleting substances. Australia ratified the Montreal Protocol in May 1989. The Montreal Protocol was amended in 1990, 1992, 1995, 1997 and 1999. It establishes total phase-out dates for controlled substances. Details of the control measures are available at www.deh.gov.au/atmosphere/ozone/legislation/montp.html.

This year Australia continued to meet its international obligations under the Montreal Protocol. Australia has met, or is well in advance of, all reduction obligations. Australia will phase out the import of hydrochlorofluorocarbons by 2015, five years ahead of our international obligations. In doing so, Australia will consume almost 5 000 tonnes of ODP, or 63 per cent less hydrochlorofluorocarbons than allowed for under the Montreal Protocol in the period from 1996 to 2020.

Australia provides financial assistance, through the Montreal Protocol’s multilateral fund, to assist developing countries comply with the phase-out requirements under the protocol. Australia also provides technical and financial assistance to other countries in the region to enable those countries to phase out the use of ozone depleting substances. For example, this year Australia continued to assist India to implement its National Halon Banking and Management Project. The facility will enable India to eliminate new halon imports. Funding for these projects is provided through Australia’s international aid programme.

Freedom of information

No requests were received under the Freedom of Information Act 1982.

Administrative Appeals Tribunal

No applications under section 66 of the Act, for review of a decision made by the minister, were received by the Administrative Appeals Tribunal.

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