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EREP - frequently asked questions

The following provides some of the key questions that have been raised by EREP stakeholders to date. They do not replace the content of the Environment Protection Act 1970, Environment Protection (Environment and Resource Efficiency Plans) Regulations 2007 and  Environment and Resource Efficiency Plans Guidelines which will be available in January 2008.

FAQ sections:

  • EREP Program Scope
    1. Who will need to participate in the Environment and Resource Efficiency Plans (EREP) program?
    2. Does  the EREP program include sites that are not licensed by EPA?
    3. Does the program apply to entire corporate entities?
    4. Is the EREP program  mandatory?
    5. Which sites are excluded from the program?
    6. What are the definitions of water, energy and waste for the purposes of determining whether a site must participate in the program?
    7. Why is it necessary to introduce another resource efficiency program alongside existing programs?
    8. How have the Regulations changed following public consultation? 
  • Registering in the EREP program
    1. When do sites need to register for the EREP Program?
    2. How do sites register in the progam?
    3. What sort of information will be made public about sites participating in the program ?
  • Preparing an EREP
    1. If a site triggers only the energy or water threshold, do all elements need to be considered in the plan?
    2. Can multiple sites be included in a single plan?
    3. Isn’t this all going to cost business money?
    4. How might EREP timing fit in with other investment and reporting cycles?
    5. Is it possible to do assessments and audits internally ( i.e. by staff rather than consultants)?
    6. What does payback period mean?
    7. How will an EREP be approved?
  • Implementing EREP
    1. Can a plan be amended if a preferred action changes due to shifts in opportunities and resource price?
    2. Can a participant get credit for projects that have a payback period greater than three years?
  • Annual reporting
    1. Do reports need to be prepared on a calendar or financial year basis?
  • Exemptions based on an alternative plan and extensions
    1. Are sites able to apply for an  exemption from preparing a plan because they have an alternative plan?
    2. Can sites apply for an extension to prepare their EREP?

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EREP Program Scope

1. Who will need to participate in the Environment and Resource Efficiency Plans (EREP) program?

From 1 January 2008, the largest industrial and commercial users of energy and water in Victoria need to participate in the EREP program. This includes manufacturing, heavy industry, some commercial buildings, retail, government sites, universities and sporting and recreation venues. The program does not apply to agricultural primary production and residential housing.

Industrial sites that use more than 120 megalitres (ML) and/or 100 terajoules (TJ) of energy in a financial year from 2006/07 must participate in the program.

2. Does the EREP program include sites that are not licensed by EPA?

Yes. EPA’s Industry Greenhouse Program (IGP) applied only to licensed sites and demonstrated the value of this approach to regulating resource efficiency. The EREP program applies to all large users of energy and water (including sites not traditionally regulated by EPA, such as shopping centres) and will facilitate environmental and economic benefits to business.

3. Does the program apply to entire corporate entities?

No. Participation is based on individual premises. For corporations with multiple sites subject to EREP, a consolidated registration, planning and reporting process will be available. Generic plans will not be accepted.

4. Is the EREP program mandatory?

Yes. If energy and/or water use thresholds are exceeded at a site, then participation in the program is mandatory and enforceable. Once approved, the EREP is a legally binding document. Sites must implement actions with a payback period of three years or less. If opportunities arise and priorities change over time, an EREP may be substituted by agreement with EPA.

Many firms do not routinely measure their resource use or waste generation and in many cases where cost-effective resource efficiency actions have been identified, other factors limit implementation.

EREP is designed to deliver bottom line financial benefits to business while achieving environmental outcomes. EREP builds on the experience of the Industry Greenhouse Program (IGP) which, through mandatory implementation, is expected to save business in Victoria over $38 million per annum by the end of 2007. IGP showed that significant energy efficiency opportunities exist, and can be realised. 

5. Which sites are excluded from the program?

Sites that are primarily used for residential housing and primary production will be excluded from the EREP program. Intensive agriculture, such as feedlots, piggeries or poultry farms are included.

6. What are the definitions of water and energy for the purposes of determining whether a site must participate in the program?

The Regulations set resource use thresholds of 100TJ of energy and 120 ML of water. A site that exceeds one or more of these resource use thresholds in any financial year from 2006/07 must participate in the EREP program. The threshold definition of energy includes all energy imported to the premises (such as electricity and steam), energy that is consumed by stationary or mobile equipment operated on site (such as LPG, diesel and natural gas) and energy used in electrolytic or metallurgic processes. Energy use does not include energy sold and not used on site, energy produced and stored or material that is a potential energy source but is disposed of as a waste or used for another purpose. The energy threshold for participation in EREP (100 Tj per year) is the approximate equivalent of 27, 000 megawatt hours of electricity or 2,700 kilolitres of industrial diesel or 3,900 kilolitres of LPG. Schedule 1 of the Environment Protection (Environment and Resource Efficiency Plans) Regulations 2007 sets out the energy and energy sources.

The threshold definition of water includes urban water and any other water provided by a legal agreement (except for recycled water and water supplied as part of an environmental allocation). That is, water provided by an urban water corporation and water provided by rural water corporations (eg. through bulk entitlements, licensed groundwater extraction) . The water sources in the threshold definition are set out in Regulation 5(4) of the EREP Regulations.

After registration, a plan is to include all forms of water used at the site including recycled water, rainwater. This will provide a more complete picture of how water is used in processes at the site. The water sources to be included in an EREP are defined in Regulation 4: Definitions in Regulation 5(4) of the Environment Protection (Environment and Resource Efficiency Plans) Regulations 2007. 

