Carbon Tax won’t go away

An issue that won’t go away and is still a topic on many people’s minds’ is What is the Carbon Tax and how does it work? 
Well we received a good explanation recently from one of our associates in the International Association of Professional Accountants,  HMH, that we wanted to share.  If you would like to know more about how it affects your business and would like a Carbon Footprint assessment contact us. We have established a relationship with two specialists in the market space and can even provide access to “Carbon Credits” to trade.  Please contact Peter Morgan in our office.  Phone : 07 5539 9777
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Are you ready for a low carbon future?

 Through 2012 the Australian community will realise that the Federal Government is determined to change the way that Australians take energy for granted. We are the number one polluters per capita in the World. Even exceeding United States levels. The Government has committed to reducing our carbon emission levels by 25% of 2000 levels by 2020.

 To do this they are forcing Australia’s major polluters to pay a carbon tax. This cost  will spread across the supply chain, thus forcing the next level down to change their behaviour and so on.

 There is no legislation currently forcing businesses to conduct carbon tax audits, unless they are a major polluter. However , major companies have already begun to contact their suppliers to ask what steps the supplier is taking to reduce their carbon footprint.  As we know, if you can measure it you can manage it. The only way to do that is via a carbon tax audit.

Carbon Tax Audit
Banks and Business Brokers are aware of the changes that are coming, and therefore prefer that a carbon tax audit is prepared, because that represents a true picture of a business’s financial position.

Grants are now available, through AusIndustry, to support carbon reduction capital projects. Targeted primarily at the food industry, other industry groups are also eligible, provided certain criteria are met.

 This is what KPMG wrote in 2011 in respect of the future that is now here:
 “New systems and processed for carbon related data and financial issues.  A carbon price will  have consequences for all Australian business. Implications will arise as a result  direct and indirect exposures to a  carbon price, requiring the management of strategic, operational and financial issues. Successful management of these issues will require a sound understanding of the implications, robust governance structures, strong data integrity, accurate reporting and credible disclosure processes.

Opportunities to reduce carbon cost
Previous analysis of carbon abatement options ( such as fuel switching, heat recovery, energy efficiency retrofits etc.) will now require revisiting. Renewed analysis may result in new opportunities to invest in abatement activities that were previously considered too costly because of their low/negative returns or long pay back periods.”

Be ready for July 1st 2012
There will be a huge amount of activity after July 1st 2012. The businesses that prepare for the future will be able to determine their future.

 For further information about carbon tax related issues, or to be put in touch with experts in the field, including sourcing of carbon audits, please call Peter Morgan at Munro Accountants on 07 5539 9777 or email peterm@munro.com.au.

NZ Carbon Pricing- Lessons for Australian Business

New Zealand has been implementing an Emissions Trading Scheme (ETS) since 2008 and it would be sensible to look across the ditch to see what can be learnt from their experience.

To date, the NZ ETS only applies to forestry, energy generation and fossil fuels but already impacts have been felt in the pricing of electricity and petrol. Further significant price increases are expected with the inclusion of industrial waste in 2013 and agriculture in 2015.

Carbon is actively being traded in New Zealand. The price of carbon has been capped until 31 December 2012 at $25 per NZU (NZ Unit of carbon – effectively the right to emit one tonne of carbon dioxide). NZ carbon reached a post Christmas high of NZ $7.65 on February 3^rd 2012.

In Australia, the country’s 500 biggest polluters will be required to pay for their carbon pollution from 1 July 2012 onwards. The Federal Government has shortlisted 800 businesses from which it will draw its list of 500. There is still much confusion and a lack of understanding of the impact that will be felt by not just the unlucky 500 businesses, but by the wider economy as the effects ripple through the supply chain.

Carbon tax and carbon accounting are without doubt going to become areas where experts can truly add value to your business. The legislation and deadlines are constantly being amended and altered. Don’t put your business at risk by not staying abreast of developments.

Only deal with reputable intermediaries if buying or selling carbon credits. As with many new industries, there are opportunists that will exploit opportunity to make a quick dollar. Make sure you deal with experts.

Your first port of call should be Munro Accountants, as we make it our business to look after your business in this emerging area. We can refer you to carbon accounting and audit specialists, point you in the right direction for purchasing carbon credits or recommend an organisation to give you a green audit and third party green certification.

Your carbon commitments will increasingly influence your business investment decisions. Make sure you understand the carbon implications of decisions you are making now. Your Munro contact can assist in identifying opportunities and implications.

© Peter Morgan 2012