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Good morning. It is my pleasure to speak at this timely event. Commitments in Europe preclude
me from joining you in person. I thank the Carbon Market Institute for giving me the
opportunity to participate via this pre-recorded message.
The peak of the first progressive surrender cycle is approaching rapidly. My hope for
this summit is that it will answer all your remaining questions at a technical level so
you are confident of the steps to meet your carbon price obligations by the 17 June deadline.
I also hope the summit provides you with information relevant to your strategic business decisions
to manage your obligations effectively and take advantage of the opportunities in the
emerging carbon market.
As the Regulator, one of our early actions was to publish the Compliance Education and
Enforcement Policy to articulate our regulatory stance which emphasises client education as
the foundation to ensure clients fully understand their entitlements and obligations under the
law. Having given clients every opportunity to comply, we will have clear grounds to pursue
any who appear to deliberately contravene the law. I am pleased to say that thus far,
our interactions with clients have been very positive. We have benefitted from the overwhelmingly
constructive approach taken by liable entities and their representatives and I thank you
for it. This summit will assist businesses to equip themselves to make an informed decision
in meeting the progressive surrender deadline. Any entity who fails to surrender enough eligible
emissions units to satisfy its progressive liability by midnight on 17 June 2013 will
incur a shortfall charge. The Regulator has no discretion regarding these charges. If
you do have remaining questions, please take this opportunity to speak to the Clean Energy
Regulator representatives present, and they will assist you.
There are two sides to the carbon market. While this event focusses on the demand side
--to acquire and surrender units to acquit carbon price liability -- we are equally focussed
on the supply side. We have issued over $2billion worth of free units under the Jobs and Competitiveness
Program. Recipients are entitled to sell these units back to us at the daily price published
on our website. Instead, sellers have generally chosen to put their units into the market,
with financial institutions purchasing units for later sale and surrender. We are observing
these trades through the Australian National Registry of Emissions Units and it is very
satisfying to see the market, and our new systems, working as intended, including the
very first surrender of units which occurred before Easter.
Australian Carbon Credit Units are another option for liable entities and the Carbon
Farming Initiative is going from strength to strength. The number of accredited projects
continues to expand as new methodology determinations become available. We are approaching half
a million ACCUs created through CFI, and they are finding a ready market. There is plenty
of room for growth in this segment of the carbon market and we are delivering webinars
and workshops around the country to further increase participation.
Looking beyond 17 June, we are focussed on delivering the elements required for the full
year reports due by 31 October. We will continue to consult clients extensively as we develop
our systems and processes to ensure they are working to meet your needs.
Longer term we are looking toward the flexible price period and preparing for our trial auctions
later this year. We are making progress to give effect to the one-way link with the European
Union ETS. We are sharing experience and expertise not just with established market operators
such as in Europe and California, but also with countries such as China who are planning
a national emissions trading scheme to follow from the current set of local pilots.
As the operator of the primary market, we have an interest in seeing the secondary market
function effectively. The unit trading we have already seen is great early evidence
of a secondary market forming. We have good relationships with secondary market participants,
building on our experience administering the Renewable Energy Target. We will continue
to work closely with everyone to protect the integrity of the units and of the market itself.
Many Australian companies are already recognising that a proactive approach towards reducing
emissions and increasing energy efficiency gives them a competitive advantage. A price
on carbon and the renewable energy target give an added impetus in this direction. As
the Chair of the Clean Energy Regulator, I am proud of our work to support Australia's
transition to a low carbon economy through an informed and efficient market for carbon
and investment in renewable energy.
I wish you all a valuable and productive time at this summit.