Emissions Trading

In: Business and Management

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Macquarie University
Master of Applied Finance

Emissions Trading
Assignment 2

Prepared by: Wayne Andrews

Student number: 41712986

September 2011

Subject Number : ECFS905 Lecturer : Julian Turecek Class : Sydney P. T.

Company Selection
Select an ASX200 company that is expected to have a carbon exposure equal to or greater than 2% of EBITDA at a $23/t carbon price.

Question 1
Determine the company’s carbon exposure, including direct (Scope 1) and indirect (Scope 2) emissions and establish that its exposure is greater than 2%.

The following table summarises Onesteel’s actual and estimated for FY10, FY11 and FY12 emissions and imputed carbon cost under the currently proposed Carbon Tax, relative to reported EBITDA.

Table 1 – Implied impact of carbon pricing imputed to 2010 results

| Company Guidance | Fixed Price imputed for comparison | Fiscal year commencing | FY10 | FY10 | FY11 | FY12 | Carbon Price (FY10/11 theoretical) | 23.0 | 23.0 | 23.0 | 23.0 | EITE Assistance Rate | 94.5% | 94.5% | 94.5% | 94.5% | EBIT DA $Mil | 619.0 | 619.0 | 638.0 | 717.6 | Type 1 Emissions | 2.55 | 2.55 | 2.66 | 3.05 | Type 2 Emissions | 1.34 | 1.34 | 1.40 | 1.60 | Total Emissions Type 1 & 2 MtCo2e | 3.89 | 3.89 | 4.06 | 4.65 | Steel Emissions Eligible for EITE | 3.44 | 3.44 | 3.59 | 4.18 | CO2e reductions Whyalla MtCo2e | - | 0.0 | (0.3) | (0.3) | Emissions Savings Whyalla A$mil | - | 0.0 | (6.9) | (6.9) | Gross Emissions…...

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