Carbon pricing mechanism repeal
The Clean Energy Legislation (Carbon Tax Repeal) Act 2014 was enacted on 18 July 2014.
This means that the carbon pricing mechanism will end in February 2015 when the compliance requirements of the 2013–14 financial year are finalised.
For financial services in the carbon markets, the main provisions of the Act are that:
- a carbon unit will continue to be a financial product until the 'designated carbon unit day' which is 9 February 2015 or such later day as is specified by the Clean Energy Regulator by a legislative instrument
- a European Union allowance (EUA) and an Australian-issued international unit (AIIU) will also continue to be financial products until the designated carbon unit day because they will continue to be eligible international emissions units (EIEUs) until that day
- consequently, the financial services laws, including the requirement to hold an Australian financial services licence (unless exempt), will continue to apply to financial services in relation to carbon units, EUAs and AIIUs until the designated carbon unit day, and
- after the designated carbon unit day, ASIC may vary the authorisations of Australian financial services licences to remove any authorisations to provide financial services in relation to carbon units or may cancel an Australian financial services licence if the only authorisations are in relation to carbon units. In the lead-up to the designated carbon unit day, we will be advising relevant Australian financial services (AFS) licensees of the administrative steps that we will be taking to vary or cancel their AFS licence.
The Act does not affect the status of Australian carbon credit units (ACCUs) or other types of EIEUs (such as CERs) as financial products.