Statement of expectations and intent

A Statement of Expectations outlines the Australian Government’s expectations of how we will:

• achieve our objectives
• carry out our regulatory functions
• exercise our powers.

Our Statement of Intent outlines how we will meet these expectations.

Ministerial Statement of Expectations

Ministerial Statement of Expectations to the Clean Energy Regulator

Issued by The Hon Chris Bowen MP on 16 October 2024

This Statement of Expectations outlines my expectations, as the Minister for Climate Change and Energy, for how the Clean Energy Regulator (CER) will achieve its regulatory objectives, carry out its regulatory functions and exercise its powers. 

Overview

This Statement of Expectations forms part of the government's commitment to good corporate governance and to our regulatory reform agenda that aims to boost Australia’s productivity and lower the cost of living by ensuring a fit-for-purpose regulatory environment. The Australian Government's commitment to effective governance and performance of regulatory functions is guided by the Public Governance, Performance and Accountability Act 2013 (PGPA Act). This is complemented by the APS Reform Agenda’s 4 priorities that the APS: embodies integrity, puts people and business at the centre, operates as a model employer, and has the capability to do its job well. 

The CER has a critical role to play in helping Australia transition to a net zero economy, achieve Australia’s greenhouse gas emissions reduction targets under the Climate Change Act 2022, deliver 82% renewable energy in our electricity grids by 2030 and support a Future Made in Australia. I expect the CER to adopt a holistic approach across the regulatory lifecycle. This recognises the important role that implementing agencies can play in supporting regulatory policy, reviews and reform to meet regulatory objectives. 

Administration of regulatory functions

This statement covers the following regulatory functions undertaken by the CER:

• Australian National Registry of Emissions Units Act 2011
• Clean Energy Regulator Act 2011
• Carbon Credits (Carbon Farming Initiative) Act 2011
• Future Made in Australia (Guarantee of Origin) Bill 2024 (once enacted)
• National Greenhouse and Energy Reporting Act 2007
• Nature Repair Act 2023
• Renewable Energy (Electricity) Act 2000.

It also recognises the growing role of CER in providing carbon market services to other government departments through the Guarantee of Origin scheme and enduring regulatory infrastructure such as the Unit and Certificate Registry.

While recognising the independence of the Chair as the Accountable Authority of the CER’s regulatory functions, I expect the CER to apply the Regulator Performance Resource Management Guide (RMG 128). This includes embedding the following best practice principles into regulatory functions and incorporating regulatory performance reporting into the agency’s corporate plan and annual report as required under the PGPA Act and PGPA Rule. 

• Continuous improvement and building trust: regulators adopt a whole-of-system perspective, continuously improving their performance, capability and culture to build trust and confidence in Australia’s regulatory settings.
• Risk based and data driven: regulators manage risks proportionately and maintain essential safeguards while minimising regulatory burden, and leveraging data and digital technology to support those they regulate to comply and grow.
• Collaboration and engagement: regulators are transparent and responsive communicators, implementing regulations in a modern and collaborative way.

Whole-of-system regulatory stewardship

Australia is well positioned to take advantage of the opportunities that a net zero economy presents. Climate-related regulatory schemes and market mechanisms play an important role in achieving this goal. The verification of energy and emissions data by the CER is central to these schemes and is enhanced by robust audit and compliance functions of the CER. Additional assurance over regeneration projects and fugitive methane emissions remains a priority for the government, particularly in relation to open cut coal mines. 

I expect the CER to act as stewards of the carbon market by using your regulatory powers to promote the benefits of a deep, liquid and fully informed domestic carbon market where prices are transparent. I also expect you to continue to build trust with and between the government and the Australian community to ensure the integrity of credits issued by the CER, your infrastructure and the information and data you manage. The implementation of the Independent Review of Australian Carbon Credit Units and our response to reviews by the Climate Change Authority remains a priority. 

I also expect the CER to provide leadership in implementing its schemes to deliver on your purpose of accelerating carbon abatement for Australia. By collaborating with other government Departments and regulators to support cross-cutting Commonwealth policies and priority reforms and sharing, as appropriate, CER’s rich energy and emissions data and knowledge of reporting, voluntary carbon markets and carbon accounting frameworks, CER can assist the evolution of the climate-related disclosure regime and advance Australia’s transition to net zero.

Of particular importance is ensuring First Nations Australians have access to economic opportunities from the transition to net zero. I expect the CER to continue its delivery in this area in light of our First Nations Clean Energy Strategy.

Additionally, I expect the CER to progressively build a cost-recovery capability to support future shifts in demand for your services.

Relationship with Minister

The CER plays an essential role in ensuring that the government and I are well placed to respond promptly to any broader challenges and opportunities arising from the administration of its regulatory functions. Accordingly, I expect the CER to provide accurate and timely information on significant issues relating to these regulatory functions to the Department of Climate Change, Energy, the Environment and Water.

Significant issues include matters for which the government is likely to be accountable in Parliament, material operational or budgetary issues, such as the need for substantive legislative change or matters that represent high reputational risk to the CER. 

