Carbon price mechanism and the Land Sector Package

The Clean Energy Future website has been developed to communicate the Australian Government’s plan for creating a prosperous and sustainable Australia. The website includes information on the carbon price, renewable energy, energy efficiency and land use, and how these four elements will work together to ensure a Clean Energy Future for Australia.

The website is the Australian Government’s official website on a Clean Energy Future and was launched by Prime Minister Julia Gillard on 10 July 2011.

Carbon price mechanism

The carbon price mechanism began on 1 July 2012, with a starting price of $23 per tonne. The scheme will have a fixed price period for three years and will then transition to a full emissions trading scheme.

Direct emissions associated with agriculture, fisheries and forestry are excluded from coverage under the scheme and these sectors' fuel use is also excluded permanently from a carbon price. It is the government’s intent to cover heavy on-road vehicles under the carbon price scheme from 2014-15.

Food processors

$150 million under the Clean Technology - Food and Foundries Investment Program is available for food processors to implement energy efficiency measures or low emissions technology. Initial priority will be given to dairy processing, meat processing, malt production and sugar facilities. If these funds are exhausted, further funding will be available through the $800 million Clean technology Investment program. This program will be administered by the Department of Innovation, Industry, Science and Research.

Land Sector Package

A comprehensive $1.7 billion Land Sector Package was announced as part of the carbon price mechanism.

This includes a $429 million Carbon Farming Futures (CFF) Program. As part of the CFF, DAFF will be delivering the:

• $201 million Filling the Research Gap Program: will provide competitive grants funding to support research into emerging abatement technologies, strategies and innovative management practices that improve soil carbon and reduce greenhouse gas emissions from the land sector and enhance sustainable agricultural practice.
• $99 million Action on the Ground: will provide grant funding to regional landholders and research, industry and farming organisations across Australia to undertake projects to implement innovative management practices to achieve sustainable outcomes, reduce emissions and boost soil carbon stores. Outcomes from the Filling the Research Gap program will be applied on-farm, ensuring that laboratory results can be replicated on the ground in real farming situations influenced by business and economic signals.
• $64 million Extension and Outreach: will provide grant funding to assist farmers and land managers to participate in land sector emissions management activities and the CFI. The program will provide technical information and support to farmers, land managers and their key influencers using a mix of traditional and new extension services.
• $44 million Refundable Tax Offset (RTO) will provide 15 % tax offset for the purchase of new eligible conservation tillage equipment installed between 1 July 2012 and 30 June 2015, managed jointly by ATO and DAFF.
• The Carbon Farming Futures Program also includes $20 million for the development of offset methodologies for the CFI which is being managed by the Department of Climate Change and Energy Efficiency.

Other elements of the Land Sector Package include:

• $250 million Carbon Farming Initiative non-Kyoto Carbon Fund
• $946 million Biodiversity Fund
• $22 million Indigenous Carbon Farming Fund
• $44 million Regional Natural Resource Management Planning for Climate Change Fund
• $4.2 million Carbon Farming Skills Program
• $4.4 million Land Sector Carbon and Biodiversity Advisory Board

Information on all of the above measures can be found at the Clean Energy Future website.