Hundreds of millions of dollars of emissions reduction projects will be rendered effectively worthless if Labor, the Greens and crossbench senators vote down the Coalition’s direct action scheme.
Labor, the Greens and the Palmer United Party have vowed to oppose direct action, but now face lobbying from proponents of the emissions reduction projects to pass the fund to maintain a market for their projects.
Environment Minister Greg Hunt said he was inviting Labor, the Greens and the crossbench senators to work with the government to ensure that the CFI “is not just maintained but extended”. “This is a practical way to reduce emissions using a mechanism which has universal support among the different parliamentary parties,’’ Mr Hunt said.
Under the legislation to be debated in the Senate existing projects would automatically transferred into the emissions reduction fund and be able to sell their permits to the government as part of its auction process.
With the carbon tax scrapped, the projects need the emissions reduction fund to be passed to create a market for their emissions reduction units.
Chris Mitchell, managing director of advisory CO2 Australia said if the legislation failed to pass the Senate by net February there would be a “massive gap’’ and the country would effectively be left without a program to reduce greenhouse gas emissions.
Under the previous carbon pricing regime CFI projects created more than 3 million emissions reduction units in the past financial year that could be sold to major polluters to offset their carbon liabilities.
The emissions reduction fund if passed will be expanded to include energy efficiency projects and other emissions reduction activities.
Amendments to the CFI to set up the $2. 55 billion Emissions Reduction Fund — the centrepiece of direct action — will be introduced into the Senate during the spring session.
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