The Morrison Government stands ready to support Australian businesses and communities invested in practical emissions reduction projects through the COVID-19 recovery.
At the request of the Minister for Energy and Emissions Reduction the Hon Angus Taylor MP, the Clean Energy Regulator (CER) has assessed how the carbon offsets market is faring during the COVID-19 pandemic.
The CER found that Australia’s carbon market has not suffered the price falls seen internationally, dispelling initial concerns that COVID-19 would put significant downward pressure on demand and prices.
Minister Taylor said it is pleasing to see Australia’s carbon market has so far proven to be resilient in the face of economic pressure caused by the global pandemic.
“I have asked the Clean Energy Regulator to continue to monitor developments in the carbon market closely and take action to support the carbon market further if the need arises,” Minister Taylor said.
“As a result, the Regulator stands ready to purchase Australian Carbon Credit Units at the last auction price ($16.14 per tonne) if the market were to fall substantially.
“It is important the Government continues to provide support to Australian businesses to reduce emissions – supporting jobs, many in regional areas, and cash flow during challenging economic times.”
This announcement is a welcome boost to confidence in the market. It is expected to help maintain ACCU prices and demand before the next Emissions Reduction Fund (ERF) auction takes place in September.
While the Government has a key role in purchasing abatement through the ERF, many projects run by businesses and communities have contracts with third-parties.
The Government will also continue to work with participants and industry to explore new and innovative ways to reduce emissions, secure abatement and support jobs through the Government’s $2 billion Climate Solutions Fund.
The Government will seek to maximise co-investment from the private sector and other levels of government alongside the Climate Solutions Fund through state energy deals and other measures.
This year, Australia is forecast to exceed its 2020 emissions reduction target by some 411 million tonnes (or around 80 per cent of a full year’s emissions). The Government has also mapped out how Australia will meet its 2030 Paris target through the $3.5 billion Climate Solutions Package.
“Incentivising voluntary emissions reduction on a broader scale will position Australia to overachieve on our 2030 Paris target in a decade’s time – all while maintaining a strong economy,” Minister Taylor said.