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are emitted for each unit of output produced by a manufacturer.
111
Further, in the
customer guidelines, the department communicated to prospective applicants
that the reduction in carbon emissions intensity would be assessed using
the:
predicted percentage reduction in carbon emissions intensity following
project implementation indicator one; and
total
predicted carbon savings over the life of the conservation measure indicator
two.
4.4 The
values for these indicators were to be calculated using the Carbon and
Energy Savings Calculator the calculator provided on AusIndustry’s website.
To generate these values, applicants were required to:
identify the activities on a site or multiple sites that related to the
manufacturing activities for which funding was sought, as opposed to
other activities such as corporate management;
select
an activity boundary from which emissions were estimated—this could
have been the whole or part of a manufacturing site;
identify a period of time over which to measure baseline emissions
intensity that was typical of the normal production process and did not
include one‐off or unusually large periods of activity;
estimate
future production levels based on realistic sales forecasts and associated
energy use; and
identify the effective life of the emissions reduction measures.
4.5 The
scoring methodology developed by the department then allocated a
score against merit criterion one using the two indicators. The score for indicator
one was based on the percentage reduction in carbon emissions intensity,
while the score for indicator two was based on grant funds per tonne of
carbon abated which was the total carbon savings over the life of the conservation
measure relative to the amount of grant funds requested.
112
The
111 Greenhouse gases are produced, for example, when burning coal or natural gas to generate the electricity that powers a manufacturing process. The most common greenhouse gas is carbon dioxide.
There are five other main types of greenhouse gases: methane, nitrous oxide, hydrofluorocarbons, perfluorocarbons and sulphur hexafluoride. The latter three are synthetic and are either used in
industry or created as a by-product of industrial processes. 112 Total carbon savings over the life of the conservation measure was listed in the departmental
assessment, but was not a basis for scoring applications.
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contribution of these indicators to the merit criterion one score was dictated by
the weightings provided in Table 4.1.
Table 4.1: Weightings for merit criterion one
Performance indicator used in scoring as detailed in the procedures manual
Weighting Maximum
score for indicator
Predicted reduction in carbon emissions intensity following project implementation indicator one
60 42 Dollars of grant funding requested per tonne of carbon
abated 40 28
Total 100 70
Source: ANAO analysis of the procedures manual.
4.6 In
June 2014, the department advised ANAO that the second indicator listed
in the customer guidelines was assessed using grant funds per tonne of carbon
abated, rather than total carbon savings over the life of the conservation measure,
because: The
dollars per tonne calculation was simply a tool that allowed us to compare and
consistently score total carbon savings over the life of the project. In the absence
of this tool it would not be possible to objectively measure performance
in terms of total carbon savings. Carbon savings varied enormously
across applications depending on the size of the project and the nature
of the emission reduction measure, ranging from 1064 kilotonnes to 0.35
kilotonnes.
4.7 This
methodology was approved by the manufacturing policy area of the
department in November 2011 and was based on advice from the Department
of Climate Change and Energy Efficiency DCCEE, the Department
of Resources, Energy and Tourism, Low Carbon Australia and IA. The
department advised ANAO in November 2014 that the customer guidelines
were cleared in February 2012 by the then AusIndustry General Manager
responsible for the programs after being reviewed by DCCEE and IA. However,
the department was unable to identify to ANAO who made the decision
not to include the fiscal cost of abatement in the customer guidelines
.
Percentage reduction in carbon emissions intensity
4.8 The
reduction in carbon emissions intensity is the predicted change in the
tonnes of greenhouse gases emitted for each unit of output produced by a manufacturer
once the proposed emissions reduction measure has been
