Carbon Farming Initiative

The Carbon Farming Initiative (CFI) is a voluntary carbon offsets scheme. It is an integral component of the Emissions Reduction Fund and allows land managers to earn carbon credits by changing land use or management practices to store carbon or reduce greenhouse gas emissions.

The Carbon Credits (Carbon Farming Initiative) Regulations 2011 were amended recently with the aim at reducing the regulatory burden for forestry sector participation in the ERF, while recognising the need to ensure ERF projects do not pose a cumulative risk of an adverse effect on water availability. 

The amendment to Regulation 3.37 allows for ERF plantation forestry and farm forestry projects in higher rainfall areas to participate in the ERF if they are located in a region where the planting of trees is unlikely to have a material adverse impact on the availability of water.  The regulatory burden for these projects will be reduced as they will not need to apply through other pathways in the regulations.

Five pilot regional forestry hubs were identified as a priority for further plantation establishment.

The Department of Industry, Science, Energy and Emissions Reduction has the lead responsibility for the water rule and is responsible for determining what activities are eligible under the CFI.

Department of Agriculture, Water and the Environment’ role in relation to water interception

The Department of Agriculture, Water and the Environment (DAWE) consistent with its national water policy function, is responsible for advising where plantations are likely to have a material adverse impact on water availability under the CFI. 

DAWE has two roles with regard to water policy: ensuring compliance under the National Water Initiative (NWI) and under the amended Regulation 3.37 to provide advice on whether projects are likely to have a material adverse impact on water availability.

DAWE conducts risk-based assessments to determine whether the planting of trees would be likely to have a material adverse impact on the availability of water.

When conducting an assessment DAWE will:

  • identify where there is no evidence of plantations intercepting water that would   otherwise be available for regulated consumption or environmental use; and
  • consider state and regional arrangements in place, the region’s water allocations, risks to water resources, and monitoring and reporting.

Arrangements to manage interception activities vary across the states and territories and each of them has management, planning, and regulatory arrangements that govern forestry and commercial plantations.

In addition to the five pilot regional forestry hubs that have been identified and assessed as adequate by the Australian Government, further forestry hubs are under consideration. A map showing the regions that are exempt from the water rule has been published by the Department of Industry, Science, Energy and Resources on its website.

Project proposals in regions that are not included in the five pilot regional forestry hubs may still be eligible for the CFI and should refer to the Carbon Credits (Carbon Farming Initiative) Regulations 2011 for more information on eligibility criteria.

More information on the regulations, ERF, how to participate and the location of the five pilot regional forestry hubs can be found at https://publications.industry.gov.au/publications/climate-change/climate-change/government/emissions-reduction-fund/methods/plantation-forestry.html

Information about the NWI.

Last reviewed: 16 July 2020
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