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A new approach to contracting under Emissions Reduction Fund auctions - an option to deliver

20 December 2019

As Australia’s demand for carbon abatement continues to grow as more corporations and other levels of government enter the carbon market, we are considering the use of a new innovative approach to contracting under Emissions Reduction Fund (ERF) auctions.

We have released a consultation paper and are seeking your views on the design elements of an “option to deliver” contract for potential inclusion in the tenth ERF auction.

Contracts offering an option to deliver give sellers the security of a contracted price for Australian carbon credit units (ACCUs) in order to invest in a new carbon abatement project. The seller can then choose whether to deliver abatement to the Commonwealth at the contracted price, or sell some or all of their ACCUs elsewhere.

Register your ERF project for auction ten

If you are interested in participating in the tenth Emissions Reduction Fund (ERF) auction on 25 and 26 March 2020, you must register your project and submit a project application by midnight, Monday 10 February 2020 (AEDT).

The benefits of participating in the ERF

Have you considered participating in the ERF and securing an ongoing income stream from carbon abatement?

More than 400 people across Australia, just like yourself, have already adopted new practices and technologies to reduce or store emissions and are earning Australian carbon credit units as a result. These units can be sold to the Government or to other buyers in the private sector.

Using a part of your property to conduct sustainable land management practices, or combining new activities to your business practices can diversify your business and income stream. Carbon abatement projects can also provide you with other benefits such as demonstrating your environmental credentials to customers and improving the efficiency and productivity of your operations.

Entering into a contract with the Commonwealth at the tenth ERF auction can provide long term funding at a contracted price for projects that meet our criteria.

The Clean Energy Regulator has already contracted over $2.3 billion worth of abatement, and to date has paid over $600 million to people who have carried out projects, reducing Australia’s carbon emissions by almost 50 million tonnes.

Significant additional funding from the new $2 billion Climate Solutions Fund (CSF) is available for forward contracting at this auction. And as well as securing a contract with the Commonwealth, you could also seek other buyers for your carbon credits, in the expanding private market.

The Clean Energy Regulator is also continuing to work with industry and people like yourself to find new ways to reduce the costs of participating in the ERF, while making participation easier and maintaining scheme integrity. Together with the additional funding from the CSF, these ongoing improvements mean that there are more opportunities to secure long-time contracts with the Commonwealth and take advantage of the carbon economy.

More information

Whether you are a landholder or a large firm, and you are a thinking about participating in the ERF, call or email us directly with any questions and make sure you don’t miss out. You can contact us at enquiries@cleanenergyregulator.gov.au or phone 1300 553 542.

See the consultation paper, planning a project, the tenth auction guidelines and participating in an auction for more information.


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