7. Why is it necessary to introduce another resource efficiency program alongside existing programs?

The EREP program requires businesses to identify actions that reduce energy andwater use and waste generation. This is distinct from existing resource efficiency programs that generally focus on a single resource. The EREP program is also different because it mandates implementation of cost effective actions.

8. How have the Regulations changed following public consultation?

EPA made the following key changes to the Regulations following consultation:

  • Extended the period for site closure / substantial activity change exclusion from the progam from 12 months to 24 months
  • Clarified the definition of ‘payback’ by changing the wording from ‘initial capital cost of implementation’ to ‘initial investment’
  • Increased flexibility around annual reporting by allowing participants to report either on a financial year basis or based on any other 12 month period approved by the Authority
  • Annual reports to be submitted within 3 months of the end of the relevant reporting period
  • Removed the requirement to update payback calculations each year
  • Added a process for an EREP to be revoked when a site closes down
  • Added a 7 year sunset for the Regulations to allow for a single EREP cycle and earlier evaluation of the program

For a more detailed explanation of how submissions were taken into account in finalising the Regulations, see the EREP Response to Comments publication.

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Registering in the EREP program

9. When do sites need to register for the EREP program?

Sites that exceeded either of the resource use thresholds in 2006/07 needed to register in the EREP program between 1 January and 31 March 2008. Sites that exceed a threshold in any financial year after the commencement of the program must register with the EPA within three months of the end of that financial year.

10. How do sites register in the program?

To assist sites in registering for the EREP program, EPA has an on-line registration and reporting system. From January 2008, the system can be accessed at www.epa.vic.gov.au/erep  

11. What sort of information will be made public about sites participating in the program?

Some information submitted by sites at registration will be made public in the program’s register of scheduled activities. This register will list EREP participants and over time may show the progress of businesses in implementing their EREP. EPA will not publish commercially sensitive information, such as site specific resource use and waste data, plans and annual reports.

The register of scheduled activities will contain the following information:

  • company name
  • site location (suburb/town)
  • description of activities
  • resource use thresholds triggered (energy and/or water)

 

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Preparing an EREP

12. If a site triggers only the energy or water threshold, do all elements need to be considered in the plan?

Yes. One of the aims of the EREP program is to  improve the overall efficiency of businesses' operations  through addressing energy, water and waste.

13. Can multiple sites be included in a single action plan?

Yes. A company may register and submit a single plan for multiple sites as long as the actions for specific sites are listed separately. It is also possible for a participant to choose to apply the EREP approach to its whole business, and this could increase the gains to be found by the company.

14. Isn’t this all going to cost business money?

The IGP experience demonstrates that identifying actions to improve resource efficiency saves businesses money. The EREP program only requires the implementation of energy, water or waste efficiency actions that result in cost savings to business. The aim of the program is to realise both environmental and economic benefits. 

15. How might the EREP program timing fit in with other investment and reporting cycles?

The EREP program is flexible to allow businesses to align investments and actions with other business processes. The reporting period is either a financial year or another 12 month period as agreed with EPA. Reports must be submitted to EPA within three months of the end of each reporting period.

16. Is it possible to do assessments and audits internally (i.e. by staff rather than consultants)?

Yes. An EREP requires a thorough assessment of energy, water and waste reduction opportunities and should be prepared by a team with the necessary qualifications and expertise. This could be carried out in-house or with asssitance from external EPA consultants.

17. What does payback period mean?

The payback period is a period expressed in years, calculated in accordance with this formula:

 Payback period  =

Initial investment
----------------------------------
Net annual savings

A simple payback formula enables different businesses to consistently and transparently to calculate the payback period for actions in their EREP. 
Further guidance is provided in the Guidelines and EREP Toolkit Module 4 - Calculating payback periods.

18. How will an EREP be approved?

EPA will assess an EREP against the criteria set out in the Regulations and explained in the EREP Guidelines. EPA will assesss the EREP within four months of acceptance. As part of the assessment of an EREP, EPA may conduct third party verifications of plans.

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Implementing EREP

19. Can a plan be amended if a preferred action changes due to shifts in opportunities and resources price?

Yes. If after a site's EREP is approved, the activities at the site change and/or the proposed actions need to change, sites may apply to EPA to substitute a new EREP in place of the approved EREP.

20.Can a participant get credit for projects that have a payback period greater than three years?

Any financially viable action to improve resource efficiency can be included in an EREP. While only those actions with a three year or better payback period are required to be implemented, EPA strongly encourages participants to consider implementing options beyond the three year payback that reduce resource use and/or waste generation.

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Annual reporting

21. Do reports need to be prepared on a calendar or financial year basis?

EPA has provided flexibilty in the timing of reporting under the EREP program.  The reporting period is either a financial year or any other 12 month period as agreed with EPA. Reports must be submitted to EPA within three months of the end of each reporting period.

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Exemptions based on an alternative plan and extensions

22. Can sites obtain an exemption from preparing a plan if they have an alternative plan?

To avoid duplication of existing work, if you have an existing resource efficiency action plan, you may apply for a complete or partial exemption from the requirement to prepare an EREP. Any application for a complete or partial exemption needs to be made during the program registration period. Further details on exemptions are in the EREP Guidelines.


23. Can sites apply for an extension to prepare their EREP?

Sites that used between 100 and 250 TJ of energy and/or between 120 and 150 ML of water in the 2006/07 financial year, may request up to an additional 12 months to submit an EREP. Any application for extension must be made before the end of the registration period (31 March 2008). EPA will advise you if your application has been successful and the duration of any extension granted.

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