As the responsible Minister, I will provide an enabling environment for the CER to consistently implement best regulatory practice by ensuring you are well informed of the government's policy direction and priorities.

Transparency

I ask that this statement and your response be made available on the CER’s website.

Statement of Intent

This Statement of Intent has been prepared in response to the Australian Government's Statement of Expectations of 16 October 2024 and has been endorsed by the members of the Clean Energy Regulator for presentation to the Minister for Climate Change and Energy, the Hon Chris Bowen MP. 

As noted by the Minister in his Statement of Expectations, the work of the Clean Energy Regulator is a key part of the effort to help Australia transition to a net zero economy, achieve Australia’s greenhouse gas emissions reduction target of 43% below 2005 levels by 2030; deliver 82% renewable energy in our electricity grids by 2030; and support the transition of industry and the broader economy to net zero emissions through a Future Made in Australia. Within this setting, the CER is responsible for administering: 

• The National Greenhouse and Energy Reporting (NGER) Scheme
• The Safeguard Mechanism
• The Australian Carbon Credit Unit (ACCU) Scheme
• The Renewable Energy Target (RET) including both Large-scale Renewable Energy Target (LRET) and Small-scale Renewable Energy Scheme (SRES).

We also have a role in supporting new and emerging regulatory functions including:

• The Nature Repair Market scheme
• The Guarantee of Origin (GO) Scheme

We will work to comply with the requirements of the Regulator Performance Resource Management Guide (RMG 128) including embedding best practice principles in its regulatory functions.  

Continuous improvement and building trust: regulators adopt a whole-of-system perspective, continuously improving their performance, capability and culture to build trust and confidence in Australia’s regulatory settings.

We have adopted a continuous improvement approach to its operations, with a focus on effective stewardship of the markets we regulate. Integrity and transparency are vital to the success of the schemes we regulate. We are investing in independent audits and additional geospatial tools to enhance ACCU Scheme assurance and continue to implement the recommendations from the Independent Review of ACCUs. We are sharing and publishing more scheme data and information to inform policy, help others understand progress in reducing emissions and evidence environmental claims. We continue to support industries through the planned launch and progressive population of our data services website, which will make it easier to find, access and understand our data.

Collaboration and engagement: regulators are transparent and responsive communicators, implementing regulations in a modern and collaborative way.

Providing information and education on our schemes is one of the central roles and responsibilities of the Clean Energy Regulator. We publish on our website significant corporate documents and market and scheme materials to support education, participation, accountability and transparency across our schemes and the carbon markets. Considerable effort and resources are directed into engagement with participants and other stakeholders, to seek their input as new systems and processes are developed.
We work with other regulatory bodies and law enforcement agencies to support our compliance activities. This includes sharing knowledge, gathering intelligence, or referring matters for law enforcement.

Risk based and data driven: regulators manage risks proportionately and maintain essential safeguards while minimising regulatory burden and leveraging data and digital technology to support those they regulate to comply and grow.

Our compliance policy articulates our risk-based approach, and we are building a digital first, ‘tell us once’ framework aimed at minimising regulatory burden. Each year we publish compliance and enforcement priorities that describe our focus for the year ahead. We will continue to invest in our data management, integrity and accessibility to ensure our decisions are based on clearly documented evidence.

Relationships between the Clean Energy Regulator and the government

We will work across government to integrate our work and ensure Australia is well positioned to take advantage of the opportunities that a net zero economy presents. Work continues to support the formation of carbon markets (carbon markets also encompass renewable energy) that are underpinned by robust data and accounting practices including robust audit and compliance functions.

We will continue to actively review our work and support implementation of the Independent Review of ACCUs and the government’s response to reviews by the Climate Change Authority. Continued focus will be given to gateway audits for regeneration projects.  The agreed transition and improvement of reporting of fugitive methane emissions from open cut mines will be implemented.

We will continue our work to support the government’s First Nations Clean Energy Strategy by focusing on support, education, and engagement with first nations participants and prospective participants and encourage their participation in our schemes.

Advice and input will be provided into any further policy development relevant to the legislation which it administers. We will work collaboratively with the department to ensure a shared understanding and appropriate level of awareness of the agency's operations and priorities. In addition, we will contribute to the development of formal government submissions relating to its activities and resources, which will be submitted and coordinated by the department.

Advice and support will also be provided to the Ministers and Assistant Minister, to aid the administration of clean energy policy.

Financial management

We will continue to manage its financial affairs in line with the Public Governance, Performance and Accountability Act 2013, along with other relevant legislation and financial policies. 

We acknowledge the requirement to manage Commonwealth resources in an efficient, effective, economical and ethical manner, ensuring cost effective outcomes and financial sustainability. 

We will look to progressively build a cost-recovery capability to support future shifts in demand for services. Implementing a substantive cost-recovery model would ensure the Clean Energy Regulator can continue to effectively administer its schemes while participation and transaction volumes continue to grow as we head towards net zero.