Preparing for the next Emissions Reduction Fund auction

Accounting firm RSM Bird Cameron has stated that businesses and industries looking to participate in the next Emissions Reduction Fund (ERF) auction must act now.

RSM Bird Cameron Principal Tim Pittaway said just over half of projects succeeded in the first auction, with the winners “largely from land-based projects such as farming, waste management and forestry”. But new methodologies are currently under review and likely to be approved before the next auction, opening up opportunities for more businesses and industries to participate.

“This includes energy-efficiency and transport methodologies, which will mean opportunities for manufacturers and other supply chain companies,” said Pittaway.

“This will have a twofold effect. It will mean those in land-based activities will need to have a stronger business case when bidding in the next auction to be successful. It also means other industries looking to get involved need to start preparing now to compete against those that have participated in the first round, learning from the experience.”

RSM Bird Cameron expects this extra activity in the space may drive down the carbon abatement price slightly from the average of $13.95 in the first auction.

Any business wanting to bid needs to register the project with the Clean Energy Regulator (CER) ahead of the auction deadline and be prepared to comply with the reasonable assurance audit requirements involved in being awarded a contract as bids in the auction are legally binding. Businesses will need to factor in these costs when budgeting for the project.

“It is important for businesses to seek out a registered greenhouse and energy auditor and talk to the CER as they dictate the audit requirements,” Pittaway said.

“RSM Bird Cameron suggests engaging an auditor early in the process and understand the methods and records which need to be kept for each method and ensuring those undertaking the project can produce the required records. This will help businesses demonstrate compliance with the chosen method and provide documentation on the project and how abatement will be achieved.”