Removal of water rule for forest carbon credit projects

Dept of Climate Change, Energy, Environment & Water

The Australian Government has removed the ‘water rule’ from the Carbon Credits (Carbon Farming Initiative) Rule 2015 (CFI Rule) under the Australian Carbon Credit Unit (ACCU) Scheme from 1 June 2024.

The ‘water rule’ refers to added conditions that plantation forestry and other tree planting projects in high rainfall locations need to meet to participate in the ACCU Scheme.

This amendment supports carbon farming opportunities for plantation growers and farm foresters.

During this transition, applications to register new plantation and tree planting ACCU projects in high rainfall areas can now be made to the Clean Energy Regulator and will not be subject to the ‘water rule’, if they do not start before 1 June 2024.

The government has also approved four new specified regions where tree planting is unlikely to impact water availability in:

  • South and Central Queensland
  • North Queensland
  • Northern Territory and Ord Valley
  • South-East New South Wales.

In the period before 1 June 2024, new plantation and other tree planting ACCU projects can meet the water rule by being in any of the 11 specified regions. The removal of the ‘water rule’ follows public consultation and consultations with state and territory governments.

All ACCU projects must still follow relevant state or territory government rules and regulations.

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