House of Representatives

Explanatory Memorandum

(Circulated by the authority of the Minister for the Environment and Energy, the Hon Josh Frydenberg MP)

GENERAL OUTLINE

The Product Emissions Standards Bill 2017 establishes a national framework to enable Australia to address the adverse impacts of air pollution from certain products on human and environmental health.

The Bill implements a key aspect of the National Clean Air Agreement, established by Australia's Environment Ministers on 15 December 2015. Under that Agreement, a key initial action was the introduction of national emission standards for new non-road spark ignition engines and equipment (NRSIEE), which are a significant emission source. At peak times, NRSIEE are estimated to contribute up to 10 per cent of overall air pollutants in Australian urban environments.

The Bill will facilitate this by:

(a)

enabling the Minister to prescribe products as emissions-controlled products and make rules relating to those products;

(b)

providing mechanisms in the rules for emissions-controlled products to be certified to specified emissions standards;

(c)

providing a mechanism for the rules to exempt persons or products from the operation of one or more provisions of the Bill;

(d)

establishing offences and civil penalty provisions relating to the import of an emissions-controlled product to Australia, or supply of that product within Australia, if the product is not certified or marked in accordance with the rules for that product;

(e)

triggering the compliance and enforcement provisions of the Regulatory Powers (Standard Provisions) Act 2014 and providing for additional compliance and enforcement powers to support the objectives of the Bill;

(f)

enabling the sharing of information obtained under the Bill with other agencies and the publication of certain information relating to an emissions-controlled product;

(g)

enabling the delegation of the Minister's and the Secretary's functions and powers under the Bill, or the Regulatory Powers Act (as the case may be); and

(h)

requiring a review of the operation of the Bill at regular intervals.

The Product Emissions Standards (Excise) Charges Bill 2017 and the Product Emissions Standards (Customs) Charges Bill 2017 complement the Bill by establishing a mechanism for imposing a charge on the import or domestic manufacture of emissions-controlled products to recover the costs of implementing the product emissions standards framework where appropriate.

The Product Emissions Standards (Consequential Provisions) Bill 2017 makes a consequential amendment to the Customs Act 1901 clarifying that emissions-controlled products imported or exported in contravention of the Bill are not forfeited to the Crown under section 229 of that Act.

Consistent with the National Clean Air Agreement it is anticipated that the first emissions-controlled products to be prescribed under the framework will be NRSIEE products. Rules made for NRSIEE will prescribe two broad categories of NRSIEE: new small non-road spark ignition engines (up to 19 kilowatts in power) and new marine spark ignition propulsion engines.

FINANCIAL IMPACT STATEMENT

The Bill provides a framework for regulating emissions-controlled products. The cost of implementation will depend on the type of emissions-controlled products that are prescribed in rules for the purposes of the Bill. The cost of regulating different types of emissions-controlled products will be considered on a case-by-case basis as part of the regulatory impact analysis process, the requirements of which will need to be met prior to the products being prescribed in rules made under the Bill. Costs associated with regulating emissions-controlled products will be offset by revenue from cost recovery activities where this is consistent with the Australian Government Charging Framework. This would be through a charge on the import and domestic manufacture of emissions-controlled products and fees for services provided in the performance of functions under the Bill. Consistent with Australian Government policy, the amount of any applicable charge for different types of emissions-controlled products, or fees for services provided under the Bill, will be determined on a case-by-case basis through a Cost Recovery Implementation Statement.

LIST OF ABBREVIATIONS

The following abbreviations and terms are used in this Explanatory Memorandum:

APS - Australian Public Service

Bill - Product Emissions Standards Bill 2017

Consequential Provisions Bill - Product Emissions Standards (Consequential Provisions) Bill 2017

Criminal Code - Criminal Code Act 1995

Customs Act - Customs Act 1901

Customs Charges Bill - Product Emissions Standards (Customs) Charges Bill 2017

Department - means the department responsible for the administration of the Bill, currently the Department of the Environment and Energy

Excise Charges Bill - Product Emissions Standards (Excise) Charges Bill 2017

ICCPR - International Covenant on Civil and Political Rights

Minister - means the Minister responsible for the administration of the Bill, currently the Minister for the Environment and Energy

NRSIEE - non-road spark ignition engines and equipment

POC Act - Proceeds of Crime Act 2002

Regulatory Powers Act - Regulatory Powers (Standard Provisions) Act 2014

SES - Senior Executive Service