Rural and regional Australia moves to a clean energy future

The farming, forestry, land and food sectors will have an important role to play in reducing carbon pollution as Australia moves to a clean energy future.

THE HON GREG COMBET AM MP Minister for Climate Change and Energy Efficiency

SENATOR THE HON JOE LUDWIG Minister for Agriculture, Fisheries, Forestry


Parliamentary Secretary for Climate Change and Energy Efficiency


8 November 2011

The farming, forestry, land and food sectors will have an important role to play in reducing carbon pollution as Australia moves to a clean energy future.

Greater variability in our climate poses a real risk to our farmers and to our food production over time.

Increased drought, flooding and other adverse impacts stand to threaten Australia’s agricultural productivity and our farmers’ ability to remain competitive.

The Gillard Government’s Clean Energy legislation, which passed the Senate in federal Parliament today, takes decisive action against climate change and the real cost it represents to our agricultural sector.

It will help secure a clean environment for our farmers and a sustainable food supply for future generations.

The Government has opened the way for farmers and other land managers to earn new streams of income through the Carbon Farming Initiative and contribute to the transition to a low carbon future.

Credits generated under the Carbon Farming Initiative - also recognised for Australia’s international obligations under the Kyoto Protocol - will be able to be sold to companies liable under the carbon pricing mechanism.

This will include credits earned from activities such as reducing emissions from livestock and fertiliser, reforestation and savanna fire management. The Government has also allocated $250

million to provide incentives for other activities, including revegetation and soil carbon projects, through the purchase of non-Kyoto compliant Carbon Farming Initiative credits.

In total, around $1.7 billion will be invested in land sector measures over the next six years to support the Carbon Farming Initiative, maximise the benefits of storing carbon in our landscape, and reduce emissions.

This funding will target emerging technologies and innovative management practices including biochar, biofuels and new crop and grazing species.

It will also assist agricultural industries and others to test new ways of measuring, modelling and reporting on carbon emissions.

The Clean Energy legislation excludes the agricultural sector from the carbon pricing mechanism.

Farmers, forestry operators and other land managers will not pay a carbon price for the emissions from their activities and importantly, they will not face a carbon price for their off-road fuel use or on-road fuel use for light vehicles.

These sectors will however have the opportunity to benefit from economic rewards under the Carbon Farming Initiative.

The Government will provide significant assistance to the food processing industry to help it adjust to the introduction of a carbon price. Food processors will be assisted in making the switch to low emissions options through grants for energy efficiency improvements. These grants will be sourced from a pool of $150 million, provided under the Gillard Government’s $200 million Food and Foundries Investment Program.

Under the Clean Energy Future legislation passed today, a 15 per cent refundable tax offset will also become available for conservation tillage equipment for three years. This will improve soil carbon, water retention and productivity.