Carbon Conscious alert to ETS future

31 Aug 2012, 3:56 pm   -   Source: AAP

Carbon Concsious says it's upbeat on this year despite losing its biggest client and the government's scrapping of the carbon floor price

Carbon offset company Carbon Conscious says the loss of its biggest contract with Origin Energy and the government's scrapping of the carbon floor price will not be a huge blow to its finances this year.

Carbon Conscious has shrugged off the timing of the contract loss from Origin on the same day the government scrapped the proposed $15 floor price for its emissions trading scheme (ETS) as a "coincidence".

Carbon Conscious generates revenue by planting millions of trees that sequester carbon on behalf of big businesses.

It has planted more than 15 million trees for oil and gas producer Origin Energy in the biggest carbon bio sequestrian project in the country.

On Tuesday, Origin Energy announced it would not proceed with its 2013 planting options, placing further uncertainty on the cost effectiveness of carbon forestry as opposed to carbon unit trading.

But Carbon Conscious director of business development Daniel Stevens said Origin's announcement was made before the government's, and was not linked to it.

"It was just a coincidence that we came out with the announcement out in the morning and then (Climate Change Minister) Greg Combet...with his later on during the day," Mr Stevens told AAP.

"Origin had let us know about that for a day or two before that, nobody knew that the government was to come out with the announcement - the two are just not linked."

Mr Stevens said Origin's decision was based on other commitments, including focusing on its Gladstone LNG (liquified natural gas) project.

"They are happy with us, and now they're just looking for some sentiment improvement to see what will happen at the next election."

He said the scrapping of the floor price would be good for firms like his because carbon forestry would be a cheaper option in the long term.

"It's given us more chance of signing new business.

"When a company is look at investing into long-term hedging solutions, they need to understand or have comfort around what the future carbon price will be.

"By locking into a long term stream of carbon known prices, they've mitigated that risk."

Carbon Conscious, one of only two of its kind in Australia, on Friday delivered an almost five-fold profit increase for 2012, beating its January forecast by 20 per cent.

Profits rose to $4.19 million for the year to June 30, from $854,762.

But despite losing its biggest client, the firm is upbeat on this year.

It said it had locked in contract revenues of $45 million in the next 15 years, and was in talks with several new clients from the mining, electricity generation and coal industries on potential contracts.

It is also in search for a new chief executive, after the board decided not to renew Peter Balsarini to the position on Tuesday.

  • Follow us: 
  • Follow us on Facebook
  • Follow us on Twitter
  • Follow us on Youtube