Following the repeal of the carbon tax, the ACCC has issued over 250 carbon tax removal substantiation notices to businesses that retail electricity and natural gas, produce electricity or bulk import synthetic greenhouse gases.  The businesses must provide a carbon tax removal substantiation statement to the ACCC and publish these on their websites until 30 June 2015.

On 29 July 2014, the ACCC released its second carbon monitoring report. 

Based on responses to voluntary information requests issued during the March and June quarters, the ACCC has prioritised industries according to the level of ACCC scrutiny they are expected to attract:

  • Tier 1 – industries that supply regulated goods and in which the effects of the carbon tax are likely to be complex, being wholesale and retail electricity, natural gas and synthetic greenhouse gas; 
  • Tier 2 – industries that do not supply regulated goods but include liable entities and additional entities for which the effect of the carbon tax are mixed (for example, some entities may have passed through the carbon tax but others did not), including paper, glass and plastic, construction materials, high technology and transport; and
  • Tier 3 – industries consisting of liable entities and additional entities in which the effects of the carbon tax were non-complex or the costs of the carbon tax were absorbed (for example, metals, retail property and prepared food).  These entities are unlikely to receive further information requests. 

The report identified a number of complexities, including:

  • the retrospective effect of the carbon tax repeal legislation which was passed on 17 July 2014 operates from 1 July 2014.  Electricity and gas suppliers may continue to pass through carbon tax costs after 1 July 2014, making a windfall gain unless credits or rebates are provided to customers; 
  • the method for the calculation of savings in the electricity market, specifically the impact of the carbon tax on prices paid for hedging contracts, the development of “carbon inclusive” contracts between energy retailers and commercial and industrial customers, and the joint impact of the carbon tax and network costs on retail electricity prices; and
  • the price exploitation prohibition requires suppliers of regulated goods to pass through all cost savings that are directly or indirectly attributable to the carbon tax repeal.  The monitoring report notes that businesses have adopted varying interpretations of costs that are “indirectly attributable” to the carbon tax repeal.  For example, some businesses factored in the costs of their employees’ time and others did not.