Participating in the Emissions Reduction Fund

Transcription

1 Participating in the Emissions Reduction Fund

2 The Emissions Reduction Fund Economy-wide, voluntary program Government to purchase emissions reductions from businesses $2.55 billion in initial funding

3 Why participate? Benefits include: - Revenue through selling carbon credits $2.55 billion available from the start - Cost savings - Efficient use of energy - Reputational advantage - Other environmental benefits, like improved soil and water quality

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5 Method development and approval Industry advice on priority methods Minister sets method priorities TWG ERAC assessment and advice Draft method released for public consultation Independent technical review ERAC assessment and advice Minister makes determination Approved method released on ComLaw

6 Method priorities Potential uptake Likely volume of emissions reductions Certainty and cost of estimate Adverse impacts Promotion through other means

7 Emissions Reduction Assurance Committee ( ERAC ) Replaces the Domestic Offsets Integrity Committee Advises on method development priorities Assesses draft methods and advises Minister Genuine reductions Practical Cost-effective

8 1) Choose a method Method: rules for running a project Includes requirements for: eligibility; monitoring; calculating emissions reductions; and reporting Ensures emissions reductions are genuine and additional A menu of methods will be available to accommodate a wide range of emissions reduction opportunities

9 Choose a method Methods Available 26 existing Carbon Farming Initiative methods Commercial building energy efficiency Land and sea transport Aviation Coal mine waste gas Avoided clearing of native regrowth Landfill gas capture Alternative waste treatment

10 Choose a method Methods Under Development Aggregated small energy users Avoided land clearing Herd Management of Beef Cattle Savanna fire management Wastewater treatment Sequestering soil carbon (default values) Facilities Designated verified carbon standard project Fertiliser Use Efficiency in Irrigated Cotton Industrial Fuel and Energy Efficiency Reforestation

11 CER 4 steps Participating in the ERF 02/03/

12 Apply become a client You must: become a client of the Clean Energy Regulator pass the fit and proper person test Required information: compliance with business, environmental protection & WHS law Participating in the ERF 02/03/

13 Apply register a project What will we consider? Eligibility Newness, regulatory additionality and government programme requirements demonstrated legal right and responsibility for the project consistency with the method Participating in the ERF 02/03/

14 Additionality Criteria for genuine emissions reductions: covered by methodology determination, must be new, must not be required by law/regulation, must not be funded by another Government programme listed in the Rule

15 Government programme requirement Ensures that emissions reduction activities are paid for once Participants must choose between the ERF and other schemes: 20 million trees State-based energy efficiency activities Federal Government Renewable Energy Target (some exceptions)

16 Contracts Entering into a Carbon Abatement Contract is a 3 step process: Step 1: Auction qualification code of common terms, commercial terms including indicative volume Step 2: Auction registration delivery terms (including delivery schedule) Step 3: Auction participation financial terms Participating in the ERF 02/03/

17 Crediting and contract periods Contract (up to 7 or 10 years) Crediting period (7 25 years) Permanence period (25 or 100 years)

18 Auctions The first auction is scheduled for the 15 and 16 April Auction participation is not mandatory. The auction is a single-round, pay-as-bid, sealed-bid auction format. minimal bid size 2,000 tco2-e / y over the life of the contract Standard contract If a project is not successful it can be re-bid into a subsequent auction. Participating in the ERF 02/03/

19 Reporting How? When? submit a project report, and an audit report if required by your schedule every six months to two years for emissions avoidance projects or six months to five years for Participating in the ERF 02/03/

20 Delivery and Payment Deliver according to the delivery schedule in the contract. The Clean Energy Regulator will pay the price agreed to at auction and set out in the contract for those units. Transactions will occur in ANREU. Participating in the ERF 02/03/

21 Aggregation The ERF will facilitate the aggregation of emissions reductions across projects and activities Removing barriers No property interest required Streamlined project information Single bid and contract

22 Process for large projects Substantial single contribution > tonnes a year on average Longer crediting period where beyond common practice

23 Safeguard mechanism - operation Coverage: Scope 1, NGERS, Annual emissions >100,000 t CO2-e From 1 July 2016 Baselines: Absolute emissions Historical high point Facility based

24 Safeguard mechanism consultation Flexible compliance arrangements Treatment of new entrants Treatment of the electricity sector White Paper released ERF legislation enacted Consultation on flexible compliance arrangements, treatment of new investments and treatment of electricity sector Consultation on draft legislative rules Legislative rules finalised Safeguard mechanism commences April 2014 Nov 2014 Early 2015 Mid 2015 By 1 Oct July 2016

25 Who s involved? The Clean Energy Regulator administers the ERF including managing contracts and running auctions. The Department of Environment develops new methods for businesses to use under the ERF. AusIndustry provides information and advice on the ERF to business.

26 Summary The ERF is a $2.55 billion opportunity for businesses to earn money by reducing their emissions How to access the Fund: Identify an emissions reduction project for your business Ensure that your project is covered by an approved method Register your project and carry it out according to the method Report to receive carbon credits from the CER Sell the credits either to Government through auctions or to other businesses through the secondary market.

27 Further information Subscribe to Emissions Reduction Fund updates at: For project facilitation assistance from AusIndustry

28 Questions?