The ERF and Aboriginal carbon farming: 5 opportunities

  1. Get in soon. Under the CFI transition provisions, projects can be approved under the existing rules until 1 July 2015. This means getting projects up under the existing “common practice” test and not the new additionality rules set to come in. It also means taking advantage of the backdating provisions if you’ve been on the case for a while.
  2. Get in fast. The ERF funding starts at $75m in year 1 but not many projects might bid – industrial methods are simply not ready. This could provide a fast lane for projects who already have their house in order.
  3. Build big projects. The ERF rules soften the need to have the carbon rights for sequestration projects (storing carbon in the land through planting etc). Instead, you just need consent. You can also report on just part of a project to get credits. This makes it easier to aggregate small projects to build big projects without signing your carbon rights or your land rights away. You can then bid these bigger sequestration projects into the ERF.
  4. You can choose 25 year permanence. Many landholders expressed concern about long term obligations hanging over the land for 100 years when doing sequestration projects. Now you can choose the slightly more manageable option of 25 years, with a 25% discount on your credits. More peace of mind, less money.
  5. A ‘make good’ secondary market? This is more of a potential opportunity. The safeguard or penalty regime is due to come in on 1 July 2015. If, and it’s a big if, it hits business with penalties for exceeding baseline emissions, these businesses might buy your carbon as they ‘make good’ their emissions overflow.

Jeremy