Emissions Reduction Fund auction sees 6.67m tonnes of carbon abatement
The Clean Energy Regulator has purchased 6.67 million tonnes of carbon abatement through 32 carbon abatement contracts in the seventh Emissions Reduction Fund auction on 6–7 June.
The purchasing resulted in an average price per tonne of abatement of $13.52, which is the weighted average price for each Australian carbon credit unit purchased at this auction.
Clean Energy Regulator Chair David Parker said that volume purchased and prices at this auction were similar to the previous auction.
“We notified the market in March that we expected to purchase in the range of $50–$100 million, and we have done just that—committing $90 million at this auction.”
Almost $250 million in funding remains for future purchasing events, which the Clean Energy Regulator will announce in the second half of this year.
“After three years of operation, it is pleasing to see new participants coming forward, demonstrating that the industry is continuing to develop,” Mr Parker said.
“As we have moved into a more business as usual phase of the scheme, we have seen the volume of abatement purchased auctions stabilise. We are pleased that contracted abatement at this auction has broadly maintained the current portfolio.”
With the delivery of contracted abatement currently ahead of schedule, the Clean Energy Regulator’s priority is to continue working with participants to meet their project and contract obligations.
“We remain committed to working with scheme participants so they understand and comply with all obligations under the scheme,” Mr Parker said.
“Scheme integrity across the crediting and purchasing elements of the scheme is paramount. We are focussed on securing genuine and additional carbon abatement through the scheme.”
With demand for ACCUs expected to continue to increase in the coming twelve months, Mr Parker encouraged interested participants to register their project at any time without waiting for an auction to participate.
The Emissions Reduction Fund 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. 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.
For full results from the seventh Emissions Reduction Fund auction, see Auction June 2018.