The Emissions Reduction Fund (ERF) is a government initiative that provides incentives for the emissions reduction activities across the Australian economy and operates alongside existing programs that are already working to offset Australia’s emissions growth, such as the Renewable Energy Target and energy efficiency standards on appliances, equipment and buildings.
The objective of the Emissions Reduction Fund is to help achieve Australia’s 2020 emissions reduction target of five per cent below 2000 levels by 2020. The Government has provided $2.55 billion to establish the Emissions Reduction Fund, with further funding to be considered in future budgets.
The target is achieved by encouraging business and landholders to change their current management practices to either reduce the amount of Greenhouses gases that are released into the atmosphere, or to store Carbon in the vegetation, trees and soil. The ERF then credits the landholder or business with Carbon Credits (also known as ACCU’s) as a direct result of the emissions avoidance or sequestration activities.
These ACCU’s can then be sold back to the government under a separate fixed price and term contract or alternatively, on the secondary market. There are 32 approved methodologies for emissions avoidance or sequestration activities. These range from agricultural, energy Efficiency, industrial electricity, facilities, mining, oil and gas transport, vegetation management, waste and wastewater.
The Clean Energy Regulator is the government department who oversees the projects that are approved under the Emissions Reduction Fund. It is the Clean Energy Regulator who is responsible for approving the registration of projects and ensuring that they continue to meet the ongoing eligibility requirements pursuant to the legislation through various reporting and auditing schedules.
The Clean Energy Regulator is also the government body who administers ACCUs. ACCU’s are held in an ANREU Account (Australian National Registry of Emissions Units). The Emissions Reduction Fund has three elements: crediting emissions reductions, purchasing emissions reductions, and safeguarding emissions reductions.