* Firms with large fuel bills allowed to opt in to CO2
* Scheme could help them manage carbon costs, govt says
* Airlines, miners, rail firms among those set to opt in
By David Fogarty
SINGAPORE, Sept 14 Big fuel users such as
airlines, miners and rail transport firms may opt-in to
Australia's carbon pricing scheme to help manage their carbon
costs, the government said on Wednesday.
The rule change, included in a suite of carbon pricing laws
introduced into the lower house of parliament on Tuesday, was
made at the request of major companies such as Qantas
to improve risk management.
Under the national carbon pricing scheme, about 500 top
polluters responsible for 60 percent of the country's greenhouse
gas emissions will have to pay A$23 ($23.5) for each tonne of
carbon emissions from July 1 next year.
Emissions trading and more flexible pricing follows three
years later, assuming parliament passes the package before the
end of this year.
Large companies, such as miners with large diesel bills for
transport, will have to pay an effective carbon price through
fuel excise and fuel tax credit schemes. Opting in allow firms
to manage these carbon costs themselves, such as buying domestic
"This will enable large users of specified fuels to
voluntarily opt into the carbon price mechanism instead of
paying the equivalent carbon price under the fuel tax or excise
systems," a spokesman for Climate Change Minister Greg Combet
The opt-in arrangements apply from July 1, 2013.
"There are around 20 or so additional companies, on top of
companies already expected to be covered by the carbon price
mechanism, for whom opt-in could make commercial sense. It is up
to those companies to make their own decisions about whether
they opt into the carbon price mechanism," said the spokesman.
Qantas welcomed the change, which was made after a recent
public consultation period for the carbon legislation.
"Qantas' strong preference has always been for the ability
to manage our carbon liability directly, and we are pleased that
the legislation includes an 'opt in' provision," a company
spokesman told Reuters in an email.
"Our estimated domestic emissions footprint in the first
year of the scheme, 2012-13, is around 5 million tonnes," he
Some businesses were attracted to this approach for
marketing reasons, said Combet's spokesman, or because they
already have teams that manage carbon costs in other countries.
"The opt-in approach may allow these companies to enter into
long term relationships with creators of carbon credits that may
allow them to pay a lower carbon price," he added, such as
carbon credits from long-term tree plantations.
That could benefit carbon offset firms such as Carbon
Conscious and CO2 Group, , the country's main
developer of tree plantations for carbon offsets.
Others wanted to be able to take advantage of carbon pricing
hedging instruments that are expected to be offered by banks and
exchanges once the scheme starts.
"It makes sense for large players," said Tim Jordan, carbon
analyst for Deutsche Bank in Sydney.
"Just as they manage their foreign currency risk, or a whole
range of input costs through financial instruments, they would
like to manage their carbon liability that way too," he told
(Editing by Himani Sarkar)