Permits issued under the New Zealand ETS are among credit types under consideration for eligibility in Australia’s voluntary CO2 market as the government is preparing to revamp the National Carbon Offset Standard (NCOS).
The Ministry of Environment on Monday launched a public consultation process on potential changes to the NCOS and the Carbon Neutral Program to bring Australia’s voluntary market into step with the Emissions Reduction Fund.
“The Government committed to review the NCOS as part of the Emissions Reduction Fund development in 2014 to ensure continuing integrity of the carbon offsets available to the Australian voluntary market and to improve uptake,” the ministry said in a statement.
Under the programme, companies reduce around 1 million tonnes of CO2e per year, and the government cancels a corresponding number of Kyoto units to ensure the emission cuts are additional.
Among the questions asked in the consultation paper is whether new offset types should be considered for eligibility.
Business and community groups have already proposed that NZUs as well as offsets from the Plan Vivo Standard should be accepted, the paper said.
Allowing NZUs could potentially take some supply out of New Zealand’s mandatory market, although market participants were doubtful it would have an immediate impact.
“Based on the price of NZUs I don’t think it will dramatically increase the demand for NZUs. There are cheaper alternatives and if you are looking for something with a marketing benefit there may be better options,” one trader told Carbon Pulse.
NZUs languished in the NZ$2-3 range for two years, but have recently climbed to NZ$6.50 after New Zealand emitters lost access to UN offsets.
The consultation paper also asked whether the NCOS should be abandoned completely and simply replaced with the British Standard Institute’s PAS 2060 specifications for carbon neutrality, or if it should let the standard be administered by a private organisation rather than by the government.
The consultation paper is open for public comments until Apr. 22.
By Stian Reklev – firstname.lastname@example.org