Agriculture to pay for carbon scheme

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THE proposed Carbon Pollution Reduction Scheme (CPRS) will have negative implications on the agriculture sector, according to Australian Farm Institute executive director Mick Keogh.

Under the emissions trading scheme due to start in June next year, Australia’s 2050 greenhouse gas emissions target is 60 per cent below its 2000 levels.

Industries covered under the scheme need a permit for every tonne of carbon dioxide they emit.

Agriculture will be included in the scheme by 2015, with emissions from animals being the main target.

Mr Keogh discussed the scheme’s impact on WA agriculture at the recent Climate 21 conference in Perth.

He said the scheme would have a direct impact upon farming businesses through higher input costs.

“Some of the largest emitters in the economy will be required to be direct participants in that scheme,” Mr Keogh said.

“There is a threshold if you produce more than 25,000 tonnes of carbon dioxide equivalent per year.

“You will have to be a participant if you are in a covered sector and also if you are a bulk fuel producer.”

These businesses are already required to fill out annual statements on their greenhouse emissions and under the draft CPRS it will be illegal for them to emit gases unless they hold permits.

“What they have to do is complete their annual greenhouse statement and then surrender to the Federal Government those permits equivalent in number to what they emit,” Mr Keogh said.

“The Government will then auction those permits on a regular basis.”

Mr Keogh said agriculture would remain uncovered until measurement is organised for the sector.

He said petrol price increases would be offset by a reduction in petrol excise for the first three years of the scheme.

“Operator fuel uses will have the fuel rebate increased for the first two years,” he said.

“Forestry will be covered and able to participate on a voluntary basis.”

Mr Keogh said the mathematics used to assess trade emissions intensity would be the volume of emissions traded per million dollars of revenue.

“Looking at the agriculture sector, beef cattle, dairy and rice are all in the category that would potentially be allocated 90pc of their emission permits free to start with,” he said.