The federal government has moved fast to reassure farmers the generation of on-farm carbon credits through storing carbon in trees or reducing harmful greenhouse gas emissions remains a valuable and potentially lucrative source of income despite the imminent axing of the carbon tax. Source: The Australian
Incoming environment minister Greg Hunt said the Abbott government was intent on giving the rural sector more rather than less certainty about its ability to earn income from carbon farming.
Hunt said not only would the government encourage carbon farming and simplify “green” and red tape, but it also had allocated $1.55 billion in its first three years to its Emissions Reduction Fund, to buy stored carbon direct from farmers and for other low-cost emission abatement schemes.
Rural landholders have been moving towards investing in ways they can earn income from carbon credits generated through planting farm forestry lots, encouraging native vegetation regeneration, incorporating more carbon in their soils or collecting methane from piggery manure ponds — and selling them to private companies that need to offset greenhouse gas emissions.
However, the proposed abolition of the carbon tax has left many fearing the market for the purchase of credits and with it the Carbon Farming Initiative would disappear.
Banks have been reluctant to lend for carbon farming ventures or allow farmers to borrow against projected income, for fear the system would change under the Coalition government.
Hunt told The Australian in an exclusive interview nothing could be further from the Coalition’s mind.
“We don’t just like the Carbon Farming Initiative; we want to expand it,” Hunt said. “It’s the basis of our own initiatives. It is central to the delivery of our (new) Emissions Reduction Fund, even though the carbon tax will go.”
Hayley Purbrick, from the family’s Tahbilk winery at Nagambie in central Victoria, said she was delighted to hear carbon farming projects would still be encouraged.
The family had planted more than 100 hectares of native trees and scrub in shelterbelts and along waterways on the historic Chateau Tahbilk property fronting the Goulburn River in the past five years, in a bid to preserve a cooler microclimate and balance their own winery carbon emissions.
Another 140 hectares of native belts are planned, the aim to make their business “carbon-balanced” and earn additional income from selling carbon credits off-farm.
“Carbon farming has been an interesting experience,” Purbrick said. “The concepts are quite easy to grasp, but the way you calculate how much carbon as a company you are emitting and how much (the native plantings) are storing and how many carbon credits are being generated is quite difficult and can be expensive because you need outside consultants and auditors.
“One of the biggest problems is the government keeps changing the rules all the time; if the (Coalition) is going to support people to keep carbon farming they will need to be able show them the benefits of generating credits after the carbon tax has gone.”
Hunt maintains that the need for carbon farming remains strong.
“(Our focus is) direct action; the providing of incentives to those (companies) who reduce their CO2 emissions so (Australia) can reach its 5% greenhouse gas emissions reduction target by 2020.
“It will encompass projects that support the revegetation of our land; at its heart is the Emissions Reduction Fund to directly support emissions abatement; you could call it carbon or abatement buyback under the same structure that the government has used to voluntary buy back water in the water market to achieve environmental benefits.”
Hunt said any farmer who had planted trees or native vegetation belts on their properties or allowed native mulga and mallee scrub to regenerate to store carbon to be “sold” to companies to offset their own carbon pollution should not be worried about their potential source of income.
While prices for carbon would adjust to world levels, the $1.55 billion available from the buyback scheme as well as the presence of many companies committed to voluntarily purchasing carbon offsets would ensure returns from carbon farming remained profitable.
“There is a new option if you want to sell carbon stored on your farm now; you can sell it to the government — and an extra buyer in any market always means more competition and higher prices for any seller,” Hunt said.
