Businesses encouraged to participate in ERF auctions

Accounting firm RSM Bird Cameron is encouraging businesses to consider participating in the Australian Government’s first Emissions Reduction Fund (ERF) auction, set to take place in March this year. The aim of the ERF is to provide incentives for emissions reduction activities across the Australian economy.

RSM Bird Cameron Principal Tim Pittaway says that although the auctions are voluntary, they will provide opportunities for those businesses who choose to participate. He noted, “For new projects that are going through business case development and capital raising, companies should consider if participation in the ERF could fund part of the project.

“To take advantage of this, businesses need to identify projects within the organisation that could qualify now,” Pittaway continued. “Part of this is deciding how they plan to bid in the auction and the price they will go in at.

“Businesses that get in early on the right types of projects may find that their bid price is accepted because nobody knows what the price will be. This could be particularly beneficial for the first auction, which is unknown territory.”

Pittaway added that businesses planning to participate “need to get moving now and ensure they have a good risk management strategy in place”.

“It is critical that businesses can deliver the project as required if they participate in the ERF, as that is what they will be signing up to,” he explained. “If they don’t deliver as per the contract, they could find themselves having to purchase carbon units through another market to address any shortfall.”

For more information on the ERF, visit http://www.environment.gov.au/climate-change/emissions-reduction-fund.