Public submission to the Clean Energy Regulator: Consultation Paper a New Approach to Contracting Under the Emissions Reduction Fund - An Option to Deliver

Corporate Carbon Advisory have provided a public submission on this update, which can be found on the Clean Energy Regulator’s page. Our main ideas are:

• The bidding behaviour for option to deliver contracts will likely better reflect project costs, as project proponents will retain the upside price benefit should secondary market prices rally.

• Option contracts will improve the bankability of the scheme, as finance providers will not have to be concerned about potential future liabilities from out-of-the-money committed volume contracts.

• It allows for the development of projects that are not ‘locked away’ from companies wishing to voluntarily purchase and retire ACCUs or who may have a potential future liability under the safeguard mechanism.

• It removes the potential the Regulator to enforce contractual damages against a project proponent (especially a landholder) which may adversely impact the perception of the scheme.