3Establishment of scheme and objects

3 Establishment of scheme and objects

3 Establishment of scheme and objects

(1) There is established by this Regulation a tradeable emission scheme, to be known as the Hunter River Salinity Trading Scheme, to provide for the management of discharges of saline water into the Hunter River catchment.

(2) The objects of the scheme are:

(a) to minimise the impact of discharges of saline water on irrigation, other water uses and on aquatic ecosystems in the Hunter River catchment:

(i) at the lowest overall cost to the community, and

(ii) in a way that provides ongoing financial incentives to reduce pollution, and

(b) to facilitate sustainable water management by industry in the Hunter River catchment.

Note—

Overview of scheme

Under the scheme provided for by this Regulation, discharges of saline water into the Hunter River catchment are permitted only during periods when the Hunter River is considered to be in high flow or flood flow, and only by persons who hold licences that authorise such discharges (discharge licences).

During high flow periods, a discharge licence holder is entitled to discharge saline water only if the discharge licence holder holds one or more credits in the scheme. During flood flow periods, the amount of saline water that may be discharged by a discharge licence holder is unlimited, subject to the salinity targets and any overriding limit that may be applied by the EPA as a condition of the discharge licence. However, the EPA is authorised in certain circumstances to require discharges to be made in accordance with credit holdings, even during flood flow periods. The rules relating to discharges are set out in Parts 2 and 3.

Credits in the scheme are created by the EPA. Credits have a limited lifespan of not more than 10 years. The EPA creates and sells new credits as existing credits expire. Provisions relating to the creation and sale of credits are set out in Part 4.

A credit entitles a discharge licence holder to discharge 0.1% of the total allowable discharge of salt for the Hunter River catchment. The total allowable discharge is determined on a day-to-day basis, by reference to the salinity targets for the Hunter River catchment. The more credits the discharge licence holder holds, the more saline water the discharge licence holder is entitled to discharge. However, the timing of any discharge is subject to very specific rules.

A credit is transferable in accordance with this Regulation. Any person may buy, hold and trade in credits. A credit does not confer any authority on the holder to discharge saline water unless the person also holds a discharge licence and the credit is assigned to an authorised discharge point specified in that discharge licence. Provisions relating to the assignment of credits to an authorised discharge point are set out in Part 4A. Provisions relating to the trading of credits are set out in Part 5.