Carbon Tax.
The Federal Government has now passed legislation enabling a carbon tax of $23 per tonne of carbon dioxide emitted to air from certain industrial sites and this will incrementally increase by 2.5% per annum. It is intended to apply this tax to the 500 highest CO2 emitters, and at this stage the finer details such as the CO2 level at which the tax "kicks in" are still to be revealed. For an overview of the plan, refer to the Clean Energy Future website. The Treasury website also provides information on the economic modelling of the carbon price in graphical format.
Although the Government's Carbon Tax has targetted the 500 worst emitters, the remainder of industry, small to medium sized businesses and domestic users will be affected by the flow on effect in the form of increased electricity and gas surcharges. It remains to be seen whether these surcharges will accurately represent the carbon dioxide equivalents of these energy forms.
If you are uncertain or need help with these calculations, please email us for assistance.
Table showing CO2 emission and potential carbon tax per terajoule of energy
The above table shows the equivalent CO2 emission per TJ (Terajoule) of energy and its corresponding price at the initial rate of $23 per tonne calculated at 100 percent of this emission.
According to the intention of the legislation, the highest emitters, which will include the power companies and refineries will be taxed on emissions above a certain threshold. This will determine the proportion of tax costs which will be passed on to the consumer.
There is a wide variation in potential carbon tax on electrical energy between the States, the highest being Victoria at $7858/TJ compared with $2044/TJ in Tasmania. It is interesting to note that one TJ of electrical energy can be up to six times greater in equivalent CO2 emission than one TJ of natural gas. The final comparison needs to be made on the basis of the cost of one TJ of energy from the various sources. This will vary between States and will vary with the size of your organisation. For further assistance with this calculation, email us.