Company implications of EEOP Verification ASMC Board 2 March 2010

What is the Energy Efficiency Opportunity Program (EEOP)? The overall objective of the Energy Efficiency Opportunities Act 2006, outlined in section 3 of the Act are: (1)…to improve the identification and evaluation of energy efficiency opportunities by large energy using business, and as a result, to encourage implementation of cost effective energy efficiency opportunities.

How have we managed EEOP to date Mills have taken a minimum compliance approach – why? Because most energy efficiency opportunities require >2- 4 year payback period – seem to be reporting for sake of reporting expected EEOP to disappear with a carbon price Have continued to advocate federally for the removal of sugar - we now know this almost certainly will not happen. No matter how the national discussion goes, it is unlikely this program will disappear in the next five years.

EEOP in the broader national agenda Bipartisan support No matter how the national discussion on carbon goes, it is unlikely this program will disappear in the next five years.

What does verification mean for mills? Mills minimum compliance approach (retrospectively applied) will generally meet the technical requirements of the program – but not the other five key elements, meaning – Mills annual assessments will generally be compliant – Mills desktop verification will generally be considered high risk – Mills site audit (full verification) is more likely to be non- compliant. Deliberate non-compliance attracts both civil and criminal penalties for the company. Most companies will already have the mechanisms and processes for compliance – it’s a question of how to integrate EEOP into them.

Where are the problem areas? Leadership – Is EEO clearly identified in your organisational charts, internal planning and budgets? People – evidence of multiple (appropriate) people involved in the analysis of data (who, skills, experience) Information, data and analysis – evidence that business, operational and energy information is collected and analysed for current and future impact on energy use and opportunities, measurement of uncertainty. Opportunity identification and evaluation –opportunity areas identified, evidence of a process, business evaluation, why opportunities not pursued. Decision Making – evidence management involved in project assessment, resourcing and accountability. Communicating outcomes – Board awareness of strategic business context, public reporting, benefits of improved energy efficiency outcomes and awareness within organisation.

Next steps Start educating your board on EEOP responsibilities – and document it. Review your existing documentation – e.g. Strategic plans, budgets, resource allocation, work schedules, environmental planning, organisational structure. Can you readily integrate EEOP requirements into these documents? If you need new documents, can you use these to fulfill other reporting obligations? i.e. capture everything – once! Think about what else you can leverage within your business, e.g. Proserpine Workplace Improvement Team.

Thank you.