By SEMF national sustainability team leader Dr. Gareth M. Forde

Do I need to report my carbon emissions?

If you have operational control over a facility that emits over 25,000 tons of carbon dioxide equivalent (CO₂-e) or produces / consume over 100 TJ of energy, you will need to report your emissions for the 2008-09 financial year by 31 Oct 2009. A whole corporate group will need to report if it emits over 125 000 tons of CO₂-e or produces / consume over 500 TJ of energy.

What do these emission amounts mean in real terms?

Indicatively, a facility that uses around fifteen 60 ton trucks could break through the threshold and need to report. A corporation which uses about seventy-five 60 ton trucks throughout its whole business may need to report. However, company thresholds will be reduced over time hence a company will need to report for the 2010-11 financial year onwards if they use approximately thirty 60 ton trucks throughout their business.

If you operate a landfill that receives 100 kilotonnes of waste per annum, you will need to start reporting after about six years of operation. If you operate a landfill that receives 50 kilotonnes of waste per annum, you will need to start reporting after about 10 years of operation.

A facility that runs 1 large gas fired turbine or boiler that uses 0.48 petajoules (PJ) of natural gas will break through the threshold and need to report.

What if I do nothing?

Failure to comply with the National Greenhouse and Energy Reporting Act 2007 (the Act) could result in fines ranging from $220,000 and $11,000 per day for non-compliance.

What is carbon dioxide equivalent (CO₂-e)?

Each Green House Gases (GHG) has a different global warming potential (GWP) or how much it contributes to the greenhouse effect. To simplify the accounting process, all amounts (e.g. tons, kilo tones) for each GHG are converted into the equivalent amount of CO₂ that gives the same global warming effect. Hence, a single amount of carbon dioxide equivalent (CO₂-e) can be presented rather than having to present a number for every single GHG.

What is a Green House Gas (GHG)?

A GHG in the atmosphere contributes to the greenhouse effect by absorbing and emitting radiation within the thermal infrared range. There are 24 different gases that you might need to report on, including CO₂, Methane, NOx and hydrofluorocarbons. Methane emitted from coal mines and landfill is of such interest because methane is 21 times worse than CO₂ in terms of its global warming potential. The worst GHG is sulfur hexafluoride (used as an insulator in circuit breakers) which is 23,900 times worse than CO₂.

What fuels do I need to report?

There are 57 different fuels (e.g. diesel oil, brown coal and dry wood) and 9 energy commodities (e.g. solar energy, wind energy and electricity) that you may need to report.

What is carbon trading?

Carbon trading is where the federal government sets or caps Australia’s emissions level then lets the market decide the price of carbon emissions. It is possible this will occur from as early as 1st July 2012 onwards.

How will carbon trading affect me?

If carbon is traded at $25 / ton CO₂-e, electricity prices are expected to increase by 18% with a 12% increase for natural gas, according to Federal Government modeling. However, due to the uncertainty of the situation, businesses trying to sign long term electricity or natural gas contracts are finding much higher percentage increases in their energy costs (some as high as 100%) due to a “risk premium” which is a result of the uncertainty that exists in the current market. Over the next ten years, increases in electricity prices will be due predominantly to natural increase due to the market forces of supply and demand, with carbon trading expected to be a minority contributor to price increases.

What can I do to prepare for increasing energy prices?

SEMF suggests:

1. Perform a carbon footprint: You need to know where you currently are.
2. Carbon analysis: find where your business is “carbon heavy” (ton CO2-e / $million revenue) and where you can get the biggest bang for your buck by using a Marginal Abatement Cost Curve (or MACC) – this will show where you can reduce the most carbon whilst also making money.
3. Set KPIs: you need a goal to drive your actions. One option is to set an across the board goals such as 5% energy reduction per annum, install / implement all technologies (i.e. Clean Technologies) with a discounted pay back period of 3 years or less or take actions according to your MACC (see above).
4. Install / implement Clean Technology
5. Develop an acquittal strategy: Do you want to completely abate your emissions, do you want to off-set emissions or are you ready to trade on the market?
6. Federal funding: Explore local, state and federal funding options.
7. Behavioral change: Increase awareness within your business and also for other businesses you interact with. For example, developing policies that your couriers and cleaners be carbon neutral.

What is Clean Technology (Clean Tech)?

Put simply, Clean Tech does exactly what current technology does but uses less energy and resources hence emits less GHG. Clean Technology includes products that improve operational performance, productivity, or efficiency while reducing costs, emissions, inputs, energy consumption, waste, or pollution. Carbon capture technology is also often referred to as Clean Tech.