Australia is preparing to update its emissions reduction target and usher in mandatory climate reporting for top companies.
The Clean Energy Regulator on Monday released the latest Corporate Emissions Reduction Transparency Report, known as the CERT report, which is a voluntary scheme.
The regulator’s chair and CEO David Parker called for more companies to join the reporting framework.
“With the Treasury consulting on mandatory climate-related financial disclosures for large companies, now is the time for companies to participate in the CERT report and improve their emissions-reporting capability,” he said.
Big polluters are using carbon credits to buy them time to develop cleaner industrial technology and commercially viable alternative fuels.
The 2023 CERT report on 25 large Australian companies shows 20 have committed to net zero emissions by 2050, including six companies that are already carbon neutral.
Thirteen others have commitments to reach 100 per cent renewable electricity use by 2030.
National declared levels for 2035, as a milestone to net-zero carbon emissions by mid-century, are required from countries under the Paris Agreement to limit global warming to well below 2C.
The Carbon Market Institute (CMI) has told the Climate Change Authority that Australia’s emissions must be reduced more than 70 per cent by 2035, compared to 2005 levels.
A jet fuel emissions trading scheme for all domestic airlines and a special scheme for heavy vehicles are among CMI’s recommendations to achieve the target.
The institute said in its submission that special trading schemes for transport could encourage the use of sustainable aviation fuel by domestic carriers and renewable diesel and biofuels uptake for heavy vehicles.
Australia must cut emissions much deeper by 2035 in the “urgent race to net zero and beyond”, CMI acting chief executive Kurt Winter said.
The institute reiterated calls for a broadening of the recently overhauled safeguard mechanism. Instead of covering industrial plants emitting at least 100,000 tonnes in a year, the threshold could be lowered to 25,000 tonnes a year.
The federal government should also buy carbon credits generated by new carbon removal technologies and projects that offer social and environmental wins or partner with Indigenous land managers, the submission said.
Carbon trading is one of the tools Australia and other advanced economies are relying on to get to net zero by mid-century.
“Carbon markets will have an important supporting role to play in these efforts but the primary focus should always be on at-point emissions reduction,” Mr Winter said.
Overhauling the electricity grid is also key to reducing the country’s emissions by 43 per cent this decade, under the existing 2030 pledge.
Energy production is still the largest source of Australia’s carbon emissions, followed by transport, agriculture and industrial processes.
Meanwhile leading carbon market analysts expect further slippage in the price of Australia carbon credit units, which have softened to $26.50 per tonne.
RepuTex said demand is unlikely to soak up the current supply glut in the short term, given the longer lead time for safeguard compliance under the new regime (end of March 2025 for FY24).
Potential changes to purchasing arrangements remain key, with federal government consultation ahead, the research firm said.
(Australian Associated Press)