The carbon pricing mechanism has a fixed price for the first two years of its operation i.e. 2012-13 and 2013-14.
Carbon pricing mechanism repeal
The Clean Energy Act 2011 has been repealed. This abolishes the carbon pricing mechanism from 1 July 2014. Liable entities must still meet their carbon price obligations for the 2013-14 financial year.
Content on the Clean Energy Regulator website will be progressively updated to reflect these changes. More information can be found on the carbon pricing mechanism repeal page.
During this fixed price period, the Government sells an unlimited number of Australian carbon units at the specified fixed price for the relevant year. Liable entities automatically surrender these carbon units as they are purchased—they cannot be traded or banked for use in future years.
The fixed price is:
- $23 a tonne in 2012–13, and
- $24.15 a tonne in 2013–14.
During the fixed price period, liable entities are generally required to discharge 75 per cent of their estimated liability by 15 June of a fixed charge year. This may be done by surrendering the required units or by paying a unit shortfall charge.
Liable entities must then surrender units for the remainder of their liability by 1 February in the following year (2 February in 2015) or pay a unit shortfall charge to cover the remaining liability.
As a form of assistance, some industries were provided with free carbon units in relation to the 2012-13 and 2013-14 financial years. This assistance was discontinued from 1 July 2014.
Freely allocated carbon units can be traded privately or sold back to the Government until 1 February after the financial year (vintage year) for which they were allocated.
Freely allocated carbon units cannot be banked.
Other eligible units
Liable entities can also surrender an eligible Australian carbon credit unit to meet their carbon pollution liability.