Statement: Response to TAI-ACF Report on the Emissions Reduction Fund

The Clean Energy Regulator has responded to the TAI-ACF report alleging integrity issues with the Emissions Reduction Fund’s (ERF) avoided deforestation method.

TAI-ACF’s report is based on a number of false assumptions and demonstrates a serious misunderstanding of the ERF Avoided Deforestation Method.

The ERF avoided deforestation projects are preventing clearing of native forest that would otherwise take place. This is delivering significant emission reductions and valuable support for Australia’s agricultural sector, which has always been a hallmark of the Emissions Reduction Fund.

A deep flaw in the TAI-ACF analysis is that it assumes land clearing prevented by the method needed to occur during the 15 years of the clearing permit. This is not the case.

Almost all avoided deforestation projects that have been credited with ACCUs opted for a 100-year permanence period, which means scheme participants are unable to clear their land for 100 years, irrespective of the duration of the NSW clearing permit.

The TAI-ACF analysis also relies heavily on a low average clearing rate of remnant clearing 2,510 ha per year – this is why the analysis shows high per centage changes. In fact, if both remnant and re-clearing of land were included, then peak clearing rates of 43,000 ha per year as seen in 1988-9 could easily occur.

The 15-year timeframe for crediting Australia carbon credit units (ACCUs) is not about mimicking the life span of the clearing permit. When a decision is taken not to clear land, all the emissions from removing vegetation are avoided at once, so all the credits could be issued at once. At the time the method was made in 2013, the Carbon Farming Initiative was just beginning and there was a concern that if all the abatement from avoided deforestation was credited at once, the market would be flooded with ACCUs.

There are a range of different crediting periods in the ERF and others, such as plantation forestry, which also offer 15-year crediting to better reflect when the abatement actually occurs and to provide an upfront incentive for implementing the project.

The avoided deforestation method is one of a suite of methods under the ERF, which has a well-deserved reputation of world’s best practice integrity. This is reflected in the premium price paid for ACCUs in the carbon market compared to units from other offsets schemes of lesser quality.

Media contact: cer-media@cleanenergyregulator.gov.au | (02) 6159 3448