Creating opportunities in the land sector to cut pollution, while maintaining productivity and improving sustainability and resilience, is a key component of the Government's plan for a clean energy future.
The carbon price will not apply to agricultural and land sector emissions. This means that farmers will not have to pay for greenhouse gas emissions from agricultural activities, and the fuel they use for farm equipment and personal vehicles will not be covered by the carbon price. Further, over $1.7 billion of carbon price revenues will be invested in the land sector, through new funding programs to help farmers and land managers pursue climate change action and promote biodiversity.
This integrated land sector package creates economic rewards for farmers who reduce pollution or store carbon and will protect biodiverse carbon stores and secure environmental outcomes from carbon farming.
- The Carbon Farming Initiative (CFI) Administrator and the Australian National Registry of Emissions Units were established in December 2011. The Registry is a secure electronic system that tracks the location and ownership of carbon credits created through approved CFI projects and, in the future, carbon credit units issued under the carbon pricing mechanism.
- The Land Sector Carbon and Biodiversity Board, which provides advice on the implementation of the land sector package, was established in November 2011 and is meeting regularly.
- Applications were invited for round one of the Biodiversity Fund and over 1500 applications for funding were received.
- Up to $63.8 million has been approved under round one of the Carbon Farming Futures program.
- The Domestic Offsets Integrity Committee, an independent expert committee supporting the environmental integrity of carbon offsets generated under the CFI, was established in March 2012 and has held its first meeting. An interim committee operated in 2011.
Figure 6: Overview of land sector measures
Land Sector Carbon and Biodiversity Board
The independent Land Sector Carbon and Biodiversity Board, established under the Climate Change Authority Act 2011, is responsible for providing advice on the implementation of the land sector measures. The Board members are the Hon Bob Debus AM (Chair), Ms Anna Skarbek, Mr David Crombie, Mr Joe Ross and Professor Lesley Hughes. Key functions of the Board are to:
- report annually to Parliament about the progress of land sector and biodiversity measures;
- advise the relevant ministers on the implementation of the land sector measures;
- advise on the coordination of research to reduce duplication across the research community; and
- advise on key performance indicators for the land sector measures.
The Board also advises on guidelines for the priorities, streaming of funding and criteria for the Biodiversity Fund. The Board plays a key role in ensuring the Biodiversity Fund is well targeted and maximises the opportunities available.
The Board has met twice and has provided advice to the Government on a range of land sector matters, including round one applications under the Biodiversity Fund, delivery options for the Regional Natural Resource Management Planning for Climate Change Fund, and the design and operation of the Indigenous Carbon Farming Fund.
Carbon Farming Initiative
The Government's Carbon Farming Initiative (CFI) is a key program that provides economic rewards for farmers and landholders who take steps to reduce carbon pollution or store carbon on the land. Participation in the CFI is voluntary; farmers and landholders can choose whether or not to be involved. Those that do participate in the CFI may be eligible to receive carbon credits for the carbon pollution which can be reduced or stored on the land.
The CFI creates a new income stream for farmers, new jobs for rural and regional Australia and provides incentives to identify and implement low-cost methods of pollution reduction. Credits earned by farmers and land managers under the CFI can be sold to people and businesses to offset their emissions. The CFI also helps the environment by encouraging sustainable farming and providing a source of funding for landscape restoration projects. Legislation to underpin the CFI was passed by the Parliament on 23 August 2011. On 15 September 2011 the Carbon Credits (Carbon Farming Initiative) Act 2011 received royal assent. The CFI Administrator was established in December 2012 and is now operational. On 2 April 2012 the CFI Administrator was integrated with the Clean Energy Regulator.
The CFI Handbook, a practical guide to understanding and participating in the CFI, was released on 29 March 2012.
The Biodiversity Fund will invest $946.2 million over six years from 2011‑12 to help land managers store carbon, enhance biodiversity and build greater environmental resilience across the Australian landscape. To do this, it will fund eligible land managers for activities which restore, manage and better protect biodiversity on public and private land. It will also provide further support to land managers who wish to take advantage of emerging opportunities in the new carbon market. The Biodiversity Fund will provide support to establish new carbon stores or better manage carbon stores of existing native habitat.
The Biodiversity Fund will invest in three main areas:
- biodiverse plantings - funding will help land managers expand native habitat on their property through planting mixed vegetation species appropriate to the region. This will help build landscape resilience and connectivity;
- protecting and enhancing existing native vegetation - funding will support land managers to protect, manage and enhance existing native vegetation in high conservation areas on their land for its carbon storage and biodiversity benefits; and
- managing threats to biodiversity - funding will control the threat of invasive pests and weeds in a connected landscape.
Applications for round one of the Biodiversity Fund opened on 9 December 2011 and closed on 31 January 2012. 1530 applications were received and successful projects are expected to commence by 30 June 2012.
Carbon Farming Futures
The Carbon Farming Futures program will provide $430 million over six years from 2011‑12 to reduce emissions from, and maintain the productivity of, the land sector through improved management practices and on-farm application of abatement technologies.
These advances will allow farmers and other landholders to benefit from the economic opportunities of the CFI while assisting Australia in achieving its long term emissions reduction targets.
Farmers will be provided with the tools to generate carbon credits and benefit from carbon farming. Funding will be provided through five components.
