ENVIRONMENTAL commentators have maintained their disappointment in the Emissions Reduction Fund, with Latrobe Valley power stations unlikely to participate in the scheme.
Federal Environment Minister Greg Hunt announced the $2.55 billion ERF white paper on Thursday, with the government purchasing 37 million tonnes of carbon abatement for $660 million.
But unlike the carbon tax, which would have charged electricity generators for every tonne of carbon emissions, the incentive-based ERF policy has left electricity generators under no fixed emission reduction requirements.
The white paper said it would continue to consult with the sector on the specific application of the safeguard mechanism and its interaction with the Renewable Energy Target.
“Therefore as flagged in the Green Paper, the generation and networks sector could be split out from the rest of the economy in the design of the ERF,” it said.
Environment Victoria chief executive Mark Wakeham said participants in the scheme so far included the landfill sector and carbon farming offset projects.
“There’s no accepted methodology for power stations to bid in; power stations seem to be sitting on the sidelines watching to see what happens. It’s very unlikely.”
Colleague and EV safe climate campaign manager Nicholas Aberle said the ERF was the only climate policy at federal level and did nothing to address emissions for the sector responsible for 50 per cent of Victoria’s emissions.
Dr Aberle said he planned to write a submission on the policy’s ‘safeguard mechanism’, which aimed to ensure emissions reductions paid through the ERF were not offset by increases in emissions elsewhere in the economy.
AGL Energy Limited, owner and operator of the Loy Yang A power station and mine, said seven landfill gas generation projects were successful in the first auction under the ERF announced by the Clean Energy Regular last week.
“Currently, AGL Loy Yang’s participation in the ERF is constrained as there is no approved methodology relating to coal-fired generation facilities but this may change as the scheme is further developed,” an AGL spokesperson said.
Hazelwood Power Station operator GDF SUEZ spokesman Trevor Rowe said the company was not involved in the auction at this stage and until then would not be able to comment.