Real carbon readiness lacking – Energetics, AGL

Most large Australian companies are yet to get on top of the data collection, risk analysis and investment opportunities to be presented by the federal government’s Carbon Pollution Reduction Scheme (CPRS), said leading sustainability consultant Jon Jutsen.

The Energetics founder, whose clients include a large component of ASX 200 companies, cites a combination of the size of the challenge, lack of readiness and strategy, combined with a shortage of specialized skills to explain the shortfall.

Speaking at Ethical Investor’s Carbon Solutions Forum in Sydney last week, Jutsen first outlined that Australia’s greenhouse challenge is significant because of its large projected increase in energy consumption. He believes that if the CPRS were unconstrained, then Australia would have a higher carbon price as a result. This means that the risks imposed by a capped CPRS could be severe.

“Business needs to look at the potential for stranded assets,” he said, citing as an example a coal-fired power plant located within a distributed generation environment.

On carbon compliance, Jutsen says that the National Greenhouse Energy Reporting System (NGERS), which came into effect from 1 July for 1,000 large energy users, is “highly demanding”.

He believes that a lot of reporting companies were still not capturing their emissions data, or do not understand the boundaries of data they need to gather.

A further demand is that their first report under NGERS requires external assurance. Companies also need assistance in building skills in this area, he said.

On strategy, Jutsen believes that while carbon risk is “now dawning” on companies, they generally have a low understanding of the opportunities available for their core business.

Jutsen’s belief, which was echoed by a few other speakers at the forum, is that the government will implementation of the emissions trading scheme on schedule in 2010.

“But if there is a recession, they could fix the carbon price in the short-term”.

These sentiments were echoed by AGL’s general manager, major customers, Scott Thomas who, as a supplier to big business, is in a similar position to comment on its readiness foe the CPRS.

Thomas said that NGERS reporting requirements are more robust than any previous energy reporting requirements and are similar to financial reporting standards. He also cites a skills shortage in the energy efficiency industry and on the question of readiness he says that only 30 per cent of his customers have (meaningful) energy efficiency practices and that percentage has been stable for several years.