Option to Deliver contract will be offered on a pilot basis for the tenth Emissions Reduction Fund auction on 25 and 26 March 2020. This option gives sellers the right, but not the obligation, to sell Australian carbon credit units to the Australian Government at a set price within a set timeframe.
Documentasset: New auction guidelines are now available for those interested in bidding for an Option to Deliver contract at auction. A new auction qualification form and an associated Code of Common Terms for this contract option will be made available shortly.
Documentasset: Code of Common Terms – version 3 and
Documentasset: auction guidelines remain in force for fixed delivery contracts.
For more information, see
participating in an auction.
The market sounding paper for direct abatement offers was open from 16 August 2016 to 14 October 2016. During that time, the paper was downloaded in excess of 500 times. The Clean Energy Regulator received six submissions. The submissions were mostly of a general nature commenting on the purchasing process. Those submissions which identified potential projects either did not meet the proposed criteria or there is no current method available to accommodate the project.
Submissions suggested that:
After assessing the submissions, the Clean Energy Regulator concludes:
The Clean Energy Regulator remains open to suggestions for innovative options for purchasing low cost abatement, but the auction process will remain the preferred purchasing mechanism for the time being.
The Clean Energy Regulator invites written submissions from interested parties on the proposal to open an alternative purchasing process of a 'direct abatement offer' under the Emissions Reduction Fund.
The three Emissions Reduction Fund auctions to date have been highly successful, contracting 143 million tonnes of abatement. 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. The Emissions Reduction Fund White Paper (page 48) stated that:
Consistent with the White Paper, we would like to hear from stakeholders with possible large abatement projects at a single site that may be more suited to being brought forward through a direct abatement offer.
A direct offer process is not intended to provide an alternative pathway for proponents of projects that are unsuccessful at an auction, nor will it change the settings of the next auction in November 2019.
Responses to consultation will aid the Clean Energy Regulator in its future purchasing of carbon abatement. In designing its carbon abatement purchasing processes, the Clean Energy Regulator must have regard to the purchasing principles in the
Carbon Credits (Carbon Farming Initiative) Act 2011.
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