It might be early days for carbon trading in Australia but many farmers and graziers are already trading or exploring how they can trade carbon.
In April 2015, the Clean Energy Regulator (CER) conducted the first “reverse” auction to buy carbon credits with the second auction being conducted in November 2015.
In a recent article by Thynne & Macartney it states while there are benefits, participating in the ERF and entering into a contract with the CER are not without risk.
There are a number of methods landholders and producers can implement to earn tradeable Australian Carbon Credit Units (ACCUs) including:
- Forest regeneration – the regeneration of native forests that have been suppressed by livestock or clearing.
- Avoided deforestation – the preservation of native forest previously approved for clearing (therefore avoiding the emissions that would have resulted from clearing).
- Savannah burning – fire management in the early dry season in northern savannas is aimed at reducing the incidence and extent of larger, higher intensity late dry season fires.
- Feeding nitrates to beef cattle – replacing urea lick blocks with nitrate lick blocks for pasture-fed beef cattle.
These auctions are funded by the Federal Government’s Emissions Reduction Fund (ERF). The ERF is a scheme designed to help Australia meet its emissions reduction targets. Through these two auctions the Federal Government has now committed $1.217 billion of the $2.55 billion set aside for the ERF.
The next auction is set for 27th and 28th April 2016 and a further auction set for the final quarter of 2016, now is the time to consider whether your business can benefit.
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