We are at an exciting turning point as we reimagine how to develop, use, and connect with the energy landscape. With the international community coming together in Glasgow for Cop26 and the establishment of the Science-Based Targets initiative (SBTi), we are gaining momentum towards reaching a cleaner, more vibrant economy.
Australian industry is making bold commitments of its own to achieve science-based targets that stay in line with keeping global climate change under 1.5 degrees Celsius. This is positive for environmental health, and it also demonstrates savviness as Australia embraces technological advancement and innovation to drive economy into a bright future.
To prepare for the changing nature of business, these are programs, ideas, and initiatives that should be on your radar:
SBTi Launches Net Zero Standard
Developed through a multi-stakeholder process, the SBTi is the first Australian guideline to help companies set science-based emissions reductions targets designed to keep emissions in line with maintaining global temperature rise under 1.5° Celsius.
“The Net-Zero Standard gives companies a clear blueprint on how to bring their net-zero plans in line with the science, which is non-negotiable in this decisive decade for climate action. Because we are running out of time.”
These targets include 1) near-term targets that must be met within 5-10 years of submitting a plan to SBTi and 2) long-term targets that need to be hit by or before 2050.
Under the SBTi, carbon offset programs do not count towards near or long-term targets, placing real emphasis on companies to reduce their Scope 1, 2, & 3 emissions.
Thinking about setting a Net-Zero target? Talk to us about your carbon reduction strategy.
Australian Carbon Credit Unit (ACCU) Price Increase
Increased demand from heavy polluters caused ACCU prices to soar this year. Even with increased supply of ACCU from the Clean Energy Regulator (CER), there has been unprecedented demand as companies that have surpassed government-set emissions levels scramble to offset their pollution.
The ACCU price surge benefits organisations that are voluntarily generating credits through energy efficiency, biogas generation and fuel-switching.
Carbon credits will continue to have their place and prices will likely continue rising as carbon neutrality maintains popularity. With greater focus on SBTi protocol, it is probable that their prevalence will shift as more companies embrace SBTi methods and prioritize their own emissions reductions over carbon offsets.
If you haven’t factored ACCU pricing into your next project, now is the time to reconsider how the carbon value of your projects can be realised to boost the energy productivity of your business as the world transitions to net-zero.
Shadow Carbon Price
While the concept of a shadow carbon price is not new, it should be given considerable thought if your organisation is not currently factoring the price of carbon into your investment or business operation strategy. With more and more governments announcing net-zero commitments, a cross border adjustment mechanism as proposed by the EU or other form of mandated carbon emissions control mechanism may be right around the corner. Hedging against those changes by incorporating a shadow price for carbon into current financial planning presents a good way to prepare for potential policy change.
Upcoming Government Programs
Program implementation will make considerable funds available for technological implementation and innovation.
- Energy Efficient Communities (EEC) Program – This is an Australian wide program that opens on 12 Jan 2022 at 9am AEDT. This grant provides food & beverage manufacturing businesses (with less than 200 employees) up to $25,000 to improve energy efficiency practices and technologies and better manage energy consumption to reduce their power bills. The program can provide grants towards energy efficiency projects, including:
– installing energy efficient equipment (not including solar PV)
– installing energy metering & monitoring systems
– energy audits to identify opportunities
– compressed air system audits
– developing an energy management plan
– feasibility assessments of energy projects (not including solar PV)
- Business Decarbonisation Program — The NSW Government is investing $22 million towards helping businesses reduce their carbon emissions. Their plan is to provide strategy, monitoring, technological improvements, and skills training in order to lead businesses forward and build a workforce capable of identifying opportunities and implementing improvements to reach net-zero emissions.
The program will have four areas of focus which will be progressively rolled out over 2021/22:
1. Strategic planning for net zero
2. Metering and monitoring
3. Targeted technical services
4. Industry upskilling
- Victorian Government — Infrastructure Victoria and Department of Environment Land Water Planning will provide final advice on December 31, 2021 on how to best use the gas transmission and distribution networks to stay on track to reach net-zero emission by 2050. Tasmania is engaging in similar discussions related to natural gas infrastructure and is still at the initial phases of discussion and consultation.
- Net Zero Industry & Innovation Program — NSW Government strategy to partner with industry in order to reduce emissions, boost the economy, and spur job growth by investing $750 million. This grant funding is set to encourage innovation in technology and develop pilot programs for innovative methods at implementing low-carbon technology.
The Program has three areas of focus:
1. Clean Technology Innovation ($195 Million) – supporting the development and continued innovation of emerging clean technologies
2. New Low Carbon Industry Foundations ($175 Million) – laying the foundations for low emissions industries by building enabling infrastructure and increasing the capability of our supply chains
3. High Emitting Industries ($380 Million) – deploying low emissions technologies and infrastructure to reduce the emissions associated with existing, high emitting industrial facilities
Talk to us today about any of these upcoming programs or what other energy efficiency support may be suitable for your business now and in 2022.
Energy management may not be your business focus, yet it is becoming more deeply engrained in all business operations as Australia follows through on its commitments to reach net-zero. Staying abreast of these trends, new programs and changes is a powerful way to stay informed, prepared, and in a position to capitalize on the changing energy landscape.