1. The Carbon Tax and
its Impact on the
Retail Industry
RPCON 2012. Presented by Peter Ramsay
What does it mean for my
business?

2. The Carbon Tax-An Overview
• 8 November 2011 Parliament passed the Clean Energy
Act
• Legislates the charging of a Carbon Tax
• From 1 July 2012, large emitters are subject to the Tax
• Price of emissions fixed at $23/tonne CO2-e for three
years, then carbon emissions capped and price set by
market

3. Who is liable for the carbon tax?
• Direct emitters (on–site) > 25,000 tonnes per year
• Approximately 500 companies in Australia are
expected to be subject to the tax
Waste Disposal (Landfills) Industrial
Mining (not coal) Transport: rail, aviation,
shipping, onsite transport (e.g.
mining)
Electricity Generators Natural gas suppliers

4. Retail Industry not directly taxed, BUT
• Electricity generators will need to pay the carbon
tax, and this cost will be passed on to consumers:
higher electrical costs and/or higher rents
• Transport Industry will pass on carbon tax to
customers
• Manufacturing Industry will pass on increases in
manufacturing costs to customers
• Entire supply chain will be impacted

5. • Myer has said it expects its costs to increase by up
to $6M/year
• Not so clear the impact on small businesses
• An article in the Sydney Morning Herald March
17-18 quotes the case of Garden City Plastics - a
Victorian manufacturer of recyclable garden pots is
claimed to be facing a $120K/year increase in
electrical costs. This can be recouped by increasing
prices 0.24%.

6. What can you do to minimise your
liability?
• Reduce electricity costs by increasing energy
efficiency
• Reduce transport costs
• Landlord lease agreements
• Reduce waste
• Government incentives and programs

7. Energy Efficiency
• Consider installing LED lighting, and sensor lighting
• Largest energy savings are in upgrading
heating/cooling systems and refrigeration
• Increase the energy efficiency of the building or
move to a more energy efficient building(some
cases see annual savings of $100K-$200K and
payback within a year)

8. Energy Efficiency (continued)
• Woolworths and Coles installed energy efficient
lighting and refrigeration
• Another retailer installed solar panels at a
distribution centre.

9. Transport Costs
• Trucking industry is exempt from the carbon tax until
July 2014 – keep this in mind when negotiating long
term transport contracts
• Prudent to revisit service contracts for logistics
operations

10. Rental Costs
• Westfield, Stockland, Centro, AMD etc expect
retailers to contribute to costs of air conditioning,
cleaning and electricity in shopping centres: clauses
in leases pass increased costs onto tenants
• Talk/negotiate with the landlord regarding whether
there are rewards for increasing energy efficiency
• Negotiate having a “green lease”

11. Government Initiatives/programs
• Businesses < 2M turnover per year: Instant asset
threshold has been increased from $5k to 6.5k per
year for depreciable assets
• Investigate joining the City/Switch program
• NSW: Energy Savings Certificates (ESCs) can be
created by cutting energy use and then sold to
electricity retailers (www.ess.nsw.gov.au)

12. Government Initiatives/programs
• Small businesses (up to $40K/annum in electrical
bills and <11 full time employees) are entitled to a
50% rebate on an energy assessment

13. Summary
• Carbon tax starting 1 July 2012
• Retail industry will not directly pay the carbon tax, but
will be pay indirectly throughout entire supply chain.
• Not clear what the impact will be, but it is prudent to
investigate cost effective ways to reduce projected
increased costs (e.g. energy efficiency, transport
etc.)