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RIO TINTO, Woodside and other major emitters are putting pressure on the federal government to change the rules for its agricultural carbon credit scheme to make it easier for them to meet their future carbon liabilities.
Under draft legislation for the government’s carbon farming initiative (CFI), farmers, forest growers and land-holders will be able to earn credits they can sell locally and internationally for activities that increase carbon sequestration.
But in submissions to the Department of Climate Change, companies including Woodside and Rio Tinto have complained they will not get recognition for existing carbon abatement schemes. According to The Australian Financial Review , the government has said it will consider whether to link the two schemes as part of negotiations with regional independents and the Greens on the Multi-Party Climate Change Committee.
To deal with this risk, the government’s climate change adviser, Ross Garnaut, has advocated capping the number of CFI credits that could be used under a carbon price scheme.
Another barrier to the uptake of the scheme identified in submissions is the bar on projects that would have occurred in the absence of the CFI. As a result, projects which lead to material increases in agricultural productivity or profitability would be unlikely to be eligible.
This has led to concerns that farmers will be unlikely to take up CFI projects because of large start-up costs, uncertain revenue streams and the requirement under the CFI legislation that carbon be stored for 100 years.
Sceptre Group Limited is a specialist investment firm focused in low carbon financial investments such as sustainable biofuel plantations, agricultural farmland and green technologies. For more information on Carbon Credits & Carbon Credit Trading, please visit Sceptre International Group’s website at www.sceptreinternational.com.