The Carbon Farming Initiative Amendment Bill 2014 was introduced into Parliament by the Minister for the Environment on 18 June 2014.
Are there more changes which could affect Aboriginal carbon projects?
Yes. Additionality and crediting periods have been touched up. Excess credits will also have an ERF pathway. Overall, the position is now more secure than the exposure draft legislation in May suggested. But not as good as the existing CFI.
On additionality, the Bill clarifies the meaning of when a project has started - undertaking planning or doing some sampling is okay but a final investment decision or turning the soil will mean the project has started. This may not answer whether carrying out a little burning means you have started but is still helpful. More helpfully, the explanatory memorandum to the Bill acknowledges it is not the Government's intention to prevent projects obtaining funding from multiple sources and that savanna burning projects may involve rangers involved funded under Government programmes. On balance, the new law does not seem designed to trip up savanna projects, but we need to keep watch.
On crediting, the hope of a second crediting period has been removed - all projects can essentially get one crediting period under the ERF (any existing crediting period will finish when the ERF starts). So there is 7 years of certainty for savanna but the prospect of 25 years for sequestration projects. One crediting period will restrict projects from using ERF accreditation to sell on the voluntary market after their ERF contracts dries – when the contract runs out after 5 years the voluntary market will become important - but only if credits are still issued.
A saving grace is that projects under an ERF contract can sell excess credits at the end of their contract - this will help risk management and provide a nice little bonus for careful management of the project.
Perhaps acknowledging there is still uncertainty for savanna projects, the Department of the Environment made a cautious but supportive statement in its results of consultation:
The Government will monitor the progress of savanna burning projects under the Emission Reduction Fund and will review arrangements for these projects as a priority as part of the operational review of the Emissions Reduction Fund at the end of 2015.
We will be keeping watch. See what it means for the longer story.