The Federal Government’s new carbon tax places a significant impost on companies in emissions-intensive industries. Under the carbon tax, due to commence on 1 July this year, affected companies will be required to pay $23 per tonne for their direct carbon emissions in 2012-13.The cost rises in 2013-14, to $24.12, and increases to $25.40 in 2014-15. After 2015, the price companies pay to emit one tonne of carbon will vary according to a market price set between limits of $15 per tonne (the ‘floor’) and $20 above the 2015 market price (the “ceiling” or “price cap”). The carbon tax legislation allows for carbon offsets whereby the capture and storage of carbon from the atmosphere or some emissions reduction activities can generate carbon credits to “offset” companies’ tax obligations, and thus reduce the cost of compliance. Companies that are affected by the carbon tax need to look at sourcing eligible carbon credits from the market; developing carbon trading solutions; and establishing low-cost, long-term carbon offset programs.” CO2 Australia recommends that companies undertake a thorough impact assessment. This would provide the company with a model showing the effects of carbon price rises on the business, and how to minimise this liability. “We … Continue reading How to reduce your carbon tax liability