The Emissions Reduction Fund: Carbon Credits (Carbon Farming

17 February 2015
The Emissions Reduction Fund (ERF) is the centrepiece of the Government’s plan to achieve Australia’s
five per cent emissions reduction target by 2020. The Government is proposing a new set of rules to
support the operation of the ERF: the Carbon Credits (Carbon Farming Initiative) Rule 2015 (the Rule).
Public consultation on the exposure draft of the Rule was conducted from 5-19 December 2014.
The Government received nine submissions in response to the draft Rule.
The following is a summary of the key issues raised during the consultation process, and the
Government’s response.
Government programme requirement
The government programme requirement is an important part of the ERF additionality framework. It is
intended to ensure that emissions reductions are not paid for twice.
Under section 21 of the Rule, project proponents must choose whether to receive support from the
listed programmes or schemes, or from the ERF. Programmes listed in section 21 were identified as
those: providing upfront direct grant funding; having a significant overall programme funding allocation;
and supporting activities that are considered to substantially overlap with the Emissions Reduction
Fund, regardless of the objective of the programme.
The list in the exposure draft of the Rule consisted of two programmes: the 20 Million Trees Programme
(Australian Government) and the Waste Less, Recycle More Initiative (NSW Government).
The Government will continue to work with stakeholders on options for the potential listing of the
Waste Less, Recycle More initiative in section 21.
Fit and proper person test
Further clarity was sought on the operation of the fit and proper person test under Part 4 of the Rule.
This Part now allows the Clean Energy Regulator to consider additional events or behaviour that might
warrant the denial or removal of fit and proper person status, such as convictions under state work,
health and safety legislation, or general patterns of concerning behaviour.
Significant reversals relating to natural disturbances and/or conduct
The Government has removed the 50 hectare criteria under section 81 of the Rule, such that a reversal
from natural disturbances is considered to be significant if it only represents five per cent of the total
project area.
However, the requirement to notify the Clean Energy Regulator of disturbances that happen in five per
cent of the total project area will be retained for non-natural disturbances arising from conduct, under
section 82 of the Rule.