Carbon tax allowance regulations take shape

Regulations giving practical effect to s 13 (offset allowance) of the 2019 Carbon Tax Act, were gazetted last Friday and are deemed to have become applicable on 1 June 2019, when the Act came into force. CompliNEWS contributor Pam Saxby reports that they were followed on Tuesday by the release of two sets of draft regulations for comment that, once finalised, will give effect to trade exposure allowance and incentive allowance emissions intensity benchmark provisions in ss 10 and 11 of the Act.

Issues addressed in the offset allowance regulations include eligibility (creating an offset allowance and its duration); non-eligibility (limitations on an offset allowance); and the procedures to be followed in claiming an allowance. In addition, the new regulations prescribe the administrator’s duties when processing claims and in respect of creating, maintaining, overseeing and allowing access to the offset registry. A summary document provides more detail on the technicalities of the two sets of draft regulations.

On Tuesday, National Treasury also issued a media statement spelling out the process followed in developing all three sets of regulations. Among other things, it noted that final regulations on the trade exposure allowance and benchmarks for the emissions intensity incentive allowance will be gazetted during the first quarter of 2020. They will be aligned with the Department of Environment, Forestry & Fisheries’ greenhouse gas emissions reporting period. Stakeholders have until 17 January 2020 to comment on the draft documents.