Are you ready for the second ERF auction?

The second Emissions Reduction Fund (ERF) auction has been announced for 4–5 November 2015. This means that industry and local government have another opportunity to register their new projects under the ERF and to obtain funding for their abatement efforts.

Under the scheme, the federal government (through the Clean Energy Regulator) will purchase lowest cost abatement in the form of Australian Carbon Credit Units (ACCUs) from project proponents using a reverse auction process. Successful bidders enter into a carbon abatement contract with the government for the delivery of abatement over the following seven years, guaranteeing a steady income stream over that time period.

In the first auction, 43 participants secured 107 contracts worth $660 million at an average price of $13.95/ACCU. This means that there is still $1.89 billion in ERF funding available.

For a project to be eligible under the ERF, it must be:

• new — the project must not have ‘begun’ before it has been registered with the CER (activities which do not breach this requirement include conducting feasibility studies, obtaining regulatory approvals and consent and conducting negotiations);
• beyond regulatory requirements (EPA requirements, planning, etc); and
• unlikely to proceed thanks to other designated government programs.

The Department of the Environment continues to release more and more methods through which project proponents can earn carbon credits. A wide range of industries and project types can now participate, including:

• Landfill gas capture (new and upgrades)
• Alternative waste treatment (mixed waste)
• Source-separated organics diversion (soon to be released)
• Biofilters (soon to be released)
• Land (and sea) transport
• Soil carbon (modelled or measured)
• Commercial and public lighting
• Industrial electricity and fuel efficiency
• Wastewater treatment
• Aggregated small energy users
• Commercial buildings
• Reforestation and afforestation
• Avoided deforestation
• Various agricultural methods (piggeries, dairy, cattle and irrigated cotton)

Environmental consultancy firm MRA Consulting has recommended that if you are planning to carry out any of the projects listed above within the next five years, you should seek professional advice and register your project with the Clean Energy Regulator in order to avoid the risk of breaching the newness requirement and participate in the next ERF auction. Participants in the second auction must have their projects registered by 18 September.

For further information on the types of projects that can receive funding and the participation process, contact Jordon Wong (jordon@mraconsulting.com.au) or Julien Gastaldi (julien@mraconsulting.com.au).