Clean Energy Regulator chair David Parker reflects on how the government body is delivering on climate targets.
The Australian Government has set a 43 per cent emissions reduction target by 2030 and aims to reach net zero by 2050. The work of the Clean Energy Regulator supports these targets by helping to transform Australia to a low-emissions economy.
I want to provide an overview of some of the new initiatives the Clean Energy Regulator is undertaking to help meet these climate targets by accelerating the uptake of renewables, delivering high-integrity carbon abatement and growing Australia’s carbon markets.
These initiatives include the development of a Guarantee of Origin scheme, the Australian Carbon Exchange and strengthening the Safeguard Mechanism, along with a range of technology improvements to the administration of our schemes.
I will also provide an update on the Corporate Emissions Reduction Transparency (CERT) report I outlined in my column in the previous issue of EcoGeneration.
Guarantee of Origin
We are developing a Guarantee of Origin scheme that will enable Australian businesses to certify low-emissions hydrogen and other low-emissions products domestically and around the world.
The Guarantee of Origin scheme is part of achieving the vision for a clean, innovative, safe and competitive hydrogen industry. It will also help Australia become a major global player.
The scheme will measure and display key attributes of how and where a unit of hydrogen is produced, including its carbon intensity. This will provide verified information to the market to support the commercialisation of low-emission hydrogen and renewable electricity.
In 2022, we have been undertaking trials with hydrogen production projects in collaboration with the Department of Climate Change, Energy, the Environment and Water to support the co-design of the scheme.
Australian Carbon Exchange
The Clean Energy Regulator has been undertaking procurement to introduce an online trading platform for carbon units. The Australian Carbon Exchange will operate in a similar way to online stock exchanges, but in the purchase, clearing and settlement of Australian carbon credit units (ACCUs) as well as other carbon units and certificates.
The exchange will support Australian industry by increasing market transparency, including pricing, lowering transaction costs and reducing red tape. It will also accelerate emissions reduction and provide a boost to Australia’s economy.
The Australian Carbon Exchange will make the trading of ACCUs simpler, supporting rapidly increasing demand from the corporate sector, while fostering the growth in Australia’s vibrant carbon markets. ACCUs credited from approved Emissions Reduction Fund (ERF) projects can be traded among individuals and businesses.
The exchange will be developed during a three-year timeline; and we anticipate it will be launched in late 2023.
Strengthening the Safeguard Mechanism
The Safeguard Mechanism requires Australia’s largest greenhouse gas emitters to keep their net emissions below an emissions limit. The Department of Climate Change, Energy, the Environment and Water has been consulting on reforms to the Safeguard Mechanism to help industry reduce emissions in line with Australia’s climate targets.
The Safeguard Mechanism applies to around 215 large emitting facilities that together contributed 28 per cent of national emissions in 2020-2021. The reforms to strengthen the Safeguard Mechanism propose gradually reducing facility emissions limits and introducing credits for facilities that emit less than their limit.
This provides tailored treatment to emissions-intensive, trade-exposed facilities so businesses are not disadvantaged, compared to international competitors, and emissions do not increase overseas.
The Clean Energy Regulator will administer a strengthened Safeguard Mechanism once the reforms are finalised, expected to be from 1 July, 2023.
CERT report update
My previous EcoGeneration column detailed the Corporate Emissions Reduction Transparency (CERT) report, which ran as a pilot in 2022. It is great seeing corporate Australia doing its part to reduce emissions, with 23 companies taking part.
Companies are now able to opt-in for the 2023 CERT report. The Clean Energy Regulator encourages those reporting more than 50 kilotonnes of carbon dioxide equivalent (CO2-e) emissions per year under the National Greenhouse and Energy Reporting (NGER) scheme to consider opting-in.
Through the pilot and consultation with industry, we have further developed CERT for 2023, introducing independently assured commitments. This enables companies to highlight which commitments, data and achievements have been independently audited. It is also easier to participate in CERT following updates to the guidelines and our systems.
We have updated CERT’s design to recognise the jurisdictional surrenders of large-scale generation certificates (LGCs) and updates to the residual mix factor for calculating the emissions intensity of imported electricity.
Making it easier to do business with us
We are undertaking a number of technological improvements that will enhance the way our participants engage with and receive benefits from our schemes. The improvements will streamline access to data and reports, while making compliance easier.
I look forward to keeping you updated on these initiatives in future EcoGeneration columns in 2023. In the meantime, if you want to know more about these initiatives or the work of the Clean Energy Regulator, visit cleanenergyregulator.gov.au for more information.