The proposal has two components that both commence from 1 July 2022.

Component 1: Carbon-dioxide (CO2)-equivalent emissions levy

• Carbon emitting facilities would pay a levy of $50 per tonne on direct¹ CO2-equivalent emissions if they produce more than 25,000 tonnes of both direct and indirect² CO2-equivalent emissions annually. The levy would increase by 4% each year and would be tax deductible.
  • Facilities in the agriculture or transport industries would be exempt from paying this levy.
  • 80% of emissions-intensive trade-exposed industry emissions would be exempt from the levy in the first year. This exemption would reduce to zero over the first 5 years of the proposal.

Component 2: Energy Supplement changes

• The base Energy Supplement payment rate would increase by 30% for all eligible payments.
• Eligibility for the Energy Supplement payment would be reinstated for the following payment recipients and cardholders:³
  • Family Tax Benefit – Part A
  • Family Tax Benefit – Part B
  • Commonwealth Seniors Health Card.
• The Energy Supplement payment would be indexed proportionate to changes in the headline consumer price index every 6 months from 1 January 2023.

¹Direct emissions are also known as Scope 1 emissions and refer to the emissions released to the atmosphere as a direct result of an activity, or series of activities at a facility level.

²Indirect emissions are also known as Scope 2 emissions and refer to the emissions released to the atmosphere from the indirect consumption of an energy commodity.

³Recipients who became eligible for these payments and the Commonwealth Seniors Health Card on or after 20 September 2016 are not entitled to the Energy Supplement.