The centrepiece of the Abbott government’s Direct Action climate policy – the proposed Emissions Reduction Fund – will be undersupplied when it commences in July, according to a report from market analysts RepuTex, and will fail to meet the federal government’s 2020 emissions reduction target. The report – the first of its kind since the release of the government’s ERF draft legislation and the Federal Budget – forecasts that by 2020, the ERF will purchase between 30 and 120 million Australian Carbon Credit Units (ACCUs), leaving a shortfall of over 300 million tonnes to meet Australia’s 5 per cent emissions reduction target – equivalent to over 70 per cent of the government’s total abatement challenge.
The Australian market requires an average of 70 million tonnes of abatement each year from 2015 to 2020 in order to meet its cumulative abatement challenge of 421 million tonnes, equivalent to a 5 per cent reduction in emissions from 2000 levels. But according to RepuTex forecasts, the ERF – even if buoyed by a very high benchmark price – would purchase less than 120 million tonnes of greenhouse gas emissions abatement by 2020, equivalent to only 28 per cent of Australia’s abatement challenge. “This leaves a considerable shortfall for the government to overcome in the final design of its scheme,” said RepuTex executive director, Hugh Grossman.
RepuTex – which predicts two thirds of all credits purchased by the ERF will come from high emitting companies, and the balance from existing proponents operating under the Carbon Farming Initiative – says industry participation in the scheme will be dependent on the price of abatement purchased by the government, the benchmark for which will be set by the Clean Energy Regulator prior to the first auction, and will be keenly observed by the market. The final design of the Coalition’s climate policy is expected to be completed by March 2015 when the government releases the details of its proposed safeguard mechanism, which will introduce baselines and flexible penalties for facilities, to commence July 1, 2015.
In other news…
A new CSIRO-developed technology that uses minerals sometimes found in stomach antacid treatments to trap contaminants in mining wastewater and reduce sludge by up to 90 per cent has been used for the first time at a commercial mine. The technology, called Virtual Curtain, was used at a Queensland mine, removing metal contaminants from wastewater to produce around 20 Olympic swimming pools of rainwater-quality water. “Our treatment produced only a fraction of the sludge that a conventional lime-based method would have and allowed the mine water to be treated in a more environmentally sound way,” CSIRO scientist Dr Grant Douglas said. “If required, the treated water can be purified much more efficiently via reverse osmosis and either released to the environment or recycled back into the plant, so it has huge benefits for mining operators in arid regions such as Australia and Chile.”
Ocean Power Technologies – the US company behind an ARENA-funded ocean power project off Victoria – has become the subject of controversy, after sacking its CEO (without pay) and launching an internal investigation into its funding agreement with ARENA, concerning the project, offshore from Portland in the state’s far southwest. News Limited reports that a company statement said a special committee would retain outside counsel to assist in the investigation, without offering more information on what the concerns were. The Portland project is majority owned by OPT with US defence contractor Lockheed Martin Corp a partner. ARENA has confirmed its funding agreement with Victorian Wave Partners (a wholly owned OPT subsidiary) to build a large-scale grid-connected wave power station using their PowerBuoy technology.
Chinese solar PV giant Yingli Green Energy has announced plans to become the world’s first carbon neutral sponsor of the FIFA World Cup. The company says it will do this by offsetting all carbon emissions arising from its promotional and on-site activities in Brazil, including supplying 5,000-plus solar panels and nearly 30 off-grid solar energy systems to help power matches at multiple World Cup stadiums. Yingli will also coordinate the accurate calculation and verification of emissions data for the duration of its sponsorship.