Clean Energy Regulator announces sixth Emissions Reduction Fund auction
The Clean Energy Regulator will hold the sixth Emissions Reduction Fund auction on Wednesday 6 and Thursday 7 December 2017.
The Emissions Reduction Fund, a core component of the government's Direct Action Plan on climate change launched with funds of $2.55 billion on July , 2014, is a voluntary scheme that aims to provide incentives for a range of organisations and individuals to adopt new practices and technologies to reduce their emissions.
It is enacted through the Carbon Credits (Carbon Farming Initiative) Act 2011, the Carbon Credits (Carbon Farming Initiative) Regulations 2011 and the Carbon Credits (Carbon Farming Initiative) Rule 2015.
Clean Energy Regulator Chair, David Parker, said it is important to have regular purchasing events to allow the market continued access to the scheme, and to keep building the abatement portfolio.
"After five successful auctions, the auction process is now business-as-usual with the pace of new project registrations naturally steadying to more sustainable levels. Having grown substantially in the last few years we are seeing a strong focus on project implementation and an emerging secondary market."
"In light of this, an auction in the range of $75 million to $150 million is possible, although I am quite comfortable contracting more or less volume at this auction depending on offered volumes and prices," Mr Parker said.
"We again advise participants to bid at the lowest price that you can undertake your project to avoid disappointment. The record shows there is a high probability of getting a contract if you bid competitively."
This auction announcement comes after the release of the plantation forestry method, providing opportunity for new sectoral engagement in the Emissions Reduction Fund. Those wanting to participate under the plantations method should contact the Clean Energy Regulator as soon as possible to discuss the logistics and timing of registering their project.
There is more than $300 million still available in the Emissions Reduction Fund and additional purchasing processes are expected to occur in 2018. The Clean Energy Regulator will assess December auction bids knowing that new methods will bring fresh participation next year.
Participants can register a project at any time without having to seek a contract for their abatement with the government.
A number of activities are eligible under the scheme and participants can earn Australian carbon credit units (ACCUs) for emissions reductions.
One ACCU is earned for each tonne of carbon dioxide equivalent (tCO2-e) stored or avoided by a project. ACCUs can be sold to generate income, either to the government through a carbon abatement contract, or in the secondary market.
To ensure these emissions reductions are not displaced significantly by a rise in emissions elsewhere in the economy, the Emissions Reduction Fund also includes a safeguard mechanism, which encourages large businesses to keep their emissions within historical levels.
More information about the auction is available here.