Document ID: chunk:federal_register_of_legislation:F2021L01011:reg:20:p3
Version: federal_register_of_legislation:F2021L01011
Segment Type: reg
Provision Reference: reg 20 (pt 3/3)
Character Range: 30232–32842

event
 (6) For paragraph (5)(c), a regulatory change event occurs if:
 (a) there is a change to Commonwealth, State, Territory or local government regulatory settings (including relevant laws, subordinate legislation or regulatory approvals) that materially increases costs for the refinery; and
 (b) the change is not a change to fuel quality standards that the refinery has been funded, or offered funding, by the Commonwealth to implement; and
 (c) the impact of the change makes the refinery commercially unviable.
Commercially unviable
 (7) For subsection (2) and paragraph (6)(c), a refinery is commercially unviable if the continued operation of the refinery is reasonably likely to result in:
 (a) the refinery operating continuously below a quarterly margin of 4.6 cents per litre (not taking into account fuel security services payments) for at least the next 9 months; or
 (b) the refinery operations recording losses of at least $60 million within the next 9 months; or
Note: The expectation of losses would take into account fuel security services payments and other support for the refinery, such as financial support provided by the Commonwealth.
 (c) the refinery operations not achieving a commercial return on investment (such that the net present value (NPV) of the asset would be less than zero over the refinery's commitment period); or
(d) material ongoing losses that the Minister considers sufficient to make the refinery unviable from a commercial perspective.
 (8) For subsections (5) and (7), losses means EBITDA minus normalised capital expenditure, where normalised capital expenditure means the average capital expenditure across a 5 year period (which ends at the end of the 9 month or less period under paragraph (5)(b) or the 9 month period under paragraph (7)(b), as applicable), and is pro rata adjusted to the relevant period of assessment.
Operationally unviable
 (9) For paragraph (2)(a), a refinery is operationally unviable if it is not reasonably practicable for operational reasons to operate the refinery, or bring the refinery back into operation, on an ongoing basis in substantially the same manner as prior to the force majeure event.
Relevant independent analysis
 (10) For paragraph (2)(c) and (4)(d), relevant independent analysis must include independent engineering, operational, market and financial analysis that is:
 (a) prepared by appropriately qualified experts with access to:
 (i) all relevant records of the refinery operator; and
 (ii) EBIT and EBITDA for the refinery; and
 (b) relevant and proportionate to the matters which need to be evidenced.