Federal goverment scraps ‘water rule’


THE way has been paved for the establishment of more tree plantations in Gippsland after the federal government removed the ‘water rule’ that for years has deterred new timber plantings participating in the Emissions Reduction Fund (ERF).

As of June 1, 2024, the water rule that had added conditions that plantation forestry needed to meet to participate in the Australian Carbon Credit Unit (ACCU) Scheme has been removed.

The water rule prevented forestry plantations that receive more than 600mm of annual rainfall from accessing carbon markets under the ERF.

The Australian Forest Products Association (AFPA) has long campaigned to get rid of the water rule. The AFPA Chief Executive Officer, Diana Hallam, said the end of the water rule was great for Australia’s forestry industry.

“The removal of the water rule means plantation and farm forestry projects will now be treated the same as other carbon methods and not excluded from many areas that are suitable for tree planting,” she said.

“The removal of the water rule will now enable farmers in many areas to invest in trees, diversify their income and create market options to help them achieve net zero.”

The federal government has removed the ‘water rule’ from the Carbon Credits (Carbon Farming Initiative) Rule 2015 (CFI Rule) under the Australian Carbon Credit Unit (ACCU) Scheme from June 1, 2024.

The amendment supports carbon farming opportunities for plantation growers and farm foresters.

During this transition, applications to register new plantation and tree planting ACCU projects in high rainfall areas can now be made to the Clean Energy Regulator and will not be subject to the ‘water rule’, if they do not start before June 1, 2024.

Ms Hallam said it was a ‘Berlin Wall-sized barrier’ coming down that for years had hindered new investment in much needed timber trees.

“The removal of these restrictions nationally is great news because Australia desperately needs new production tree plantings to grow future timber and wood fibre supply and decarbonise the economy,” she said.

In the period before June 1, 2024, new plantation and other tree planting ACCU projects can meet the water rule by being in any of the 11 specified regions, which includes Gippsland.

The removal of the ‘water rule’ follows public consultation and consultations with state and territory governments.

All ACCU projects must still follow relevant state or territory government rules and regulations.

Ms Hallam said just last month, AFPA released ‘How Timber Can Help Solve Australia’s Housing Crisis’, a plan for how forestry can help supply the timber to build 50,000 much needed new homes, to help solve Australia’s housing crisis.

“The removal of the water rule is one very important cog in the wheel of success towards this goal,” she said.“We thank the Albanese Government, in particular Ministers Murray Watt, Chris Bowen and Tanya Plibersek, for honoring its 2022 election commitment to remove the water rule, as well as the Coalition for taking the same policy to the election. This recognition and bipartisan support for industry investment is very important for our sector.”

Ms Hallam said AFPA would continue to work with Minister Watt and the rest of the government on how to leverage the removal of the water rule, including through the plantation establishment grants and other policies relevant the boosting the forestry sector.

Gippsland Farmer

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