AGL makes first trade in emissions scheme

Australian
Tuesday 20/5/2008 Page: 2

A MAJOR Australian energy company has decided not to wait for the start of a national emissions-trading scheme in 2010 and is offering to buy and sell future permits to its customers. Gas and electricity giant AGL has just completed the first future sale of permits in the yet-to-be-finalised trading scheme, promising to sell 10,000 tonnes worth of greenhouse gases to Westpac on February 1,2012, for $19 per tonne.

The trade is the result of months of research by AGL as it positions itself before the release of the federal Government's green paper on an Emissions Trading Scheme in July, leading to the framing of draft legislation by the end of this year. AGL chief executive Michael Fraser said the first trade was more of an introductory offer, and at such a small scale should not be interpreted as defining the expected future price. "We've been preparing for this for a number of years now," Mr Fraser told The Australian.

We formed a view of where that might be. This is really establishing that market. The sooner we can establish liquidity in that market, we will be looking to buy or sell to other parties so business can start to get some certainty about what the costs are going to be out there." A private carbon exchange was established last year, but only trades existing state-based offset schemes.