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Industry pressure delays ERF auction

The Clean Energy Regulator has announced the first Emissions Reduction Fund auction will take place on 15 April, a month later than previously expected.

According to energy research firm RepuTex, industry pressure has forced the government to delay the start of the auction to allow more time to prepare bids for reduction methods yet to be finalised.

“The delay allows more time for new draft emissions reduction methods for industry to be formally regulated and be eligible for use in the first auction, including a method to cover industrial fuel and energy efficiency,” a RepuTex statement said.

Only three emissions reduction methods have been formally declared by environment minister Greg Hunt, including for commercial buildings, alternative waste treatment and landfill gas. Fourteen more draft methods are yet to be formally declared.

These are:

  • Aggregated small energy users
  • Avoided clearing of native regrowth
  • Avoided land clearing
  • Beef cattle herd management
  • Coal mining
  • Designated Verified Carbon Standard projects
  • Facilities
  • Fertiliser use efficiency in irrigated cotton
  • Industrial Fuel and Energy Efficiency
  • Reforestation
  • Savanna fire management
  • Sequestration of carbon in soil using modelled abatement estimates
  • Transport
  • Wastewater treatment

“The initial March auction timeline was believed to be too soon for these methods to be made available for industry proponents seeking to participate in the first auction,” RepuTex said. “Industry indicated to the Clean Energy Regulator that it needs more time to prepare its bids for the first auction following the release of the new finalised methods, with a number of firms likely to commence price discovery in the early auction rounds.”

RepuTex said the property sector had criticised the commercial building method due to the high barriers likely to be faced to develop projects under the ERF

“Under the commercial buildings method, minimum bid thresholds and the required NABERS star rating improvements are likely to create barriers for small property owners, suggesting that the market may be more favourable for aggregators and firms with larger portfolios such as property trusts,” it said.

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