After being carried by a slender majority through the House of
Representatives in October, the Government's Clean Energy Bill
and package of 17 complimentary bills passed in the Senate on 8
The carbon tax will commence on 1 July 2012, at which point
Australia's top 500 polluters (those companies that emit more
than 25,000 tonnes of carbon dioxide equivalent per year -
including methane, nitrous oxide, and perflourocarbon from
aluminium production) will be required to purchase carbon units
from the Office of the Clean Energy Regulator at a cost of $23 per
carbon unit per tonne.
Here, partner Michele Muscillo and solicitor Ben Ricketts
outline what businesses need to know about the carbon tax's
What you need to know about the carbon tax
The mining industry, electricity producers (particularly those
using coal) and large industry will be affected by the tax. Of the
500 companies affected, around 110 are based in Queensland.
The carbon tax will stay in its fixed phase for the first three
years. The cost of polluting will rise as follows:
$23 in the first year;
$24.15 in the second year; and
$25.40 in the third and final year of the fixed phase
After three years, the carbon tax in its current form will end,
and Australia will then transition into an Emissions Trading Scheme
(ETS) similar to that first proposed by Kevin Rudd in 2009.
Under the ETS, emitters will be required to purchase carbon
units via auction on the open market. Carbon units will be able to
be generated by green industries, such as wind farms, geothermal
energy, and solar energy producers.
The price of carbon units during the flexible years (ie from 1
July 2015 onwards) will, of course, be dictated by the market.
However, to give a measure of surety to industry, the Government
has mandated a floor price of $15 in the first year, rising to $16
in the second year and $17.05 in the third year (2017).
Various industries will be exempt from the carbon tax. These
include agricultural specific practices such as emissions from
livestock, rice, the burning of savannah grassland of sugarcane and
emissions from soil, as well as fugitive emissions from
decommissioned underground mines and legacy emissions from landfill
facilities for waste accepted before 1 July 2012. For more
information on who will be covered by the tax, please see our
Certain industries will also be available to receive assistance
under the Government's Jobs and Competitiveness Program.
This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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