Carbon Price

The carbon tax came into effect on 1 July 2012

How will the carbon tax affect my small business?

Clean Energy Future (a federal government agency) has released a fact sheet to assist small businesses understand the impacts of the carbon tax.

Although small businesses will not have to directly pay the carbon tax or monitor their pollution and electricity use, they may be indirectly impacted by the carbon tax.

Consider your pricing structure to take into account possible business costs flowing from the carbon tax. If your prices increase as a result of the introduction of the carbon tax, clearly communicate this to your clients. However, if you start attributing price rises to the carbon price and they are not connected, you could be risking action by the ACCC. For example, injunctions to stop a business from making certain carbon price claims, or even penalties of up to $1.1 million for serious breaches of the Australian Consumer Law.

The ACCC 1300 303 609 Carbon Price Claims Hotline and form are for consumers and businesses to complain if they suspect false price claims are being made about the carbon price.

Refer to the ACCC’s website for guides and resources to help you with the carbon price.

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Some of the possible impacts of the carbon tax on small businesses include:

  • an increase in operating costs (e.g. electricity, gas);
  • an increase in workload and compliance burden.
    • Large businesses that are directly impacted by the carbon tax may introduce new trade policies, for example a policy that all business partners be low carbon emitters. In the case of supplying or servicing these businesses, smaller businesses may have to refine their systems, services and products in order to maintain their business relationship, which could lead to an increase in costs and compliance burdens.
    • In order to save money, small businesses may need to become more proactive when researching and monitoring the impact of the carbon tax on their business.
  • Changes in financial reporting requirements of the business.
  • An increase in “green tape” when dealing with governments, for example additional environmental regulations.
  • An increase in the compliance reporting and workload around tendering to private companies and government if new “green” requirements are introduced as a part of the tender processes.

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Federal government assistance for small businesses

The federal government is providing a range of assistance measures to small businesses as a part of its Clean Energy Future program. Some examples of the assistance include:

  • Increasing the instant asset write off to $6500 for businesses turning over less than $2 million a year.
  • Grants to businesses under the $40 million Energy Efficiency Information Grants Program (round one has closed already but check the website for future rounds).
  • $5 million has been allocated to enhance the clean technology aspects of existing Federal Government business development and facilitation programs, including Enterprise Connect.
  • The Clean Energy Technology Program provides grants for businesses and manufacturers to invest in energy efficiency initiatives (refer to the Clean Energy Finance Corporation website for more information).
  • Businesses can gain certification for carbon neutral business operations and products This allows certified businesses to use the National Carbon Offset Standard (NCOS) Carbon Neutral Certified logo for promotional and marketing purposes.

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Dealing with the carbon tax

How to deal with possible unexpected consequences of the carbon tax.

You can take a number of steps to prepare your business for the carbon tax, including:

Working out how the carbon tax will affect your business

  • Determine how the carbon tax will directly and indirectly impact on your business
  • Allocate one person in your business to the task of monitoring the impact of the carbon tax on your business.
  • Determine the true cost of using high energy consuming assets in your business – are they costing you more than what they are contributing?

Incorporate the carbon tax into your business planning

  • Tighten your credit management system to overcome possible delays in payment from your customers and business partners.
  • Factor in any potential price increases into your operational and expenditure budgets.
  • Consider your pricing structure to take into account any possible increases in business costs flowing from the carbon tax. If your prices increase as a result of the introduction of the carbon tax, clearly communicate this to your clients (but note the strict prohibitions against false carbon price claims).

Calculate your carbon emissions

Carbon Neutral's online calculator can be used to estimate most annual direct and indirect greenhouse gas emissions.

  • Calculate the carbon emissions of your business and set up processes in your business to monitor and reduce these emissions. This will assist you when you review your operations and business plans.
  • Be wary of companies trying to sell you products or services to reduce your carbon footprint – make sure they are accredited or at the very least reputable.
  • Properly research whether you actually need to purchase any goods or services to reduce your carbon emissions. The cost of these products or services may outweigh the benefit they bring to your business.
  • Research ways of reducing your carbon emissions. Do this on a regular basis and not just as a once-off.
  • Research the cost of getting a carbon emissions assessment and any products or services that claim to reduce your carbon footprint. Does the cost of this outweigh its benefits to your business in terms of reducing the impact of the carbon tax?
  • Some companies, such as the Carbon Reduction Institute provide a carbon tax calculator to assist households and businesses calculate their carbon emissions.

Talk to your customers and business partners

  • If you do business with a large company who will be directly affected by the carbon pricing scheme, discuss any cost projections they have undertaken for their business. This will give you an idea of any costs your business partners may be passing on which will assist you to make cost projections for your own business. For more information on who is liable to pay the carbon price see the Clean Energy Future fact sheet
  • Survey clients and suppliers about their views on the carbon tax and determine whether this will impact on their business with you.

Review your assets and contracts

  • Work out if you qualify for the federal government's $6,500 instant asset write off and if you do consider whether this will affect any plans to upgrade your plant and equipment.
  • Review your long term contracts to see whether you can increase the costs (if any) incurred as a result of the carbon tax.


  • Let clients know that the carbon footprint is important to your business and that you are taking steps to reduce it.
  • Include your business philosophy and the work you are doing to reduce your carbon emissions in your marketing material.
  • If you have to pass on costs to your clients then try to give your business a unique point of difference that will encourage repeat business from your customers.

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Tips for reducing your carbon emissions

There are a number of simple changes you can implement in your business to reduce energy use, limit your emissions and save money. For example:

  • Switch off lights, computers and other appliances that are not needed when the business is closed.
  • If you don’t use hot water frequently in your business then turn off the hot water system.
  • Become carbon neutral or sell carbon neutral products and services.
  • Replace existing lighting with LED lighting.

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What is the purpose of the carbon tax?

According to the Clean Energy Future website carbon pollution is the main cause of climate change. The Federal Government has introduced the carbon pricing scheme (e.g. the carbon tax) as a measure to reduce Australia’s level of carbon pollution. The aim is to reduce carbon emissions and improve energy efficiency.

The level of carbon emissions and greenhouse gas produced by a business is reflected by the size of their carbon footprint.

The carbon tax came into effect on 1 July 2012

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