Carbon market undermines Perth recycling

Ratepayers in Perth's southern suburbs are counting the cost of the collapse of the federal government's Greenhouse Friendly voluntary carbon offsets trading scheme.

The Southern Metropolitan Regional Council (SMRC) has an approximate $800,000 budget hole for its organic waste composting facility because the carbon credits it put up for auction in June failed to gain a response.

The $100 million Regional Resource Recovery Centre takes household waste from over 380,000 residents and produces high quality compost. The process avoids the methane emissions that would have otherwise been generated by placing organic material into landfill. It is accredited as a carbon offset under the government's scheme.

In a similar auction last year, SMRC could not meet demand for its offsets. Sale prices then ranged between $16-20 per unit.

But of the 90,000 tonnes of carbon dioxide equivalent it put up for auction in June it received tenders for only a quarter of the volume. The price dropped 50% to $8-10 each.

The federal government has now closed Greenhouse Friendly for new registrations and the program is due to end in June 2010. However, the July 7 Inside Waste said the scheme may be extended until the start-date of the government's proposed Carbon Pollution Reduction Scheme in June 2011.

However, SMRC's business development manager Tim Youe told Inside Waste market demand for the carbon offsets "has all but disappeared".

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