Licence fee system
The licence fee system (LFS) is based on ‘user pays’ and ‘polluter pays’ principles, where licence fees reflect the EPA’s regulatory effort as well as the amount and type of pollutants discharged to the environment.
The LFS enables the EPA to:
- recover, in an efficient and equitable manner, the costs we incur due to the assessment and environmental management of licences
- provide an economic incentive to reduce pollution.
Components of the LFS
The one-off application fee consists of two components:
The annual licence fee consists of three components:
- flat minimum fee
- environment management fee
- resource efficiency fees (comprising load based fees and a water reuse fee).
The LFS model was determined so that the split between these components is:
- 1% flat minimum fee
- 39% resource efficiency fee
- 60% environmental management fee.
The lodgement fee covers the initial setup component of processing a licence application.
The assessment fee reflects the time taken by technical and administrative staff to assess each activity and prepare the licence conditions for each of those activities.
The flat minimum fee covers the basic administration work common to all licences.
The environment management fee (EMF) reflects the regulatory effort, which is aligned to environmental risk, for managing an activity. This fee is based on the activity that incurs the highest fee of all activities carried out on a site.
Waste transport, dredging and earthworks drainage, if applicable, are an additional charge.
When a licence application is made, or each year when licence holders lodge an annual return, licence holders are required to select the level of activity they expect to undertake in the coming year. In this way, the EMF is always calculated based on projected activity levels for the coming year.
If licence holders then operate at a higher or lower for that year, they are obliged to notify the EPA. The Environment Protection (Regulations) 2009 set out the circumstances in which an adjustment of annual authorisation fee can be requested and made.
There are two types of resource efficiency fees (REF), which only apply to a subset of licences:
- Pollutant load fees are for the discharge of key pollutants from the licensed site to the environment (air or water). Emission thresholds apply to ensure that only significant emissions are captured.
- Water reuse fee for the discharge of fresh water to the marine environment.
It is important to note that REF is calculated retrospectively and is for emissions that have been emitted in the preceding full year period.
Most licence holders give consent for the EPA to use the most recently published National Pollutant Inventory (NPI) data. Alternatively, a licence holder can supply their own data and this would then be reviewed by the EPA for validity and consideration.
Due to differences in timing of licence anniversary date and NPI publication, this data can be over one year old by the time it is used. For example calendar year 2015 NPI report published March 2017 (2015–16 period) and available to the EPA for use anytime up until March 2018.