Australia's CO2 Group CEO quits as new govt policy hits carbon business

Mon Jan 20, 2014 10:22pm EST

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Jan 21 (Reuters) - CO2 Group Ltd, Australia's biggest carbon project developer, said its chief executive has resigned as proposed changes to Australia's climate policy force the company to pursue new growth areas.

Andrew Grant will leave his position after a decade heading up the company, according to the company statement on Tuesday.

"Recent changes in government policy, the proposed abolition of the current carbon pricing regime and continuing uncertainty in the carbon market generally has led the company to reduce the scale of its carbon operations and pursue new growth areas," it said.

CO2 Group's main business has been developing offset projects, mostly within forestry, that develop carbon credits that can be sold to companies wishing to use them to meet government-imposed targets on greenhouse gas emissions.

But the newly elected government in Australia plans to dismantle the nation's emissions trading scheme, replacing it instead with a policy centred around a government-fund that will pay emitters to reduce their pollution.

Developers like CO2 Group will still be able to generate offset credits under the new regime, but demand is negligible because of uncertainty on what the new regulations will look like and when they will come into place.

"We haven't had any investment interest in 18 months," Grant told Reuters in October.

Earlier this month CO2 Group announced the acquisition of prawn aquaculture company Seafarm as part of its strategy to shift away from the carbon market. (Reporting by Stian Reklev in BEIJING; Editing by Muralikumar Anantharaman)

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