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Inquiry report paves way for CFI Amendment Bill

The Senate Environment and Communications committee today handed down their inquiry report into the Carbon Farming Initiative Amendment Bill 2014.

What did they find?

None of the party positions are surprising.

The Government recommended that the bill be passed. Their brief comment on the bill did not countenance any changes and paves the way for the bill to be introduced into the Senate unamended.

For their part, Labor Senators made a dissenting report highlighting the disconnect between repealing the carbon price before an inquiry report into those bills and while Direct Action remains a work in progress. They do not support the bill.

Likewise, the Greens opposed the replacement of the carbon price with the CFI Amendment Bill in the strongest possible terms. They consider the bill a short term and pointless fix which cannot be scaled up to meet Australia’s emissions challenge.

Senator Xenophon supported the Bill in principle, but wants an immediate start to the safeguard mechanism.

On the details, the opposition parties largely split from the Government on key issues.

On funding, Labor noted that Reputex research shows $2.55 billion will fall 300 million tonnes short of the reduction target and that not one of 106 submitters to the earlier Direct Action inquiry could categorically conclude that the ERF would achieve abatement targets. The Government had simply not released any estimates of emissions abatement (would love to read the Department’s analysis!)

On the methodology process, the Government noted the Minister’s ability now to introduce methodology from schemes overseas – which is welcome – but completely missed the point that private developers can no longer submit methodologies for approval. The process will rely on the goodwill of the technical working group process to put forward the most beneficial methodologies. Labor picked this up, quoting at length from our submissions on savanna enrichment, and supported small developers having their day.

On additionality, or whether a project is eligible, the Government noted the concerns of many but referred to the evidence from the Department of the Environment:

…the government have made it quite clear that it is not their intention to prevent people from pooling together support from a range of different sources… The regulator will put out further guidance to explain how it is that they will make that assessment on a case-by-case basis.

For their part, Labor said dealing with additionality concerns on an ad hoc basis was not good enough. We agree.

On crediting periods, the Government acknowledged the concerns over a single crediting period, but merely referred to the assurance in the explanatory memorandum to monitor progress. Significantly, Labor noted no credible reason has been provided by the Government for this position, despite many cries from the market that no renewal of crediting will kill the voluntary market.

Overall, there was not a clear focus on the issues of significance for Aboriginal carbon projects, additionality perhaps receiving more attention than the others. Perhaps the attendance at our appearance by three Senators only underscores the window dressing of many committee processes. On the face of it, it does not look like there will be much change, if any.

It is worth noting the longer game for the land sector: the need for consistent and stable support for projects which are more expensive to incubate and take longer to return. If there turns out to be a big gap between the repeal of the carbon price and the start of an Emissions Reduction Fund – a point noted by CO2 Australia – land sector projects could be stopped at the gate.

The bill is not currently listed in the Senate. Stay tuned.


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