ID :
194321
Mon, 07/11/2011 - 17:47
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Shortlink :
https://oananews.org//node/194321
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Carbon tax boosts renewable energy stocks
Investors piled into carbon sequestration and renewable energy stocks in the wake of the carbon tax plan, while emissions-intensive sectors such as coal, steel and transport lost ground.
Shares in geothermal firms closed between 15 and 26 per cent higher after the federal government pledged, under the new tax, to establish two groups to administer $13.2 billion in investment in the renewables space.
Solar technology company Dyesol and wind farmer Infigen finished up 9.5 per cent and 5.4 per cent, respectively.
Carbon sink developers Carbon Conscious and CO2 Group ended almost 10 per cent stronger as investors bet on strong growth prospects for such companies under the government's scheme.
But those involved in transport were in negative territory after fuel tax credits were reduced for sectors excluding agriculture, fisheries and forestry industries.
Qantas said the carbon pricing scheme would have a cost impact on its business, including budget arm Jetstar, of about $110 million to $115 million in 2012/13 when an increase in aviation fuel excise will apply to domestic airlines.
International aviation fuel is excluded from the scheme.
"The transport sector is already running on knife-edge margins at the moment, and we question whether enough consideration has been given to the indirect impact the carbon price will have on operators and owners," said Dylan Byrne, carbon specialist and partner of accounting firm BDO.
Oil refiner and marketer Caltex vowed to continue its fight for 100 per cent compensation to offset the effect of the carbon pricing scheme.
It will receive transitional assistance of 94.5 per cent of the carbon price under the scheme, but says that needs to rise to 100 per cent so it can stay competitive internationally.
Steel makers OneSteel and BlueScope lost 4.9 and 6.6 per cent, respectively, after welcoming the government's $300 million, four-year transitional support package for the emissions-heavy industry.
OneSteel said the package substantially addressed the impacts of the carbon tax on its competitive position.
BlueScope said it dealt with the sector's concerns in a significant way for the first four years "if implemented as explained to us".
Both companies view the carbon tax as a big improvement on the previously proposed version, the Carbon Pollution Reduction Scheme (CPRS).
Previously, BlueScope said the CPRS would could cost it $500 million by 2020, while OneSteel said it threatened to derail its operations in South Australia and NSW.
Opposition Leader Tony Abbott dismissed the $300 million assistance package for steel makers as merely a "stay of execution" and flagged opposition to the measure if it needs parliamentary approval.
Ben Le Brun, market analyst for CMC Markets, said the carbon tax would dent steel makers' bottom line and could even force the closure of operations.
He said shares in BlueScope Steel and OneSteel gained some ground last week as investors believed the stock may be oversold.
The impact of the tax on steel makers had been largely factored in, so the losses on Monday weren't severe, Mr Le Brun said.
"At least now the uncertainty has been taken out," he told AAP.
He said mining stocks were hit hardest on Monday, in particular coal stocks, but other negative marco-economic data - higher than expected Chinese inflation figures and a weak US lead - had combined with the carbon tax to weigh on investor sentiment.
Mr Byrne said the carbon tax would not close low-cost mines run by most of the major producers, but could force them to review projects.
"Future investment and expansions may be done elsewhere," he said.
Shares in geothermal firms closed between 15 and 26 per cent higher after the federal government pledged, under the new tax, to establish two groups to administer $13.2 billion in investment in the renewables space.
Solar technology company Dyesol and wind farmer Infigen finished up 9.5 per cent and 5.4 per cent, respectively.
Carbon sink developers Carbon Conscious and CO2 Group ended almost 10 per cent stronger as investors bet on strong growth prospects for such companies under the government's scheme.
But those involved in transport were in negative territory after fuel tax credits were reduced for sectors excluding agriculture, fisheries and forestry industries.
Qantas said the carbon pricing scheme would have a cost impact on its business, including budget arm Jetstar, of about $110 million to $115 million in 2012/13 when an increase in aviation fuel excise will apply to domestic airlines.
International aviation fuel is excluded from the scheme.
"The transport sector is already running on knife-edge margins at the moment, and we question whether enough consideration has been given to the indirect impact the carbon price will have on operators and owners," said Dylan Byrne, carbon specialist and partner of accounting firm BDO.
Oil refiner and marketer Caltex vowed to continue its fight for 100 per cent compensation to offset the effect of the carbon pricing scheme.
It will receive transitional assistance of 94.5 per cent of the carbon price under the scheme, but says that needs to rise to 100 per cent so it can stay competitive internationally.
Steel makers OneSteel and BlueScope lost 4.9 and 6.6 per cent, respectively, after welcoming the government's $300 million, four-year transitional support package for the emissions-heavy industry.
OneSteel said the package substantially addressed the impacts of the carbon tax on its competitive position.
BlueScope said it dealt with the sector's concerns in a significant way for the first four years "if implemented as explained to us".
Both companies view the carbon tax as a big improvement on the previously proposed version, the Carbon Pollution Reduction Scheme (CPRS).
Previously, BlueScope said the CPRS would could cost it $500 million by 2020, while OneSteel said it threatened to derail its operations in South Australia and NSW.
Opposition Leader Tony Abbott dismissed the $300 million assistance package for steel makers as merely a "stay of execution" and flagged opposition to the measure if it needs parliamentary approval.
Ben Le Brun, market analyst for CMC Markets, said the carbon tax would dent steel makers' bottom line and could even force the closure of operations.
He said shares in BlueScope Steel and OneSteel gained some ground last week as investors believed the stock may be oversold.
The impact of the tax on steel makers had been largely factored in, so the losses on Monday weren't severe, Mr Le Brun said.
"At least now the uncertainty has been taken out," he told AAP.
He said mining stocks were hit hardest on Monday, in particular coal stocks, but other negative marco-economic data - higher than expected Chinese inflation figures and a weak US lead - had combined with the carbon tax to weigh on investor sentiment.
Mr Byrne said the carbon tax would not close low-cost mines run by most of the major producers, but could force them to review projects.
"Future investment and expansions may be done elsewhere," he said.
