Following the release of Senator Xenophon’s proposed changes to the CFI Amendment Bill, the Palmer Untied Party (PUP) continues to progress in its own negotiations with the Coalition, with an agreement edging closer for the Emissions Reduction Fund (ERF) to be supported by the Senate prior to the end of the year.
Political progress on the Direct Action Plan has intensified due to the increasing risk of collapse for the Carbon Farming Initiative, with investment into the offset scheme to fall from over A$150m in FY15 to just $15m p.a. unless the ERF is enacted prior to the end of the parliamentary year.
In light of the risk of collapse for the local offset market, support for the Emissions Reduction Fund has grown among the crossbench, with the Palmer Untied Party considering a range of legislative options to maintain the CFI.
As the clock begins to run down on the end of the parliamentary year, in this Market Update we outline the development of a ‘New Deal’ on Direct Action between PUP and the Coalition, with potential for an agreement on the ERF and ‘hybrid’ compliance market to be fast tracked to provide support to Australia’s offset market.