Carbon equivalent price on HFCs becomes reality in Australia

Carbon equivalent price on HFCs becomes reality in Australia

On 8 November 2011, the Australian Senate passed the controversial government’s Clean Energy Act establishing a price on carbon Carbon equivalent price on HFCs becomes reality in Australiaand imposing carbon equivalent pricing on HFCs. As of 1 July 2012, the legislation will put an initial price of $23 AUD (about €17) per tonne of carbon dioxide equivalence on HFCs.

The Clean Energy Act entered legislation on 8 November 2011 after 36 senators voted in favour and 32 against and will become law on 1 July next year. The package of bills includes amendments to the Ozone Protection and Synthetic Greenhouse Gas (Import Levy) Act under which hydrofluorocarbons (HFCs), perfluorocarbons (PFCs), sulfur hexafluoride (SF6) and equipment containing such gases will face an equivalent carbon price.

The HFC charge is the step in the right direction in facilitating the widespread transition to climate-friendly refrigerants, such as hydrocarbons.

At least €17 per tonne of CO2eq to be levied

The central pillar of the adopted plan establishes a carbon pricing mechanism that determines the applicable carbon charge per tonne of CO2 equivalence over the first three years at:

  • $23.00 (about €16.94) in 2012-13
  • $24.15 (about €17.67) in 2013-14
  • $25.40 (about €18.71) in 2014-15

This translates to a charge of about €22 per kg of HFC134a in 2012-13, assuming a Global Warming Potential (GWP) of 1,300 for the refrigerant, rising to €24.32 in 2014-2015. Using the more accurate GWP figure of 1,430, the carbon charge would amount to about €24.2 per kg of HFC134a, rising to €26.75 in 2014-2015. The HFC levies will be adjusted annually to reflect the prevailing carbon price.

In 2015, the carbon tax will be replaced by an emission trading scheme with permit prices contained between a $15 (about €11) minimum price and a maximum price of $20 (about €15) above the expected 2015 international permit price (to be decided in 2014).

The double dividend

With the carbon price being paid by Australia’s largest polluters, the government estimates that 9 out of 10 households will receive compensation from a combination of tax cuts and increases to family benefits.

happy wheels
Share this