Filling the Research Gap
This program will invest $201.3 million to support research into emerging abatement technologies, strategies and innovative management practices that reduce greenhouse gas emissions from the land sector, sequester carbon and improve sustainable agricultural practices.
Filling the Research Gap is building on research undertaken through the Climate Change Research Program. Projects will target current research gaps around abatement technologies and practices. Current research priorities are: reducing methane emissions; reducing nitrous oxide emissions; sequestering carbon in soil; and improving modelling capability. Research outcomes will underpin the development of new abatement methodologies that land managers can use to participate in the CFI.
Up to $46.5 million has been approved under round one of the Filling the Research Gap Program.
The $20 million Methodology Development program will convert research, including outcomes from Filling the Research Gap and the Climate Change Research Program, into estimation methodologies to use in the CFI.
To ensure the integrity of the CFI and the ongoing value of credits generated, abatement projects need to meet scheme eligibility criteria and use an approved methodology. This program will expand abatement opportunities under the CFI by facilitating the development of methodologies that comply with CFI requirements, meet the needs of agricultural industries and rural and indigenous communities, and are supported by scientific evidence.
The Domestic Offsets Integrity Committee is responsible for assessing and providing advice to the Government on methodology proposals for use under the CFI.
Action on the Ground
Action on the Ground will invest up to $99.3 million of competitive grant funding in on-farm projects. It is designed to enable on-farm trial and demonstration of practices and abatement technologies to reduce agricultural greenhouse gas emissions and increase carbon sequestered in soil.
Action on the Ground projects will create new opportunities for landholders and farmers to participate in the CFI by trialling and demonstrating outcomes from research programs, including the Climate Change Research Program and the Filling the Research Gap program. Projects under Action on the Ground will ensure that research results can be practically applied on the ground in real farming situations.
Up to $17.3 million has been approved under round one of the Action on the Ground Program.
The Action on the Ground program also includes a refundable tax offset to encourage primary producers to adopt conservation tillage practices.
Primary producers will be able to claim a 15 per cent refundable tax offset for new eligible conservation tillage equipment installed and ready for use between 1 July 2012 and 30 June 2015. In order to apply for the offset primary producers must first complete a conservation tillage survey with the Department of Agriculture, Fisheries and Forestry. Legislation to implement the refundable tax offset was passed as part of the Clean Energy (Consequential Amendments) Act 2011.
Extension and Outreach
The $64.4 million Extension and Outreach program will invest in coordinated communication activities to provide technical information and support for farmers and other land managers so they can benefit from carbon farming.
Extension and Outreach activities will motivate landholders to explore opportunities to participate in the CFI. Extension officers will provide technical information and support to landholders about: integrating carbon management into farm planning; new research and farm techniques suitable for the property and farm business; and the productivity and environmental benefits of carbon farming.
This program builds on the $4 million the Government is investing in the CFI Communications Program which is providing farmers and land managers with credible, clear and consistent information on the CFI.
Carbon Farming Initiative (Non-Kyoto Fund)
Under the non-Kyoto fund, the Government will purchase non-Kyoto compliant CFI credits that cannot be purchased by companies to offset liabilities they may have under the carbon pricing mechanism. This program will increase incentives for activities that are not counted towards Australia's emissions target under current international carbon accounting rules. Such activities include the storing of soil carbon, revegetation and forest conservation projects.
The Fund will commence on 1 July 2013, with funding of $250 million over six years.
Regional Natural Resource Management Planning for Climate Change Fund
The Government is providing $44 million over five years from 2011‑12 to help regional natural resource management (NRM) organisations incorporate the impact of climate change on the land in their regional NRM plans and develop scenarios of climate change impacts at a regional level.
The updated regional plans will provide a guide for finding the most appropriate locations for new projects to store carbon or to build connectivity in the landscape. This will help to maximise the benefits from carbon farming and biodiversity projects. The fund is divided into two streams:
- Stream 1 will provide $28.9 million over five years to support the 56 regional NRM organisations revise existing regional NRM plans to help identify where, in the landscape, carbon plantings, revegetation, restoration and other CFI mitigation activities should be undertaken.
- Stream 2 will provide $15 million over four years to support information delivery, research and analysis to develop scenarios on regional climate change impacts which can be used for natural resource management and land use planning.
Indigenous Carbon Farming Fund
The Indigenous Carbon Farming Fund ($22.3 million over five years from 2012‑13) will provide support to Indigenous Australians to participate in the CFI. The Indigenous Carbon Farming Fund comprises two streams:
- a research and development stream ($5.2 million over five years from 2012‑13) will provide funding for research and reporting tools for CFI methodologies. This funding will be directed towards low-cost methodologies likely to have high Indigenous participation to help create real and lasting opportunities for Indigenous Australians; and
- a capacity building and business support stream ($17.1 million over five years from 2012‑13) will help Indigenous communities establish or participate in carbon farming projects.
The Indigenous Carbon Farming Fund will assist Indigenous landholders and land managers to earn credits under the CFI by undertaking projects to reduce emissions or store carbon.
Carbon Farming Skills
The Carbon Farming Skills program ($4.2 million over five years from 2011‑12) will ensure that landholders have access to credible, high quality advice and carbon services. This measure will fund:
- development of a new nationally accredited qualification for carbon service providers; and
- an accreditation scheme for carbon service providers operating under the CFI.
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