Carbon Price 2011: new proposed opt-in scheme

14 Sep 2011Archived News Climate Change Matters

In a change to the 'Securing a Clean Energy Future' policy announcement delivered in July, the regulations may enable a company to opt-in to the carbon scheme after 2013. This provision is an alternative to receiving a reduction in fuel tax or excise.


By managing your carbon liability you have a greater control over your corporate risk profile. Energetics anticipates the opt-in scheme to be a complex issue for many businesses; however investigation may identify several business advantages through potential cost reduction, procurement of carbon offsets and cash flow benefit.

An opportunity for business

The "opt-in" provision enables businesses to voluntarily take on their diesel emissions' responsibility, although some of the details are yet to be finalised. This new provision may create some interesting opportunities for companies who use large amounts of diesel, such as mining and transport companies, which can choose to "opt-in" to the carbon scheme. These companies can manage their carbon liability and retain the current excise treatment for diesel.

By managing your carbon exposure directly your business may benefit by:

  • managing and minimising the carbon cost impact
  • reducing the carbon cost through credits and offsets such as the 5% CFI allowance in the early years, and the use of overseas credits once trading starts
  • creating substantial cash flow and timing benefits if the timeframes for excise payments and carbon credit acquittal are different
  • creating a platform for awareness, internal capability and carbon trading readiness across the corporation

For companies who spend substantial money on diesel, this may be an opportunity worth further investigating as the regulations and supporting details are released.

The following conditions are listed

  • The scheme relates to a corporation who "acquires, manufactures or imports an amount of taxable fuel". The amount and kind of fuel is to be specified.
  • The corporation must be currently eligible for a tax credit for that fuel.
  • An application will need to be made to become a designated opt-in corporation.
  • They must pass an opt-in eligibility test and any other conditions set by the scheme.
  • The potential greenhouse gas emissions embodied in the opt-in amount must be a certain number of tonnes, which is yet to be specified. This number is the 'preliminary emissions number'.
  • If the designated opt-in corporation has one or more preliminary emissions numbers then the sum of these is the 'provisional emissions number' and that corporation is a 'liable entity' under the scheme.

To understand this complex issue and how it relates to your business, please contact your Energetics account manager or one of our Energetics' Principal Consultants.

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