The Secondary Carbon Market
Is the Emissions Reduction Fund (ERF) auction the only way to sell carbon in Australia?
Not necessarily, with the development of the ‘secondary market’.
While the ERF suits many Land Owners as it deals in BIG amounts of carbon, and has potential for a Government Guaranteed contract, there is increasingly more than one way to make the Carbon Market work for you!
Outside the ERF Auction, there is NOTHING to stop you undertaking a project, either with a Carbon Agent, or on your own.
You may consider the Secondary Carbon Market for smaller projects, or perhaps you already sell direct to customers, or you’re prepared to go to ‘polluters’ and make a direct deal.
Contact Louisa to learn more about the Secondary Carbon Market.
Secondary Market Fundamentals
To undertake a project and NOT bid into the ERF Auction, the initial steps remain the same:
- Choose a ‘method’
- Register your project
- Implement your project
- Report & audit on project and claim your credits
At this point, you have ‘carbon credits’ (ACCUs) in your account. These are yours to sell, or ‘save’ until the price is right if you wish.
Who will buy your carbon credits?
The ‘Secondary Carbon Market’ is just establishing in Australia. However, with the Paris Agreement having been signed, the Carbon Market in Australia looks set to become bigger and better over the next 25 years.
While the structure of the Policy post the ERF is yet to be announced, this will become clear in 2017. Due to the election and promises made in Paris, the Government is committed to continued reductions in Emissions.
Over the past 10 years, the structure is now settled and it would be unlikely that there would be wholesale change to how projects are implemented. There is bipartisan support for the ‘mechanism’ to deliver projects. That is the politics is around whether or not it will be MANDATORY for polluters to reduce carbon emissions OR remain Voluntary.
If anything, the market should now move more and more towards a true ‘market’ situation where the price of carbon is driven by polluters needing to lower their emissions to meet our targets and the suppliers delivering carbon competitively.
In the meantime, let’s get started!
Carbon Farmers of Australia has 30 years’ Marketing experience. In a former life, we were the founding Directors of an Integrated Marketing company in Sydney, specialising in Business to Business marketing.
Using this extensive experience, we have identified 4 potential ways to ‘Direct Market’ your ACCUs.
Please contact us to get more detail on any of the following.
1. Sell to your existing customers. Many farmers are now using Farmers Markets, or other methods of Direct Marketing to sell their meat or other produce. If this farmer has undertaken an ERF project, and has ACCUs to sell, they could add this to their offering.
E.g. “While you are eating your beautiful saltbush Lamb, why not offset your carbon footprint and help Australia fight climate change by buying a carbon credit with the meat?” OR “Lower your carbon footprint while you eat your steak!” is an even better way to push back against the ‘cows belch methane’ attack!!
2. Help others fulfil their ERF contracts. Some of the Carbon Agents and/or project proponents, who have ERF contracts to fulfil, may, for reasons beyond their control, have need to buy extra Credits to cover a contract. This means that soon ‘carbon exchanges’ around Australia may want to buy ACCUs to fill this demand.
3. Go Direct to a Polluter. In many districts, there are mines or big companies who buy produce from farmers or who have to exist peacefully in our Regional Areas. What a good news story for them if they ‘partnered’ with a farmer or a group who were protecting their farms by assisting forest to grow, or storing carbon in the soil, or preventing methane from being belched! This method could lead to a ‘contract’ similar to the one provided by the Government – an agreement to buy the credits for 10 years, for instance.
4. Direct Selling by Website. Any producers who already have a website could add a ‘buy a carbon credit’ page – similar to selling direct at a Market, this is Direct Marketing on the web. Selling either their own ACCU’s, or someone else.
If any of the above appeal to you, please contact us for more information.
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