1. Comply with the regulatory framework unique to emissions markets

1.1 Identify the domestic and international regulatory framework within which emissions reduction schemes are placed

1.2 Identify the key legislation, regulation and industry codes of practice relevant to operating within Australian emissions markets

1.3 Comply with relevant legal and regulatory principles when operating in emissions markets

1.4 Discuss regulatory risk for both voluntary and regulated emissions markets and determine possible impacts of pending regulatory or legislative change

2. Evaluate the scope and impact of the emissions market

2.1 Identify regulated and voluntary carbon markets and outline how they operate

2.2 Distinguish the respective supply and demand drivers for voluntary and regulated markets

2.3 Describe price drivers for emissions products

2.4 Differentiate participants in carbon markets and the motivations for their participation

2.5 Distinguish the functions of the primary and secondary emissions markets

2.6 Discuss auction types and processes

2.7 Describe the functions, requirements and rules for registries

3. Identify the types of emissions products, their characteristics and liabilities

3.1 Compare the different types of emissions products available of emissions instruments traded in the compliance and voluntary markets

3.2 Identify the key features of compliance market products

3.3 Describe the risks inherent within each product and their potential impact in a given context.

3.4 Describe transactional processes for each product, including acquiring, transferring and surrendering

3.5 Describe the tax treatment of emissions products, including deductibility of costs where relevant

4. Apply knowledge of emissions products

4.1 Determine relevant market information influencing the market

4.2 Analyse relevant information when selecting products for an emissions markets transaction

4.3 Devise strategies for using emissions market products

4.4 Seek advice and guidance of specialist expertise where required

4.5 Apply knowledge of financial market transactional processes when operating in emissions markets

4.6 Complete relevant documentation and complete any additional organisational processes

5. Maintain emissions market knowledge

5.1 Relevant emissions trading markets sources are reviewed regularly and any changes are applied in daily work

5.2 Maintain professional competence in market knowledge in accordance with codes of conduct and/or organisational requirements

5.2 Processes for maintaining up-to-date knowledge about relevant aspects of emissions trading markets are implemented

Required skills

communication skills to:

liaise with others, share information, seek advice and guidance

learning skills to maintain knowledge of changes to regulation, markets and emissions

research and analysis skills to:

identify economic influences, operations of emissions markets and characteristics of financial products traded in the regulated and voluntary markets

access and interpret legislation and regulation impacting on emissions markets and market operations

identify and interpret relevant information

analyse information and data relative to carbon markets

maintain currency of products and services knowledge

self-management skills to:

monitor and adapt to changes in compliance issues

Required knowledge

Understanding of the types of products and their characteristics:

analysis of the types of emissions units, and their characteristics (encompassing carbon units, Australian carbon credit units, and eligible international emissions units)

characteristics of emissions units including their status as personal property, and how they are typically derived from inception to the point of acquiring status as a financial product

risks associated with each type of emission unit, including rating, restrictions on their use, transfer, and bankability for future use

processes for acquiring, transferring and surrendering emissions units, including compliance with the requirements of the Australian National Registry of Emissions Units

Knowledge of the operation of regulated and voluntary carbon markets

geopolitical context of carbon markets including the influence of political and economic factors and corporate social responsibility

main participants in carbon markets, and their key objectives and participation behaviours as factors influencing market activity

emissions unit supply and demand factors and regulated price factors influencing market activity and prices

issue of carbon units via auction, and auction types

types of transactions in carbon markets, including transactions relating to the carbon pricing mechanism and in voluntary markets, and the function of financial markets facilitating such trading (including internationally)

potential trading strategies and their implementation in carbon markets (e.g. hedging and investment strategies)

risks associated with carbon markets, including liquidity, pricing, credit, operational, and regulatory risks

carbon market transaction documentation, including the types used for different types of counterparties and transactions, their key terms and conditions and advantages and disadvantages

Understanding of the regulated emissions legal environment—disclosure and compliance

domestic regulatory framework for the carbon pricing mechanism, including the role of the Clean Energy Regulator and the Australian National Registry of Emissions Units

domestic regulatory framework for the Carbon Farming Initiative, including the role of the Clean Energy Regulator and the Australian National Registry of Emissions Units

international regulatory framework for carbon trading, including the Clean Development Mechanism

relevant legal principles (e.g. Corporations Act, ASIC Act, Privacy Amendment (Private Sector) Act, Australian National Registry of Emissions Units Act 2011, National Greenhouse and Energy Reporting Act 2007, Carbon Credits (Carbon Farming Initiative) Act 2011, Clean Energy Act 2011)

the relationship between ethical and regulatory requirements (e.g. good faith, utmost good faith, full disclosure of remuneration/fees and any other conflicts of interest that may influence the adviser’s recommendation), and the application of these requirements in professional practice

relevant industry standards and codes of conduct

regulators’ guidelines, including our requirements in this policy

dispute resolution procedures (external and internal)

Understanding of the taxation obligations in the emissions market

taxation treatment of emissions units and taxation issues relating to emissions units

deductibility of costs associated with emissions units

Emissions markets include:

Domestic and international carbon markets

Voluntary markets

Compliance markets

Emissions products include:

carbon units (issued by the Clean Energy Regulator under the Clean Energy Act) (ACUs);

Australian carbon credit units (issued by the Clean Energy Regulatory under the Carbon Farming Initiative) (ACCUs); and

eligible international emissions units (EIEUs).

voluntary environmental schemes

Participants include:

Liable entities

Financial intermediaries

Carbon farming project proponents

Speculators

Transactional processes include

Acquiring emissions units

Transferring emissions units

Auction processes

Registry processes

Surrendering emissions units

Transaction documentation

Regulatory

Organisation

Exchange-required

Market information includes:

Economic statistics and data

Government policy changes

Trading data, including pricing, liquidity and limits (market and credit)

Market standards and conventions affecting transaction sizes

Emissions market transaction purpose includes:

Hedging

Acquitting liability

Trading

Advising

speculating