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Unlocking 100 million trees with the Emissions Reduction Fund

Southern Tasmania, Gippsland, the Victorian side of the Green Triangle and Kangaroo Island can now participate in the Emissions Reduction Fund with the Federal Government yesterday removing the highly contested rainfall regulation, known as the ‘water rule’. Source: Timberbiz

In July 2020, the Government simplified access to carbon funding for forestry projects across five plantation growth regions.

Under that announcement, areas below 600mm rainfall were eligible for a variety of carbon farming initiatives, as outlined in the federal governments Carbon Farming Initiative (CFI). Areas with above 600mm rainfall were only eligible for high biodiversity revegetation projects and excluded Southern Tasmania, Gippsland, the Victorian side of the Green Triangle and Kangaroo Island.

AFPA CEO Ross Hampton said the decision could unlock up to 100 million trees over the next decade.

“These very welcome changes mean that landowners in western Victoria, Gippsland and southern Tasmania with an interest in diversifying into tree crops on more marginal land, will be eligible for carbon credits under the ERF and the voluntary carbon market,” he said.

The AFPA forecasts this will contribute significantly towards the Government’s One Billion Trees plan and is a vital step towards meeting future housing timber needs.

“Importantly the trees will be planted close to processing centres such as sawmills and pulp and paper manufacturing plants, meaning the timber will be accessible when the trees are ready for harvest and ensuring the landowner has an ever-appreciating asset,” Mr Hampton said.

“Industry has estimated that, if we are to have the timber we need for our homes, in ten years the nation needs to fast track the planting of another 400,000 hectares of plantations around the country. That would move us from about two million hectares of plantations to some 2.4 million hectares. As we have about 380 million hectares of agricultural land, this will be a very small change in land use.”

Mr Hampton said the AFPA would continue to work with the Federal Government to ensure that the five remaining Regional Forestry Hubs which as yet do not have the same access to carbon markets – in Central NSW, Northern and Southern Queensland, Southern NSW, and Northern Territory – are quickly given the same opportunities.

The Tasmanian Forest Products Association CEO Nick Steel said the decision could result in an additional 30 million new trees being planted over the next decade.

“These very welcome changes mean that landowners in southern Tasmania, with an interest in diversifying into tree crops, will be eligible for carbon credits under the Emissions Reduction Fund and the voluntary carbon market,” he said.

“We commend the Tasmanian Farmers and Graziers Association who have supported these changes resulting in the opportunity to expanding plantation estates in the south, assist farmers to maximise the use of their land, increase out sovereign timber capability and offer net zero solutions to farmers and landowners.”

VFPA CEO Deb Kerr said that until now only Victoria’s Northeast was exempt from the contested water rule.

“The regulation was not only inherently unfair towards forestry compared with the environmental and carbon plantings,” she said.

“It also defied any logic and science. The Federal Government has committed to planting one billion trees by 2030. For that to happen, the right kind of trees need to be planted at scale in the right areas, and not somewhere where there is so little rainfall that they basically can’t grow,” Ms Kerr said.

“(The) announcement means that our Victorian growers can start planning to expand our plantation estate in the Green Triangle and Gippsland. It’s also important to understand that around half the area is simply replanting the estate lost to other uses or fire over the last decade.

“We commend Victoria’s Minister for Agriculture Mary-Anne Thomas who stood alongside our plantation industry and drove this issue on a federal level.

“The decision is an important milestone for forestry – we can finally get underway with planting much-needed trees. Every dollar invested in plantations and every tree put in the ground and harvested is part of the climate solution,” Ms Kerr said.

Industry, Energy and Emissions Reduction Minister Angus Taylor said sustainable forestry would be an important source of offsets in the decades ahead, helping Australia meet and beat its emissions reduction targets while growing a strong economy.

“It’s important to recognise that our goal is net zero, not absolute zero emissions,” Mr Taylor said.

“While technology will bring down emissions across many sectors, there will still be greenhouse gas emissions in 2050 and beyond.

“That’s why the Morrison Government is focused on expanding the supply of low cost, high integrity offsets available under the Emissions Reduction Fund, through soil carbon, forestry and other initiatives,” he said.

“Expanding supply will give Australian businesses and customers the option to offset their emissions where it makes sense for them to do so.

“Since 2014, the ERF has committed $2.2 billion to projects in regional and rural areas, with more funding available through the $2 billion Climate Solutions Fund.”

The Federal Member for Wannon which covers the Green Triangle, Dan Tehan, welcomed the announcement.

“Sustainable forestry has been bringing down emissions for decades,” Mr Tehan said.

“Wannon has a proud history of timber production, it’s fantastic that these plantation and farm forestry projects can now be recognised for their vital role through the ERF.”

Assistant Minister for Forestry and Fisheries Jonno Duniam said the Government was committed to growing the plantation estate and supporting forestry jobs by enabling the sector to participate in the ERF.

“As we all know, timber is the ultimate renewable resource and forestry presents a huge opportunity for low-cost carbon abatement that is productive, and delivers an economic return to the investor,” Senator Duniam said.

“Opening up these new regions will give foresters an additional revenue stream option, increase returns and incentivise investment in new plantation development.

“Unlocking key forestry regions for ERF participation is a key component of our National Forest Industries Plan, and we are delivering.”

The Federal Member for Gippsland Darren Chester also welcomed the announcement.

“Our region has a proud heritage in timber production and a great future in sustainable environmental projects of this nature,” Mr Chester said.

“I look forward to working with Gippslanders and the Federal Government to deliver local benefits under this program.”

The Clean Energy Regulator, which manages the ERF, expects a record of 17 million tonnes of abatement to be credited this year. This year, the ERF hit a milestone of 100 million carbon credits issued, making it one of the world’s largest offset schemes.

The CER will shortly begin consultation on a new plantation forestry method, which is due to be finalised before the end of the year. The new method is expected to further simplify access to carbon funding for forestry projects.