The Federal Government's new carbon tax places a significant impost on companies in emissions-intensive industries.
Under the carbon tax, due to commence on 1 July this year, affected companies will be required to pay $23 per tonne for their direct carbon emissions in 2012-13.The cost rises in 2013-14, to $24.12, and increases to $25.40 in 2014-15.
After 2015, the price companies pay to emit one tonne of carbon will vary according to a market price set between limits of $15 per tonne (the 'floor') and $20 above the 2015 market price (the "ceiling" or "price cap").
The carbon tax legislation allows for carbon offsets whereby the capture and storage of carbon from the atmosphere or some emissions reduction activities can generate carbon credits to "offset" companies' tax obligations, and thus reduce the cost of compliance.
Companies that are affected by the carbon tax need to look at sourcing eligible carbon credits from the market; developing carbon trading solutions; and establishing low-cost, long-term carbon offset programs."
CO2 Australia recommends that companies undertake a thorough impact assessment. This would provide the company with a model showing the effects of carbon price rises on the business, and how to minimise this liability.
"We provide a detailed analysis of the options you can use to reduce the cost of carbon tax compliance and an assessment of the competitive advantages that careful management of your emissions will provide," says Andrew Grant, CEO, CO2 Group.
CO2 Australia's Carbon Sequestration ProgramTM is unique to the Australian market and involves establishing long-term plantings of native trees for the purpose of generating carbon credits on a commercial scale.
Unlike international schemes, CO2 Australia's forest carbon sinks are based in Australia, so that they meet the strict integrity standards of the Federal Government's Carbon Farming Initiative (CFI).
These Australian forest carbon sinks are created in partnership with landholders and rural groups using marginal farming land.Forest carbon sinks offer a low cost, scalable, proven solution that's ready for implementation now.
Investing in a forest carbon sink reduces an organisation's emissions profile, thus their exposure to a carbon price.This allows companies operating in emissions intensive industries to use carbon credits in lieu of paying a cash price for the government's carbon permits (a limited resource that will be further restricted in future years).Companies will have access to fully auditable credits under the CFI to build a carbon bank for the future through proven technology.
Forest carbon sinks diversify regional economies while enabling agriculture to continue in unison with the plantings.
In rural areas the planting of carbon forests can help to address soil erosion, salinity and other land degradation issues.
The international carbon market was worth $7 trillion in 2010.
For more information on the carbon tax, contact Paul Thomas on paul.thomas@co2australia.com.au or phone 03 9928 5111.
