How will businesses be affected by the carbon tax repeal?
The government's decision to repeal the carbon tax won't have much of an impact on businesses in the short-term, but this may change sometime in the future.
This is according a report from Deloitte, which explained how companies will still need to focus on lowering their emissions and presenting a more sustainable image.
What businesses should do next
Deloitte has outlined three steps that businesses will need to take now the carbon tax has been removed - and they should be completed as soon as possible.
1. Companies should make it a priority to manage the compliance issues raised by the carbon tax. Even though the scheme has been removed, there are still going to be lingering problems that need to be addressed.
There will still be reporting obligations in October this year and final payments must be made by February 2015. Non-compliance penalties will still be in force until this time.
2. There's no better time for companies to prepare for the Direct Action policy and the Emission Reduction Fund (ERF).
Both schemes are being introduced to run alongside other programs to lower emissions, including energy efficiency standards for appliances and the Renewable Energy Target.
3. Deloitte also believes it should be high on companies' priority lists to recognise that the National Greenhouse and Energy Reporting (NGER) scheme will stay in place.
July 1 marked the beginning of the reporting year for the NGER scheme and it's not something businesses can afford to put on the sidelines. Assessments are due by October 31.
Other steps to take
There are various other tasks that firms can be getting underway over the coming months, as explained by Paul Dobson, Deloitte's lead partner for sustainability.
"Companies should review their contractual arrangements, pricing and supply-chains to ensure that the effect of the carbon pricing removal flows through appropriately - particularly in the energy sector," he commented.
Large organisations need to be aware that the NGER reporting regime will stay in place, meaning they have to provide information on energy consumption, carbon emissions and energy production.
All data collated through the NGER will be used as a safeguarding mechanism that will fall under the ERF in months to come.
Be ready for the ERF
The ERF has the potential to bring some widespread changes for business energy users, so Deloitte believes it is essential for the policy to be fully understood before it's implemented.
"While the precise timing of the introduction of all elements remains uncertain at present, it is likely that we will see the commencement of key components of the ERF in the latter part of 2014," said Mr Dobson.
Various projects will be covered through the ERG, including making upgrades to commercial building, enhancing the energy efficiency of industrial facilities and reducing waste gas from coal mines.
Now is the ideal time for businesses to think about any future projects they might be undertaking and how they might be able to make the most of the ERF and any funding available to them.
Mr Dobson explained how firms must have registered projects in the pipeline ready for the first round of auctions, which is likely to take place during the second half of this year.
There need to reduce emissions also needs to be maintained even though the carbon tax no longer exists. At present, the agreement is to reduce emissions by 5 per cent on 2000 levels by 2020, which is something organisations large and small cannot afford to ignore.
This will not only bring down electricity prices, but also encourage more energy efficiency projects to be undertaken while contributing to Australia's carbon reduction targets.
Posted by Richard West