Carbon Tax Cheat Sheet
What is it?
The ‘Carbon Tax’ is a price on carbon set out by the Australian
Government which will mean a dollar value is put each tonne of
carbon dioxide equivalent (CO2e) emissions released through
human-related activities. Companies will have to pay for the right
to emit greenhouse gases into the atmosphere.
When DID it start?
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It was introduced on the 1 of July 2012. A few of years later, in 2015,
the ‘tax’ will change to a market-driven mechanism, also known as an
emissions trading scheme. At this time, the Government will set a cap
on how much we can pollute.
What will it do?
The Government says a price on carbon pollution will create a powerful incentive for
businesses across the economy to cut their pollution by investing in clean technology and
finding more efficient ways of operating. It says the tax will ensure that pollution is reduced
at the lowest cost to the economy.
The tax aims to cut emissions by
5% by 2020 and by 20% by 2050.
By 2020, that’s 159 million tonnes of CO2 – or the equivalent of taking
45 million cars off the road
Some say this is a weak target, others say it’s an important first step towards transitioning to a
Low Carbon Economy [visit www.lowcarboneconomy.com.au]
Who will pay the tax?
How much is the tax?
The 500 largest energy users or ‘polluters’ will be subject to the tax.
From 1 July 2012, a fixed carbon price will start at
They account for more than 60% of Australia’s climate change impact.
A carbon price will not apply to agricultural emissions or emissions from
light on-road vehicles. Farmers won’t have to pay it, but they will receive
incentives for every tonne of carbon they save from entering the
atmosphere. Of the 500 liable businesses, it is estimated that around:
135 operate solely in New South Wales and the ACT
110 operate solely in Queensland
85 solely in Victoria
75 solely in Western Australia
25 solely in South Australia
20 solely in Tasmania; and
10 solely in the Northern Territory.
a further 45 entities operate across multiple states.*
$23 a tonne,
for three years. This price per
tonne of carbon dioxide released into the
atmosphere will increase by 2.5 % each year until
July 1, 2015 when it will be set by the market under
an emissions trading scheme.
How will it affect us?
*These are estimates based on NGERs reporting requirements
Who are the largest energy users?
Of the 500 companies to pay the tax:
 100 are in coal or other mining
 60 are involved in electricity generation
 60 are involved in industrial processes (cement,
chemicals and metal processing)
 50 operate in a range of other fossil fuel intensive sectors
 40 are natural gas retailers and;
 the remaining 190 operate in the waste disposal sector
Who else in the world is doing this?
Other countries with a carbon tax include Finland, The
Netherlands, Denmark, Sweden, Switzerland, Ireland, Costa
Rica and India. The list of countries involved in an operating
emissions trading scheme is long and includes many European
Countries under the EU ETS as well as New Zealand, Republic
of Korea (trial) and ten of the United States under the Regional
Greenhouse Gas Initiative (RGGI).
Want to find out more?
The Federal Government has set up the website
www.cleanenergyregulator.gov.au offering more information. If you would like business
advice about developing a carbon management strategy to minimise risks and take
advantage of opportunities under the carbon tax, contact the Carbon Reduction Institute on
02 8228 7300 or visit www.noco2.com.au
Australian Bureau of Statistics show that there were
over 2 million actively trading businesses in Australia
in 2009 and of these only around 500 will be directly
liable under the carbon pricing mechanism.
This does not mean we won’t be affected. All
consumers and businesses are likely to be affected
by the carbon tax as the high energy users pass on
the cost of the tax down the chain. They will be
compensated through about $9.2 billion being made
available to ‘emissions intensive, trade exposed’
industries to help them make changes without losing
their competitive advantage. A $10 billion Clean
Energy Finance Corporation to fund new clean
energy technology has also been set up.
50% of the money raised from the tax will go back
to households in the form of compensation.
The average household costs rise will be about $9.90
per week and the average compensation directed
back to those households in the form of tax cuts and
other benefits will be worth $10.10. That means
households will, on average, be 20 cents better off
per week than before the carbon tax started.
9/10 households will get some assistance.