Company implications of EEOP Verification

ASMC Board2 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.

Workplace Improvement Team (WIT) Member

Objectives 1. Continually improve our people, our production, our plant 2. Collectively and co-operatively identify ways to optimise the use of our resources 3. Proactively develop cost-saving initiatives to provide a sustainable future for PSM

Responsibilities

Communication

Communicate with the employees: “Be the voice of the employees” Be a Team Player - Work positively and proactively as a team! Provide feedback to the employees Consult with Proxy, EBA, Employees and Management

3 I

Ideas Encourage employees to contribute and participate Collate ideas from the employees Be open-minded and think outside of the square

Investigate

Evaluate viability of ideas thoroughly Participate in the development of cost saving initiatives Realistically pursue;

Cost-saving ideas Efficiency improvements

Initiate

Give ideas the best possible chance of being agreed and implemented

Results

Improve PSM Reduce Waste Enhance efficiency

Reduce costs Improve workplace

Make PSM sustainable for the future Get Positive Results!

Star Performance

ZeroHarm

Production

FinancialResponsibility

HumanResource

Development

Quality

Thank you.