The second Emissions Reduction Fund auction is just around the corner. Who will be the big winners this time around?
A total of $1.89 billion in funds remains in the ERF to be spent over the crediting period to 2020.
Competition in the second ERF auction is potentially greater with 330 projects registered under the ERF eligible to bid in the second auction compared to 260 during the first. The figure below shows that 270 out of the 330 eligible projects are land based projects including sequestration, regeneration, reforestation/ afforestation and savanna burning projects.
A small number of potentially large projects have also been registered under transport and energy efficiency methods. Qantas Airways Limited’s ERF Emissions Reduction Project under the Aviation Method involves reducing emissions across its fleet and operations in Australia. Woolworths Limited’s “Project Enlighten” involves making energy and fuel efficiency improvements across its stores in Australia and BHP Billiton’s subsidiary, Endeavour Coal has registered a coal mine waste gas project.
Carbon analytics firm, RepuTex, estimates that approximately $1 billion will be contracted at the second auction. Other analytics firms anticipate that auction prices will range between $10 and $15 per tonne of abatement. Based on these numbers, between 67 million and 100 million t CO2e abatement may be purchased at the next auction.
At this rate, ERF funding may be fully allocated within the next few auctions. With no additional funding promised by the government for the period to 2020, opportunities to win a slice of the funds in the near future are quickly drying up.
However, there opportunities still exist in the long term with the announcement of an estimated $200 million per year in additional funding between 2020 and 2030 to help meet Australia’s emissions reduction target of 26-28% below 2005 levels by 2030.
For the waste sector, there are plenty of Methods to participate under including:
- Landfill gas capture;
- AWT projects; and
- Source separated organics diversion (nearing completion)
MRA strongly recommends that if you are planning to carry out any of the projects listed above within the next 5 years that you seek professional advice and register your project with the CER now – before you start – to avoid the risk of breaching the newness requirement and participate in the next ERF auction.
For further information on the types of projects that can receive funding and the participation process, please contact Jordon Wong (firstname.lastname@example.org) or Julien Gastaldi (email@example.com).