Emissions Reduction Fund

The Emissions Reduction Fund (ERF) is a voluntary scheme that aims to reduce Australia’s greenhouse gas emissions by providing an incentive for businesses, landowners and households to adopt new practices and technologies in order to reduce emissions or store carbon, for example in vegetation. Participants can earn Australian Carbon Credit Units (ACCUs) for emissions reductions, which can be sold to generate income, either to the government through a carbon abatement contract, or in the secondary market.

To participate in the ERF, a project must be eligible under an available ‘method’. Methods set out the rules that projects must follow to undertake activities, estimate emissions reductions and ensure genuine carbon abatement.

The plantation forestry and farm forestry methods

There may be opportunities for landholders to participate in the ERF and earn ACCUs by undertaking a:

  • farm forestry project, which involves establishing and maintaining trees on land that has previously been used for grazing or cropping, or
  • plantation forestry project, which involves establishing a new plantation forest on land that has had no plantation forest for seven years.

The farm forestry method places some upper limits—based on average annual rainfall—on the area of each harvest plantation.

The newness requirement

The ERF is not intended to support projects that are already underway without support from the ERF. For a project to be eligible for registration with the Clean Energy Regulator under the ERF, it must not have begun to be implemented before it has been registered (‘the newness requirement’), unless the method covering the project specifies otherwise.

Examples of activities that would indicate that a project has started includes: 

  • commencing construction work for the purposes of the project 
  • preparing soil for seeding or planting that is for the purposes of the project 
  • seeding, planting or fertilising plants that are for the purposes of the project 
  • installing an irrigation or drainage system for the purposes of the project
  • making a final investment decision to establish a new plantation, such as committing to establish a new plantation under the conditions of the loan.

To ensure that newness requirements are met, participants may wish to first apply to and register a project under the ERF before signing a loan agreement and committing to establish a new plantation under the conditions of the loan.

Eligibility to participate in the Emissions Reduction Fund

A range of information and tools to help you participate in the ERF, including the eligibility criteria and an interactive questionnaire, which enables you to find out if your project meets the eligibility requirements can be found at Planning a project (cleanenergyregulator.gov.au).

Enquiries on participating in the ERF should be directed to the Clean Energy Regulator on 1300 553 542, or enquiries@cleanenergyregulator.gov.au.