About the Emissions Reduction Fund

The Emissions Reduction Fund will support Australian businesses and households to take practical, direct action to reduce emissions and improve the environment.

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 Emissions Reduction Fund - what it means for you

How Australian businesses and the community can benefit from the Emissions Reduction Fund

If you are thinking about investing in new technology to improve the productivity or energy efficiency of your business operations, you may be interested in the Emissions Reduction Fund.

The Emissions Reduction Fund creates a positive incentive for Australian businesses to adopt smarter practices to cut the amount of greenhouse gases they create.


Reducing Australia’s Emissions

The Emissions Reduction Fund implements a long-term framework for stable and sustainable climate change policy.

The Emissions Reduction Fund offers strong incentives to seek out actions that are in the interests of business as they reduce costs and in the interests of the environment as they reduce emissions.

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How to participate in the Emissions Reduction Fund

The Clean Energy Regulator will begin administering the scheme once legislative amendments start and the necessary legislative rules are made. The Clean Energy Regulator will publish a series of guidance notes in the coming weeks, as well as rules for the auction process and forward dates for auctions.

The Fund has three elements and will be administered by the Clean Energy Regulator.

1. Crediting emissions reductions

Crediting involves determining an amount of emissions reductions delivered by an emissions reduction project. Crediting rules will be set out in emissions reduction methods.

The Clean Energy Regulator will issue one Australian Carbon Credit Unit for each tonne of emissions reductions delivered under a method. Credits can then be sold to the Government through a reverse auction.

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2. Purchasing emissions reductions

The Clean Energy Regulator will run competitive reverse auctions to purchase emissions reductions at the lowest available cost. The Regulator will enter into contracts with successful bidders. The contracts will guarantee payment in return for delivery of emissions reductions.

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3. Safeguarding emissions reductions

The safeguard mechanism will ensure that emissions reductions paid for through the Emissions Reduction Fund are not offset by significant increases in emissions elsewhere in the economy.

The safeguard mechanism will commence on 1 July 2016, to provide time for the Government to consult with business on important technical details.

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Carbon Farming Initiative transition

The Emissions Reduction Fund will build on the Carbon Farming Initiative.

Existing Carbon Farming Initiative projects will be registered under the Emissions Reduction Fund automatically. This will ensure that land managers are well-placed to bid for funding under the Emissions Reduction Fund.

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