Australia’s Labor leader Bill Shorten will on Friday pledge to dismantle the government’s ERF if he wins next year’s election, according to local media reports.

Shorten will use a speech at a university to decry the policy as one that “great wads of taxpayer cash to big polluters to keep polluting”, the Guardian newspaper reported.

Shorten will promise to honour contracts already signed with polluters by the Coalition but will then abandon the scheme, it said.

The A$2.55 billion fund is Australia’s main tool to meet its 2020 target of cutting GHG emissions to 5% below 2000 levels, and will remain the chief climate instrument in the 2020s if the current government stays in office.

In the ERF reverse auctions, project developers offer to cut future emissions at a certain cost per tonne, and the government buys the cheapest ones. In the first auction the average price paid was A$13.95 per tonne.

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