35Liable entity—supply of natural gas to a person who quotes the person’s OTN

#### 35 Liable entity—supply of natural gas to a person who quotes the person’s OTN Preliminary emissions number (1) For the purposes of this section, if: (a) during an eligible financial year, a natural gas supplier supplies an amount of natural gas to another person (the OTN holder) who quotes the OTN holder’s OTN in relation to the supply; and (aa) it may reasonably be expected that the natural gas is wholly or partly for use by the OTN holder; and (b) the natural gas is withdrawn from a natural gas supply pipeline for the purposes of the use; and (c) the withdrawal takes place in Australia; and (d) the potential greenhouse gas emissions embodied in the amount mentioned in paragraph (a) have a carbon dioxide equivalence of a particular number of tonnes; that number is a preliminary emissions number of the OTN holder for the eligible financial year. (2) If: (a) the OTN holder’s OTN was quoted in relation to the supply of an amount of natural gas to the OTN holder in compliance with section 55B, so far as that section relates to a particular large gas consuming facility; and (b) the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount of natural gas is, or is to be, combusted in the operation of the facility; and (c) an amount of covered emissions from the operation of the facility is, or will be, attributable to the combustion of the relevant portion; paragraph (1)(d) has effect as if the amount mentioned in that paragraph did not consist of or include the relevant portion. Provisional emissions number and liable entity (3) If the OTN holder has, under subsection (1), one or more preliminary emissions numbers for the eligible financial year, then, for the purposes of this Act: (a) the sum of the preliminary emissions numbers is a provisional emissions number of the OTN holder for the eligible financial year; and (b) the OTN holder is a liable entity for the eligible financial year. Reduction of provisional emissions number (4) If: (a) the OTN holder has, under subsection (3), a provisional emissions number for an eligible financial year; and (b) the OTN holder has one or more netted‑out numbers for the eligible financial year (see subsections (5) to (9)); the provisional emissions number is to be reduced (but not below zero) by the total of those netted‑out numbers. Netted‑out numbers (5) For the purposes of this section, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, the OTN holder uses the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount mentioned in paragraph (a): (i) as feedstock; or (ii) in such a way as to not emit any greenhouse gases; and (c) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (c) is a netted‑out number of the OTN holder for the eligible financial year. (6) For the purposes of this section, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, an amount of covered emissions from the operation of a facility (other than a large gas consuming facility) was attributable to the combustion of the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount mentioned in paragraph (a); and (c) the covered emissions mentioned in paragraph (b) count for the purposes of subsection 20(1), 21(1), 22(1), 23(1), 24(1) or 25(1); and (d) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (d) is a netted‑out number of the OTN holder for the eligible financial year. (6A) For the purposes of this section, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, an amount of covered emissions from the operation of a facility was attributable to the combustion of an amount of compressed natural gas that was manufactured at the facility using the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount mentioned in paragraph (a); and (c) the covered emissions mentioned in paragraph (b) count for the purposes of subsection 20(1), 21(1), 22(1), 23(1), 24(1) or 25(1); and (d) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (d) is a netted‑out number of the OTN holder for the eligible financial year. (7) For the purposes of this section, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, the OTN holder uses the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount mentioned in paragraph (a) to manufacture: (i) compressed natural gas; or (ii) liquefied natural gas; or (iii) liquefied petroleum gas; and (d) the compressed natural gas, liquefied natural gas or liquefied petroleum gas, as the case may be, is entered for home consumption; and (e) excise duty is or was payable by the OTN holder or another person on the compressed natural gas, liquefied natural gas or liquefied petroleum gas, as the case may be; and (f) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (f) is a netted‑out number of the OTN holder for the eligible financial year. (8) For the purposes of this section, if: (a) the OTN holder quotes the OTN holder’s OTN in relation to a supply to the OTN holder of an amount of natural gas; and (b) during an eligible financial year, the OTN holder supplies the whole or a part (which whole or part is in this subsection called the relevant portion) of the amount mentioned in paragraph (a) to another person; and (c) the potential greenhouse gas emissions embodied in the relevant portion have a carbon dioxide equivalence of a particular number of tonnes; the number mentioned in paragraph (c) is a netted‑out number of the OTN holder for the eligible financial year. (9) The regulations may provide that, for the purposes of this section, a number ascertained in accordance with the regulations is a netted‑out number of an OTN holder for an eligible financial year ascertained in accordance with the regulations.