Unless legislative action is taken to support the Carbon Farming Initiative (CFI), Australia’s land-sector may lose investment of up to $1.4bn, with cumulative supply of Australian Carbon Credit Units (ACCUs) to potentially fall from 54 million to just 17 million over FY15-18 should the Emissions Reduction Fund (ERF) not be implemented.
Notably, policy inaction is forecast to have a significant impact on CFI market value, which may decrease to just $15m per annum due to the slowdown in ACCU supply. Inversely, should the Emissions Reduction Fund be implemented, the value of the expanded CFI may grow to as much as $1.6 bn.
The Senate’s failure to enact the ERF prior to the end of the parliamentary year on December 4 would therefore be a considerable setback for the land-sector, with the next six sitting weeks to represent either the end of the road for the CFI, or the dawn of a new day for the domestic offset scheme.
