The carbon windfall ‘game’: Impact of a mid-year CPM repeal

A mid-year repeal of the Australian CPM may lead to a windfall of A$2bn for the Metals, Energy, Materials and Power sectors, with potential for entities to ‘game’ assistance programs via the CER’s legislated “buy-back” facility. In this update we explore scenarios for the Q1 FY15 repeal of the CPM, and the cost/windfall of cashing in free permits, along with scenarios for government to mitigate any liability via the provision of future credits into a re-worked Direct Action Plan, as seen in the EU ETS.

Key findings:

• Should the CPM be disbanded prior to December 2014, companies are likely to