Emissions units allocated to owners of fishing quota

Background

The application of the Emissions Trading Scheme to liquid fossil fuels will increase the cost of diesel, which is one of the major costs in the fishing sector. Section 74 of the Climate Change Response Act 2002 provides for the allocation of emissions units to owners of fishing quota to compensate them for the fall in value of fishing quota expected to result from the impact of the increase in the cost of diesel.

Key features

The amendment in section CX 51C provides that when a person who owns fishing quota is allocated an emissions unit to compensate them for the fall in value of that fishing quota and then disposes of that unit, no taxable income arises. The provision does not apply if the person holds the fishing quota on revenue account.

Consequential amendments are made to sections CB 36(10), DB 61, and ED 1(5B).

Application date

The amendment applies from 1 July 2010