Next emissions reduction fund auction called for December
The Clean Energy Regulator has announced that the eighth Emissions Reduction Fund auction will be held from 10–11 December 2018.
David Parker, Chair of the Clean Energy Regulator, said these regular purchasing events are important to promote development of the carbon abatement market.
“This is a great opportunity for interested market participants to come forward with competitive bids at auction and secure a contract. As always, our focus is to purchase the best value abatement available,” Mr Parker said.
Each auction is different, with a changing mix of interested parties and project method types. Participants who missed out in previous auctions are encouraged to take part in December.
For the first time, participants can register projects that both reduce emissions and store carbon on land that would otherwise be subject to more intense and higher emitting savanna fires. This may be of particular benefit to indigenous communities.
An innovation being offered for this auction is that, in addition to existing contracting arrangements, the Clean Energy Regulator is open to entering into contracts that are contingent on the participant entering into a further Australian carbon credit unit (ACCUs) contract with a third party. This is intended to help broaden the availability of ACCUs to the private market.
“The Clean Energy Regulator can be a foundation buyer, but doesn’t necessarily need to be the sole buyer of carbon abatement generated by eligible projects,” Mr Parker said.
“By offering a new flexible arrangement where participants can enter into a contract with us, and subsequently a third party, we hope that the market innovates in response to the varied options available to finance and structure their project.”
“In terms of the amount of funds we commit, I expect this auction will be similar to those held in recent times. As with auction seven, at auction eight we are able to purchase between 25 and 100 per cent below the benchmark price.”
Of the 429 total Emissions Reduction Fund contracts—committing the government to purchase 192 million tonnes of abatement—over 31 million tonnes of abatement has already been delivered.
More than $249 million in funding presently remains in the Emissions Reduction Fund. Those interested in participating in this auction have until 26 October 2018 to apply to register their project(s), and until 9 November 2018 to qualify to participate in the auction.
The auction guidelines and details about the auction process is available here.