State and Federal MPs have poured cold water on Member for Mount Gambier Troy Bell’s push to lease carbon credits generated from the South East plantation estate to commercial entities, describing the value as minimal. Source: The Border Watch
The independent MP has suggested the State Government could earn revenue by leasing the carbon rights of the South East forest – which are still owned by the State Government – to businesses wishing to offset carbon footprints.
Primary Industries and Regional Development Minister David Basham and Federal Member for Barker Tony Pasin struck down the move, with the pair saying the value of the estate’s carbon credits were best described as minimal.
Mr Basham said the OneFortyOne Plantations-leased forestry estate had minimal carbon credits as the asset pre-existed the baseline period, which was used to establish Australia’s original carbon position.
He said replanted softwood plantations within the existing South East forestry estate are not eligible for carbon credits as the asset was regarded to be a re-establishment of existing forest cover rather than a new plantation.
“Carbon credits are generally earnt through creation of new activities creating carbon stores,” Mr Basham said.
“Given the estate was regarded as fully planted at the time of the sale, the cost to the State Government of calculating and applying for any benefits under the Emissions Reduction Fund would outweigh any potential financial benefit.
“The government’s understanding is the value of the South East forestry estate resides in the trees themselves as a source of timber.”
Mr Pasin backed the minister’s comments, saying carbon credits will only arise in a plantation setting if the forest owner can establish ‘additionality’ above the baseline.
“The value of carbon sequestered in the approximately 80,000ha plantation acquired byOneFortyOne in 2012 was included in the baseline calculations used to establish our nation’s original carbon position,” he said.
“Whilst the South Australian State Government has retained the rights to the estate’s ‘carbon credits’ I agree with Minister Basham that the value of the same at present are at best described as minimal.”
At last week’s parliamentary forestry industry inquiry, Mr Bell questioned why the State Government was not capitalising on carbon credits given the emerging carbon offset market.
“If we look at carbon price, it’s going up around the world – New Zealand is $46 a ton neat the moment and it’s estimated to go up to $140 a tonne by 2030,” Mr Bell said.
“In the European Union it’s $90, Switzerland it’s $140 a tonne and in Australia it’s $23 a tonne.
“There is no doubt the price of carbon will increase into the future and I don’t know wh ythe State Government is not maximising that return.
“[I don’t know] why the State Government hasn’t registered those and leasing it at $23 a tonne over the thousands and thousands of acres of trees down here.”
Mr Bell told the committee that he had discussions with Mr Basham and Premier Steven Marshall seeking an explanation as to why carbon credits had not been registered, but had yet to receive an answer.
“I’m not a carbon farming expert, there may be reasons why that hasn’t happened, but no one has been able to give me one just yet,” he said.
Mr Bell raised concerns the State Government was looking to offload the carbon rights, but Mr Basham said he was not aware of any approaches to government to purchase whatever carbon rights may exist.