Australia issues 6.37 million CO2 units
Author: Stian Reklev
Australia on Thursday issued 6.37 million free carbon units to companies seeking compensation from the country's CO2 pricing mechanisms, the government said, the first ever emission rights to be issued under Australia's carbon scheme.
The units were issued via Australia's emissions unit registry to alumina refiner Alcoa and ammonia and ammonium nitrate producer Queensland Nitrates, said the Clean Energy Regulator, the government body administering the scheme.
Alcoa got just over 5.9 million of the units.
"These applicants have received around 6.37 million free carbon units which companies can now sell back to the government, transfer, or use to acquit their future liability under the carbon pricing mechanism," the regulator said in a statement.
Australia on July 1 introduced a price of A$23 ($23.92) per metric tonne of CO2 released into the atmosphere by the country's 300 biggest emitters.
But the government has put in place wide-reaching compensation arrangements for industry and households to keep costs of the scheme down.
Alcoa and Queensland Nitrates had applied for carbon units under the Jobs and Competitiveness Program, which provides compensation and assistance to companies covered by the scheme that have limited options to cut emissions because they face international competition from firms that don't have a carbon cost.
The 6.37 million units issued on Thursday represent a value of A$146.5 million that the two firms won't have to pay in carbon costs.
The government estimates some 50 industrial activities, including steel, aluminum, cement and zinc manufacturing will be covered by the program.
Alcoa and Queensland Nitrates will not be allowed to bank the units for use in future years, but can sell unused units on to other emitters in the scheme, or back to the government.
(Reporting by Stian Reklev)
(This story corrects last para to say unused units can be sold to other companies)