Establishing a system for auctioning carbon units

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The Clean Energy Act 2011 has been repealed.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.

We are establishing a system for auctioning carbon units as part of preparing for Australia's carbon pricing mechanism to move to a flexible price from 2015–16.

Why do we need an auction system?

Australia's carbon pricing mechanism is an emissions trading scheme. It requires Australia's largest polluters to report on their emissions and pay a price for every tonne of carbon pollution they emit.

The carbon pricing mechanism is at a fixed price for the first three years from 1 July 2012. Then on 1 July 2015, it changes to a flexible price set by the market.

During this flexible price period, the Australian Government will issue carbon units—each unit representing one tonne of pollution.

Some units will be allocated to eligible businesses to support jobs and competitiveness and help affected industries move to a clean energy future. The Government will sell the rest of the units at auction.

The Clean Energy Regulator will conduct these auctions, which are likely to start in the first half of 2014. We will do this through an electronic auction system.

Deloitte Touche Tohmatsu to provide Auction Solution

Deloitte Touche Tohmatsu has been selected to provide an Auction Solution to support auctioning of carbon units in accordance with the Clean Energy Act 2011. Deloitte’s solution will incorporate software from Victorian technology developer Tradeslot.

On 1 July 2015 the carbon pricing mechanism will move to a flexible, market-driven approach. As part of this approach the Government will issue a fixed number of carbon units each year. Some of these carbon units will be sold at auction. The first auction of carbon units will take place in the first half of 2014 and will be conducted by the Clean Energy Regulator.

Deloitte will provide an auction solution to support this critical component of the flexible price period.

Deloitte was selected following an open Request for Tender (RFT) process in 2012. Their response indicated a high level of compliance with the RFT Statement of Requirements and presented the greatest value for money. The RFT process was undertaken in accordance with the Commonwealth Procurement Rules.

Further information

Auction and settlement policy is detailed in the Ministerial Determination, Clean Energy (Auction of Carbon Units) Determination 2013 on the ComLaw website.

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