Firms in a fog over emissions scheme

Canberra Times
Friday 30/5/2008 Page: 22

With just over a month to go until Australia's mandatory carbon emissions reporting scheme comes into force, heads of business remain confused about its requirements. From July 1, the National Greenhouse and Energy Reporting Act 2007 requires business to begin collecting mandatory information about their output of greenhouse gas emissions and their production and consumption of energy. PriceWaterhouseCoopers director Sean Lucy said he expected many Australian business would be caught unaware by the mandatory reporting requirements.

Although business must begin collecting the information from July, the filing of data does not have to occur until August 2009. "Some people are going to play catch-up... because they won't have given it the attention it deserved," he said yesterday during the National Emissions Trading Summit in Sydney. A recent PriceWaterhouseCoopers study indicated that 67 per cent of business leaders were concerned about regulatory obligations regarding greenhouse emissions.

A separate survey conducted on behalf of carbon consultancy Carbon Planet found 76 per cent of chief financial officers had only a fair or poor understanding of carbon emissions reporting. About 700 Australian companies, such as electricity generators, coal mining companies and large manufacturers, and 1700 sites, such as power stations, coal mines and manufacturing plants, will have to report emissions under the Act or face prosecution.

The data collected under Act is a key plank of the Federal Government's emissions trading system, to begin in 2010. Mr Lucy said an emissions trading system would be one of the key drivers for business change, but many business leaders were slow to understand the opportunities and risks. Businesses must be prepared for higher costs as new products were introduced, as well as effects on share price and risk to brand and reputation.

"The financial impact for a business is not the price of carbon, it will be the extent to which it can pass the cost on to the consumer," he said. "A key thing any business has to do is understand what their emissions profile might be and what their costs associated with that might be." Although many details for Emissions Trading Scheme were yet to be developed, such as legislation and accounting and taxation requirements, businesses could still take action, he said.

In the 2008-09 financial year, businesses should set emissions reduction targets and forecast their carbon growth scenarios. He urged businesses and price carbon into their investment decisions. Some clarity on the emissions trading system design will be provided when a Government green paper is issued in July. Department of Climate Change assistant secretary Anthea Harris said the paper would include several preferred positions. Ms Harris said,". It will be one of the greatest economic reforms we have ever seen."