CMI welcomes the announcement today by the Australian Government, of five new Emissions Reduction Fund (ERF) method priorities for 2022. CMI notes in particular, its support for two land-based priorities – an ‘integrated farm method’ that will allow multiple ERF land-based activities to be combined on one property; and improvement of Savanna fire management methods, including the update of carbon accounting, and expansion of carbon pools and vegetation types covered.
This announcement marks the first time since the implementation of the Carbon Farming Initiative Act (2011) that emissions reduction methods have been designed in consultation with industry. Other new methods prioritised include those crediting emissions reductions from electric vehicle and hydrogen refuelling infrastructure; injection of clean hydrogen into the gas network, and the use of hydrogen in electricity generation or other uses, such as low carbon steel; and carbon capture use and storage (CCUS), including in the production of industrial and building materials like insulation or concrete.
These new priorities come at a critical inflection time for the industry as Australia celebrates key carbon market milestones this year: the 1000th registered emission reduction project; 100 million Australian Carbon Credit Units issued by the Clean Energy Regulator; and the tenth anniversary of the Carbon Farming Initiative Act.
“The new priorities announced today represent a real opportunity to enhance the scope and impact of Australia’s carbon reduction crediting scheme, opening it up to a range of new activities, participants and investment opportunities for our decarbonising economy,” says John Connor, Chief Executive Officer of the Carbon Market Institute.
The integrated farm method is representative of an Agricultural Land Management and Production Method blueprint, that was developed by CMI’s Landscape Taskforce, and submitted into the 2022 method prioritisation process.
“The carbon industry is excited by the focus on a new integrated farm method and expansion of the savanna fire management method, which represent important opportunities for landholders, farmers and traditional owners across the country.”
“CMI’s Landscape Taskforce estimates that a new integrated farm method could result in more than 5000 new projects across 65 million hectares, generating more than 2.5 billion ACCUs worth $50 billion to the Australian economy.”
“These priorities align with the goals of the Australian Carbon Farming Industry Roadmap, and will enable the industry to further support real, practical and meaningful climate actions that generate a range of economic, social, cultural and environmental benefits.”
“We’re also interested to see the Government confirm ongoing investigation in the research and technical development of agricultural waste as feedstock, livestock feed technologies to reduce emissions, and direct air capture technologies”.
“We note with interest the hydrogen, CCUS and transport priorities and look forward to increased industrial opportunities. The devil will be in the detail to see how these can be built in a way that incentivises industrial uptake at scale, remains additional to business-as-usual activities, and can be supported by other climate policy initiatives. CCUS can be important for high emissions industries including steel, cement and oil and gas but we should avoid perverse outcomes where such activities prolong due or scheduled closure of older, high emissions-generating power or industrial facilities.
CMI also notes the confirmation of finalisation of the 2020 CCS method priority, also announced today. This along with existing methods, and new 2022 method priorities will enable expanded creation of new Australian Carbon Credit Units, which can be used within the Emissions Reduction Fund, for Safeguard Mechanism compliance, and by an ever-increasing number of voluntary market participants for contribution towards net-zero targets and carbon neutral goals.
CMI remains supportive of the Government implementing a long-term target of net-zero emissions by 2050, 50% reductions by 2030 and a more focused policy suite that includes declining Safeguard Mechanism baselines over time, and complementary transport policies as outlined by a recent Grattan Institute report.
