In April 2014, the Australian Federal government released a
White Paper outlining the design of the Emissions Reduction Fund
("ERF"), which was covered in the Summer 2014 issue of
the Climate Report. The ERF is the cornerstone of the Coalition
government's Direct Action Plan, which replaced Australia's
carbon price legislation (repealed with effect from July 1, 2014).
The government has committed AUD 2.55 billion to the ERF, which the
Clean Energy Regulator (the "Regulator") will use to
purchase emissions reductions in reverse
auctions from registered bidders.
The first of these carbon abatement auctions was held on April
15, 2015, with the Regulator buying approximately 47.3 million tons
of emissions reductions at an average price of AUD 13.95 per ton.
The total value of the contracts awarded was about AUD 660
million. Forty-three contractors made successful bids at the
auction, securing funding for 144 projects running for between
three and 10 years. Most of the projects involved either
carbon sequestration methods, or landfill and alternative waste
treatment methods. Notable initiatives include a project run by Kia
Ora Piggery to capture biogas from pig manure (accounting for
120,000 tons) and a project by Olkola Aboriginal Corporation for
controlled fire management across the savannas of Australia's
fire-prone tropical north (accounting for 455,000 tons).
If the current price of carbon emissions holds, the ERF would
acquire 180 million tons of emissions reductions by 2020.
Australia's current emissions reduction target
("ERT") is 236 million tons by 2020, or 5 percent below
In April 2015, the ambition of Australia's ERT was questioned
in the United Nations by the United States, China, the European
Union, Brazil, Switzerland, and Saudi Arabia. The Federal
government has previously said that it would consider increasing
the 2020 ERT to 15 percent or 20 percent depending on the extent of
international action on
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This legal update is an overview of existing eligible project activities and new project types proposed to be developed.
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