Australian companies may be able to source carbon emission offsets for as little as $5 a tonne under the government's proposed national energy guarantee, says analysts RepuTex.
The suggestion came as the Energy Security Board was due to provide advice and modelling to the Turnbull government on the NEG, including electricity market and emission reduction target modelling.
The NEG will force energy companies to provide guarantees on reliability and emissions reduction.
The federal parliament is expected to legislate an emissions reduction target of 26 per cent on 2005 levels by 2030.
Energy companies will be able to buy carbon credit units to meet part of their emissions guarantee.
RepuTex said in a new energy and carbon market outlook the price of carbon offsets under the NEG may be as low as $5-$10 a tonne, with high emitting companies potentially able to source over one billion carbon offsets to help reduce emissions at "least-cost".
This is well under prices in international markets, with carbon prices in Europe and California forecast to grow to $40-$120 by 2030.
"The high forecast price of international credits provides important context for Australian companies, with domestic offsets likely to be cheaper" said RepuTex executive director Hugh Grossman.
However, the downside could be many of the cheap domestic credits being derived from projects with questionable emissions savings.
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