Climbing through the carbon maze

Navigating the Carbon Maze

With Australia’s carbon policy changing on what seems like a weekly basis staying up to date and identifying opportunities to get involved in voluntary programs can be frustrating as well as consuming valuable time that could be better spent elsewhere. If you need help navigating the carbon maze, read on…

Current status of Australia’s carbon policy

The Federal governments two main carbon policy objectives are;

  • the repeal of the Carbon Pricing Mechanism (CPM) and
  • the introduction of the Direct Action Plan (DAP) with the Emissions Reduction Fund at front and centre.

Since writing this article a week ago there has already been a major development that will shape future carbon policy in Australia. Initially there was a set back to the proposed changes with the Senate voting down the repeal of the CPM and associated legislation, and the introduction of the DAP. In the last week Clive Palmer has confirmed that his Palmer United Party (PUP) senators will support the repeal of the CPM but will not support the DAP. Which puts the Abbot lead government in a precarious position of not having a plan to meet its Kyoto targets. In addition, the PUP will vote against any changes to the Renewable Energy Target (RET) and the Clean Energy Finance Corporation. What it all boils down to is continuing uncertainty surrounding Australia’s carbon policy and how it may impact your business.

NGERS – The Lull before the Storm

Regardless of where the axe falls, Australia’s carbon policy and regulation will continue to be underpinned by the NGER scheme. As the financial year draws to a close, so does the 2013/14 NGER scheme reporting period.

For some, completing an annual greenhouse gas assessment to satisfy NGER obligations is seen as a ‘tick-and-flick’ type exercise, for others, detailed consideration of carbon emissions and the sensitivity of business activities to a carbon price are core business considerations.

The writing is on the wall and it is generally understood that your carbon emissions, or carbon emissions through your supply chain, will cost you money somewhere along the way. In simple terms:

1 tonne carbon = $576 diesel or $183 electricity*
*384L @$1.50/L, 1,220kWh @15c/kWh

How well do you understand your carbon emissions?

Understanding your carbon emissions and evaluating your carbon mitigation options are key to the continued success of any facility or corporation with NGER scheme reporting obligations. The call for an overall reduction of carbon emissions is set to become more urgent as time goes on.

The better that you understand your emissions now, the better position you will be in to understand the impacts of the changing carbon landscape on your business. Even in the absence of a carbon price, understanding your carbon emissions and having a practical carbon management plan are an essential component of business sustainability.

A proactive approach to carbon management, and similar expectations throughout your supply chain, are a sensible risk management strategy .

Emission Reduction Fund (ERF)

The Emissions Reduction Fund (ERF) is the cornerstone of the Direct Action Plan approach proposed by the government. Although draft legislation has been released whether or not it is enacted is likely to be problematic given the stance of the PUP on the Direct Action Plan. This aside the ERF or other alternative proposals may present opportunities for funding of carbon abatement projects. Evaluating potential carbon abatement projects now will put you ahead of the game and assist you to understand the affects of ERF revisions or alternative plans on your projects for better or worse.

We can help

When you’re in business, keeping up to date on every little nuance is not easy, and that’s where we can help…

Keeping track of changing requirements, including updates to calculation methods, can be challenging. At Katestone it’s our job to keep up to date on developments relating to the NGER scheme, and Australia’s carbon policy and associated legislation. We are well-equipped to assist you with all aspects of greenhouse gas assessment and reporting, including NGER scheme reporting. In addition to this we can work with you to develop a clever and practical carbon management strategy.
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