Policy uncertainty around the longevity of carbon-reduction policies hasn’t prevented carbon trading firm CO2 Group from notching its eighth consecutive year of growth.
Net earnings for the year to September 30 more than tripled to $4.9 million from a year earlier, with sales surging 81 per cent to $64 million, the company reported today.
Andrew Grant, CO2’s chief executive, said the company had diversified its operations to limit fall-out from policy changes, such as the federal opposition’s pledge to eliminate a price on carbon if it wins power.
“The lion’s share of our revenue and earnings growth has occurred without the federal carbon pricing scheme,” Mr Grant said. “We’re not dependent on a particular policy setting of one kind or another.”
Diversification included the formation of CO2 Asia to explore carbon trading and other investment opportunities in the region, and its growth in New Zealand where it is now the largest trader of carbon permits.
One area where the political risk is reduced is the government’s carbon farming initiative, which largely has opposition support. Progress, though, had been slow as the clean energy regulator and other bodies had to certify each project’s abatement of carbon emissions, Mr Grant said.
The government last week unveiled the first farm to secure approval of carbon abatement effort, a piggery in south eastern New South Wales. Regulators have approved only four “methodologies” with some 40 more awaiting acceptance.
Mr Grant said it may take as long as another nine months before the CFI is bedded down.
While the compliance-based carbon market remains vulnerable to policy shifts, the market for voluntary carbon abatement efforts has held up despite the introduction of the carbon tax on July 1, he said.
Greenfleet, a charity set up to offset greenhouse gas emissions by planting forests, said it had also seen no drop-off in interest for voluntary action since the tax’s start.
“We have seen any noticeable decline in our levels of support at all,” said Sara Gipton, chief executive of Greenfleet, citing an unchanged willingness by drivers of Europcar car rentals to pay extra to offset their carbon emissions.
While many people view the carbon impact as long term, they see “voluntary action is something they can do right now”, she said.
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