Fourth Emissions Reduction Fund auction announced

Fourth Emissions Reduction Fund auction announced

The Clean Energy Regulator has announced the next Emissions Reduction Fund auction will be held in November, while it has also launched a consultation on different ways to buy carbon abatement.

The next auction for carbon abatement contracts will take place on Wednesday 16 and Thursday 17 November.  Project registration must be completed by midnight (AEDT) on Tuesday 4 October.

The November auction will follow the same format as before, in a single-round, pay-as-bid approach. However, the Clean Energy Regulator (CER) has released auction guidelines giving it more flexibility to choose how much abatement it will accept.

The CER has also released a market sounding paper to gauge the potential to purchase carbon abatement from certain types of projects other than through an auction.

The Carbon Credits (Carbon Farming Initiative) Rule 2015 provides the CER with the ability to purchase carbon abatement through an auction or other purchasing process.

“The competitive auction process has served us well to date. However, it is possible that we have not yet tapped into all segments of the market that are capable of delivering large volumes of well-priced abatement,” CER Chair Chloe Munro said.

“With more than $800 million remaining to be allocated, now is the time to consider whether to vary our purchasing approach in the future. With the price information available to us from four auctions, we will be in a strong position to assess whether an abatement offer made outside an auction represents value for money.”

“We are particularly interested in assessing whether large industrial projects are inhibited from participation in the Emissions Reduction Fund by the auction process itself.”

The fourth auction guidelines and other relevant information can be found on the CER website.

The market sounding process is now open and will close on 14 October. Details of how to participate are also on the CER website. The CER will publish the results of the market sounding after the fourth auction.