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Fourth auction and future purchasing for the Emissions Reduction Fund

16 August 2016

A fourth Emissions Reduction Fund auction will be held in November. The Clean Energy Regulator will also explore an alternative process to purchase low cost abatement in the future.

The Clean Energy Regulator will hold the fourth Emissions Reduction Fund auction on Wednesday 16 November and Thursday 17 November 2016. The auction format will remain largely unchanged from previous auctions. The auction guidelines published today give the Clean Energy Regulator some additional flexibility to choose the volume of offered abatement it will accept.

The Clean Energy Regulator 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 Clean Energy Regulator 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,” Chair of the Clean Energy Regulator 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 Clean Energy Regulator will publish the results of the market sounding after the fourth auction has concluded.

The fourth auction guidelines and other relevant information can be found on the Clean Energy Regulator website.

The market sounding process is now open and will close on 14 October 2016.


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