The carbon advisory arm of consultancy Ndevr has teamed up with a global trading firm to offer early payments to project developers in exchange for ownership of carbon offsets.
Ndevr Carbon Reductions is seeking a bigger role in Australia’s offset market by offering upfront payment to project developers.
The government, the sole buyer of Australian Carbon Credit Units (ACCUs) via its Emissions Reductions Fund, only pays for offsets on delivery, which often takes 12-18 months after a contract is signed.
“We take ownership of the ACCUS and conduct all technical works, reporting, commission audits, take a percentage of ERF revenue for our technical support, admin services and financial services,” Ndevr director Matt Drum told Carbon Pulse.
“When the ERF revenue comes through from the government, we will pass the lion’s share over to the project owner,” he said.
Most projects selling ACCUs to the government sign delivery contracts for 7-10 years, but Ndevr’s early payment model is only for the first year of abatement.
Funding will be provided by a global trading firm involved in a number of carbon markets and that holds an Australian Financial Services Licence (AFSL), Drum said, declining to name the company.
The first project to sign up is an industrial scheme that was registered under the ERF in November, according to Drum. He said Ndevr will focus on large-scale projects in sectors such as transport and industry.
The first batch of projects agreeing deals with Ndevr will bid in the next ERF auction on Apr. 27-28.
The government fund is expected to run out of cash by the end of this year. Despite comments from Environment Minister Greg Hunt that the government will continue to provide funding, analysts Reputex recently predicted that the ERF faces 9-12 months where it won’t be able to buy any offsets at all.
“I think there is only a small risk for contracted projects, and over the next four years the ERF will be the primary driver of carbon reductions in Australia. Without it Australia wouldn’t have an active carbon policy,” said Drum.
By Stian Reklev – stian@carbon-pulse.com
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