Which Stocks are Affected by the Carbon Tax?

Submitted by Share Trading on 21 July, 2011 - 13:56

Australian Carbon Tax Affect on Stocks and the Stock Market

On Sunday July 10th this year, the Australian Labor Gillard Government announced a new carbon tax to be levied on the top 500 polluters in Australia. The companies would be taxed at $23 per metric tonne of carbon emissions starting at the beginning of the 2012-2013 financial year, July 1, 2012. The release of the news of the carbon tax has certainly affected stock prices across the Australian stock market and may affect your share trading. It may be a good idea to keep track of the clean technology companies and the renewable energy companies listed in the Australian share market.

Stocks Affected By the Carbon Tax

The stocks affected and hardest hit are those companies which have an energy intensive element in their product or service. Think steel production, energy generation and transport. For example, coal is used to generate over 80 percent of electricity in Australia, hence companies in the coal industry like Macarthur Coal (ASX:MCC) are affected.

In the transport front, the carbon tax will affect airline companies like Qantas (ASX:QAN) and Virgin Australia (ASX:VBA) and in the freight transportation business, companies like Toll Holdings (ASX:TOL) and QR National (ASX:QRN) are affected.

Lots of energy is required in processing steel, hence companies in the steel industry are also affected: such as BlueScope Steel (BSL) and OneSteel Limited (ASX:OST).

Other industries are also affected to some extent. Retailers like Myer, David Jones, Harvey Norman would likely pay more electricity bills but no details or forecasts have yet been published. Wesfarmers (which own Coles and Bunnings) will be affected more so than other retailers since they also own chemicals and coal companies. Don't forget property companies like Westfield, Stockland and Mirvac. Tech and Information Technology companies like Telstra and Macquarie Telecom which run data centre infrastructure require many megawatts of power to run. Then there is the mining industry which include BHP Billiton and Rio Tinto and gas companies like Woodside Petroleum, Santos and Origin Energy to consider. Contruction and building material companies like Boral and Adelaide Brighton are also impacted.

With lots of forecasts being thrown around at the moment, and the government playing down the effects of the tax to the public hip pocket, it is difficult to determine the overall financial impact of the new tax.

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